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15 Ways to Save on Closing Costs in Alabama

This blog post will help you learn about the 15 ways to save on closing costs in Alabama. 

1. Negotiate with the seller

A buyer can negotiate with the seller to cover some closing costs. It is also possible to split the bill.

2. Know what are the fees included

Do not simply pay for something without knowing what it is for. Break down the costs.

3. Work with a REALTOR

Working with a realtor will help you come up with an estimate of your potential closing cost. 

4. Apply for Financial Assistance Programs

The Alabama Housing Finance Authority offers programs to help homebuyers in Alabama. 

5. Use MIlitary Assistance

Active duty military people, Reservists, National Guardsmen, civilian-military employees, and veterans may be eligible for programs that help with closing costs.

6. Search for Lenders

Look for lenders who offer the best deal. Compare the overall closing cost, and if a lender proposed a discount, set companies against each other and see who is willing to help you save money on your purchase. 

7. No-closing-cost mortgages

“No-closing-cost” mortgage is when your mortgage lender agrees to cover a portion or all of your closing fees in exchange for a higher interest rate.

Estimate the fees

8. Estimate the fees

You can prepare for how much you would pay for the closing cost by breaking down the fees and making an estimate. 

9. Ask the Seller for deals

Some sellers are willing to reduce the property’s sale price or sometimes cover the closing costs. You may be able to talk with your seller to lower some fees. 

10. Stick to your budget range

Avoid committing to a property that is outside your budget range. This will help you pay other fees without the need to use money not included in your budget.

11. Delay your Closing

By lowering your pre-paid daily insurance payments, you can save a lot of money on your closing fees. Between the date, you close and the date you make your first mortgage payment, say you closed on the 10th, you’ll have to pay interest for an additional 20 days; however, if you close on the 28th, you’ll only have to pay interest for two days.

12. Work with legal services company

Working with legal services company will help you have a smooth closing process. 

13. Add your closing cost to your home financing

If you don’t have the funds to cover your closing costs, you can add them to your house loan. However, note that your monthly mortgage payments may be a little higher, and you’ll have to pay interest on the original mortgage’s closing fees.

14. Ask your bank about discounts and rebates

There are banks that offer existing customer incentives on their mortgages. 

15. Choose the best home

After all the struggles and expenses of buying a new home, it will all be worth it by choosing the right home for you. This will save you from potential problems in the future.

Closing Cost in Fairhope fl 

Fairhope’s closing cost is divided into the buyer’s and seller’s closing price. 

Here are the fees included in a typical buyer’s closing cost:

Title Search Costs 

The expense of a title search is usually shared between the buyer and the seller. Each person can pay between $100 and $150

Title Insurance 

The cost of title insurance varies depending on the size of the loan and the price of the home. Homebuyers must purchase title insurance to protect themselves from mistakes made during the title search. Many mortgage companies require you to have title insurance.

Loan Origination Fees

This fee is 1% of the loan amount. Note that a buyer’s closing costs in Alabama usually go-to mortgage loan origination fee, 

Private Mortgage Insurance

Buyers who cannot put down a minimum of 20% must purchase private mortgage insurance from a mortgage company. It is usually between 0.3 and 1.5 % of the loan amount.

Appraisal Fee

Appraisal fees cost around $450.

Escrow Fee

The escrow fee costs between $500 to $800 are charged by the title company to close the deal. It can be split between the two parties.

Attorney Fees

Attorney Fees

An attorney fee can be split between the buyer and the seller. It typically starts at $75 and $100. 

Taxes and Recording Fees

Transfer taxes are $1 for every $1,000 of the home sale price. 

Seller’s typical closing cost:

Mortgage Fee

The lender determines the cost of a mortgage. The lender might charge the seller a principal sum, a recording fee, interest accrued from the last payment, or any statement fee.

Real Estate Broker Commissions

Alabama real estate agent commission fee may amount to about 5% to 6% of the house’s market price.

Property Taxes

The seller is responsible for paying late bills, including real estate taxes and homeowner’s insurance. 

Attorney Fees

In the closing process, real estate attorneys assist with managing the buy and sale contract and the necessary legal paperwork. Attorney costs range from $75 to $100 in Alabama.

HOA Dues, Document Fees

For properties under the Homeowners Association or condo units, there is a need for the seller to pay HOA and document fees.

Home Inspection and Repairs

Sellers may pay for the house inspection amounting to $300 – $500.

Appraisal Fees

A professional appraiser assesses the house’s cost or market worth. They usually range in price from $200 to $300.

Final Thoughts 

Exploring assistance programs and being a wise buyer will significantly help you get the house you want at a more affordable price. 

For inquiries, feel free to contact us. We are happy to help you with your concerns about Alabama closing costs.

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