If you are a first-time homebuyer, you are likely to be in for a shock when it comes to closing costs. The reality is, most home buyers don’t know what goes into closing costs, what they can negotiate, and the fact that they can negotiate in the first place. TitleZoom is more than just the
If you are a first-time homebuyer, you are likely to be in for a shock when it comes to closing costs. The reality is, most home buyers don’t know what goes into closing costs, what they can negotiate, and the fact that they can negotiate in the first place. TitleZoom is more than just the average title insurance company in Fort Lauderdale, we help educate home buyers on closing costs, everything they entail, and exactly which items they can shop around for to lower closing costs.
Why Shopping Around for the Best Lender Can Cut Your Closing Costs
Perhaps the most important thing to consider when it comes to shopping around and negotiating closing costs is the lender you choose. It is imperative that you shop around for different lenders and get their rates. The different interest rates and lender fees you will receive can vary tremendously!
For example, a buyer gets a pre-approval letter from a lender for $350,000. One lender may draft up disclosure documents that state a 4.875% interest rate and lender fees are $1,495. A second lender may draft up disclosure documents that state a 4.625% interest rate and $1,400 total lender fees. A third lender may state 4.265% interest rate and $895 lender fees.
It is important to note that the lender who gave the highest interest rate is likely to be tacking on interest points to make, let’s say $15,000 off your loan. The lender would then sell the loan to a bank for 4.265%, receiving the additional in commissions.
If you do not shop around to receive multiple lender quotes and ask what their all-inclusive lender fees are: application fee, underwriting fees, funding fee, review fee, etc. These fees are included in your closing costs, so going with the lender who gives you the lowest interest rate and lender fees is going to save you money on closing costs.
You can find your perfect lender by contacting banks you currently have accounts with and receiving their rates, meeting with a few selections your real estate agent may recommend and asking some close family members and friends who they used and what their rate was and associated lender fees they paid during closing.
Once you have chosen the best lending option, you can also shop around for the best title insurance company in Florida to cut that price down as well.
Sometimes, it is not enough to ask your real estate agent which title insurance companies they use, as they may have a partnership with the company that works to their benefit. Do your research on the companies they recommend, receive quotes from them, but also do your own due diligence and shop around for any of the items in your closing costs that you actually can negotiate, choose the companies, and get your closing costs lower.