Do You Need Private Mortgage Insurance?

Do You Need Private Mortgage Insurance?

Why And How To Negotiate Closing Costs When Buying A House

by Luke Fields

When a house sells, it is typically the seller that pays the real estate commission and the buyer that pays the closing costs. If you are about to purchase a house, you might be able to save some money on the closing costs, though, but it would require some negotiating. Here are several tips to consider using that may help you save some money on the closing costs you are required to pay when buying a house.

Ask the seller to pay them

There is nothing that can stop you from asking the seller to pay these costs for you. In fact, this is becoming very common with real estate transactions today. If you want to do this, you will need to write it in the purchase offer you make for the house. You can include a line that states you are requesting that the seller pay all your closing costs. If the seller accepts your offer, he or she will be responsible for this.

You should keep in mind that it may not be a good idea to ask the seller to pay all of the closing costs. This can turn off a person that is trying to sell, but you could ask them to pay certain costs related to the closing, such as the costs for the inspections and appraisal.

Make a good offer on the house

If you are planning on trying to negotiate on the closing costs, it's important to understand that a person selling a house would be more likely to agree to this if the offer amount is good. In other words, you should try to offer an amount that is relatively close to the asking price if you want the seller to pay your closing costs.

For example, if the house is listed at $178,000, you may want to offer $176,000 if you are asking the seller to pay for some of your closing costs. If you want the seller to pay for all of them, you may want to offer $177,500 instead.

Negotiate with the lender

One other option you have is trying to work with the lender to reduce the closing costs you will have to pay. You could do this by eliminating any fees that really are not necessary, such as notary fees. You could also do this by asking the lender to clearly explain what each fee is and the amount of the fee. You could then ask the lender if they would be willing to reduce the fee for you.

There are ways to avoid paying closing costs or save money on them, but it might require being a little creative. To learn more, talk to an agent in your area today.


About Me

Do You Need Private Mortgage Insurance?

Welcome to my website. My name is Larry Silva, and I want to talk a bit about private mortgage insurance. You may have heard the term PMI mentioned when you were in the process of purchasing real estate. When I first heard my lender talking about PMI, I was very confused. It was my realtor who sat me down and explained what private mortgage insurance was and when someone is required to purchase it. He told me that PMI is not lifelong insurance; it can be cancelled when the mortgage principal balance reaches a certain point. Once it was explained to me, private mortgage insurance was no longer a mystery or a confusing concept. I would like to pass on what I learned and hope that you find it to be of value.