Closing costs aren’t usually the first thing you think about when buying a home, even though the fees could add up to thousands of dollars. Typically, you could pay up to 5% of your home purchase to cover additional expenses like a title search, home appraisal and attorney fees. You may not be able to eliminate these fees entirely, but there are options for finding the money you may need.
Increase your savings
Become a savvy saver and plan for projected costs. You’ll be able to cover your costs with cash and not have to worry about a larger loan or the added interest payments that go along with it.
Find special programs
If you qualify for a First-Time Homebuyers Loan you may be eligible for additional financing to help with closing costs. Or, first-time homebuyers who are members may be eligible for a Federal Home Loan Bank of Atlanta (FHLBA) grant when approved for an LGFCU ARM Loan, excluding the First-Time Homebuyers Loan.
With the FHLBA First-Time Homebuyer Program, you could qualify for a grant in the form of a forgivable second mortgage to assist with down payment and closing costs. A forgivable second mortgage typically allows for a percentage of the original down payment assistance to be forgiven each year for a predetermined number of years.
Negotiate closing costs with the seller
Offer the seller a little more than the agreed-upon sales price, then ask to use the extra funds to offset closing costs. This could help close the gap between what you’ve saved and what you may still need. The seller may want to contact a tax professional for guidance on possibly receiving a tax deduction when closing costs are offset.
The seller can help save you even more if you use the current title to perform the title search. Your attorney can search from the point of the last title issued. That’s the time lived in the home and not the home’s entire lifespan. This means less work and lower attorney’s fees, keeping a little more in your pocket at the end.
Close at the end of the month
When it comes to a great deal, acting sooner rather than later is usually a good way to save money. The opposite is true with closing costs. That’s because the clock starts ticking on interest payments from the day you sign until the last day of the month. For example, if you close on June 1, you’ll be responsible for all interest accrued from June 1 to June 30. However, if you close on June 29, you’ll only have to pay interest for June 29 and 30. That’s two days of accumulated interest versus 30.
Increase your home loan amount to pay for closing costs
Haven’t saved enough or prefer to use your savings for other home expenses? Add your closing costs to your home loan. You’ll increase the amount borrowed and your monthly payment, but you’ll have your costs covered. Be sure the added cost fits in your budget.
Log in to Member Connect's Mortgage Center to learn more about your mortgage loan options, including closing costs.
The FHLBA First-Time Homebuyer Product is available only through our ARM products and cannot be used with the LGFCU First-time Homebuyers Loan. Mortgage loans are subject to approval. Greater than 90% loan-to-value limited to maximum financing of $500,000. Mortgages are available for properties located in NC, SC, GA, TN or VA. Members must reside in NC or bordering states to be eligible.