Closing costs on a loan are always a topic of conversation.  Before the market took a downturn, there were all kinds of programs that would either cover the downpayment or get closing costs covered .  In today's real estate market, a buyer has to bring a downpayment no matter what, so the closing costs are the sticking point.  Buyers now are trying to get as much closing costs covered as possible.  The thing to think about is, how can you get the closing costs reduced?  Here are some ways that will help you get the lowest, or at least, better closing costs. Before we talk about how, lets talk about what closing costs are.

What are Closing Costs?

Closing costs can be confusing and buyers tend to not fully understand them.  When a buyer buys a house they have closing costs and pre-paids. Closing costs are fees that a buyer pays the lender and the closing attorney to finalized and close the loan.  Pre-paids are property taxes, home owners insurance, and mortgage insurance that is needed to set up an escrow account.  So it is very important to get the best estimate of both of these so you can negotiate and get most, if not all, of these paid.

Ways to Reduce Your Closing Costs

• Compare mortgage companies - When you applying for a mortgage, or even before, call at least three lenders and get a Good Faith Estimate (GFE) of what your total costs for the loan will be. Then you will be able compare rates and fees for each one.

• Get a referral - Ask family members, friends, and your Realtor. They usually have someone that can help you. You could get better rates because of the relationship that the person, who referred you, has with them.

• Ask for the discounts available from other companies - You can ask the lenders whether they could match the deals that other lenders are offering you. You will be surprise with the results of what the lenders will be able to offer you.

• Watch for unnecessary fees - When you look at a quote, there are a lot of fees that will be charged to you. These fees are negotiable and you may request to take them out. These fees are usually the vague ones like application fees, underwriting fees, and loan processing fees.

• Look into title insurance discounts - The title insurance varies among states and the type of homes. Some states mandate the rates of title insurance. Check the laws in your states and check whether you could ask for discounts.

• Ask for a lender credit - This is a great way to get your closing costs reduced. Click on this link it will explain what it is- LENDER CREDIT

These are just a few ways that could help you with getting better closing costs.  What really is the issue is trust with the lender.  Buying a house is a lot of money and it needs to be done right.  Choosing the cheapest might not be the best.  Find the lender that has good rates but you feel you can trust.