Can You Reduce Your Closing Costs?

Closing costs are a necessary part of every real estate transaction - as a buyer, you'll be responsible for paying them (unless you can agree with the seller that he or she will pay part or all of them for you). 

But are there ways to reduce closing costs so you can keep more of your hard-earned money in your pocket?


Here's what you need to know.

Can You Reduce Your Closing Costs?

These are the most common ways people are able to reduce closing costs when they buy a home in Lakewood or Long Beach:

  1. Loyalty programs
  2. Closing at the end of the month
  3. Rolling the closing costs into a mortgage loan

Here's a closer look at each.

How to Reduce Closing Costs by Participating in Loyalty Programs

Some banks offer closing cost discounts to people who hold accounts with them. For example, Bank of America offers reduced origination fees if you're a member of its "Preferred Rewards" program. This might seem like a minor kickback, but when you're buying a home (and taking out a huge mortgage loan), every dollar counts.

How to Reduce Closing Costs by Closing at the End of the Month

If you schedule your closing for the end of the month, you'll pay less in per diem interest. For example, if you schedule your closing on the third of the month, you'll pay per diem interest for the remaining 27 or 28 days. However, if you schedule your closing on the 29th of the month, you're only paying per diem interest for one or two days. Ordinarily, your interest will be included in your regular mortgage payments - but the month you close is a bit different.

How to Reduce Closing Costs by Rolling Them Into a Mortgage Loan

When it comes to doing the math on your mortgage, adding a few thousand dollars to your overall loan is a drop in the bucket. For most people, the difference doesn't amount to more than a few dollars (or less) a month. You may want to ask your lender about rolling your closing costs into your mortgage loan so you can pay them off over time - and avoid having to show up at closing with thousands of dollars in your pocket that you could use for other things.

Are You Buying a Home in Lakewood?

If you’re not already living in Lakewood, or if you are but you’re looking for a new home, we’re here to help. Call us right now at 562-882-1581 or start browsing our Lakewood real estate listings to find your dream home today!

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