Escrow. The word alone can make veteran and novice investors alike nervous about closing the deal. After all, you have done the hard work, finding the perfect home to buy. Perhaps it is an ivy covered Craftsman in Mission Hills or a loft in downtown San Diego. Maybe it is an east county El Cajon bank home or coastal La Jolla foreclosure. Now, however begins the real nuts and bolts of actually buying the home. The escrow process, and the associated applications, permits and fees can sometimes leave buyers feeling as if they made the wrong decision, offered too much for their house or won't be able to afford the closing costs. But here's the good news: Not all your closing costs are set in stone!
Good Faith Estimates Spell Out Closing Costs
Within three days of making your loan application the lender is required to provide a Good Faith Estimate, spelling out all the of the closing costs and anticipated charges. This GFE identifies things such as mortgage insurance, escrow fees, the appraisal fee, property taxes due and prorated interest. Since many of these fees are charged by the lender, the title company, and the escrow company, they may be negotiable. Here are some strategies you can try to reduce the amount you pay at closing, putting more money in your pocket and in today's San Diego foreclosures market, perhaps leverage your closing cost savings into buying bigger properties or additional bank owned homes:
Review the GFE thoroughly and ask for an explanation or justification of each fee
Some lenders charge an application fee - this is the easiest one to have waived because it is entirely at their discretion
Some lenders will list an underwriting fee AND a loan processing fee - ask for details about the two processes and suggest they could be combined into one, lower fee
Review the fees charged by the title company and tell the lender you will shop for your own company if the fees are exorbitant
Provide your own proposal for hazard insurance from your insurance company - many times these fees are estimated by the lender and may not reflect your good insurance history or deals you can bring to the table from your personal insurance agent
Appraisal fees are set by the appraiser and there is no requirement that you use the lender's appraiser - know however that many lenders may make it difficult to use your own, but it is worth asking about, especially if the appraisal fees appear extraordinarily high
Saving money on closing costs is another tool home buyers can use to make the most of their investment dollars. Particularly when shopping for San Diego bank homes, where prices are affordable but you might have some improvements to make after you close escrow, every dollar counts.
Contact Richard Elias today at 1-800-474-1919 to schedule a showing or discuss listing your San Diego home for sale.
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About this Page: Closing costs add thousands to the purchase price of your San Diego foreclosure purchase. Richard Elias offers tips on how to negotiate for lower rates.
Keys To Lower Closing Costs
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