Save Money at Closing

There are a number of money saving ideas you can use to save money on your mortgage and at the closing table. The most obvious is to ask the seller to offer payment of closing costs as part of your negotiations for an accepted offer on the home.

If the seller is not willing to let closing costs be deducted from his current asking price, you can suggest that the final sale price of the home be increased to offset closing costs, providing that the home will appraise for amount suggested. Since most closing costs are not tax-deductible, you avoid missing out on the deductions by putting the closing costs into the mortgage for which mortgage interest is tax-deductible.

You can save money at closing by looking for loans that don’t have a lot of administrative fees such as seller financing or taking over an existing mortgage. Such loans will help you avoid purchasing private mortgage insurance (PMI) when you don’t have the standard 20 percent down payment. You can pay a higher rate of interest (typically .75 to 1 percent) or you can use two loans (e.g., 80-10-10) to finance your home purchase. The advantage of financing the amount of the second loan is that the mortgage interest is tax-deductible.

The NAEBA Code of Ethics ensures that the member EBA who represents you will do their best to reduce closing costs. Contact NAEBA today to find a member agent near you.