You finally found your dream home and are ready to start down that road to homeownership. It’s such an exciting time! … But then there are the fees. Underwriting fees, application fee, origination fees, recording fee, appraisal fee, and many others. Closing costs include so many fees that you may start to wonder if you’re really as ready to buy a home as you thought you were.
Don’t let closing costs derail your dream. There are strategies and options out there that can ease the sting of these fees.
You can cover closing costs by:
Utilizing Down Payment Assistance Programs
These programs vary by state and even city and county, but there are hundreds of programs that provide closing cost grants. More information on these programs can be found on the Housing and Urban Development (HUD) website.
Tapping Your 401(k)
This isn’t a move to be taken lightly, but in some cases it may be strategic to borrow from your 401(k) to prevent further debt from racking up.
Saving Your Tax Refund
They say a tax refund is bonus money, but really, it’s money that was yours all along. Put that cash to good use by covering your closing costs and ensuring that your mortgage and monthly payment won’t increase.
Creating a Homeownership Fund
You can set aside a certain amount every month or throw a little money in whenever there’s extra. You can also ask your friends and family to donate to it as a gift for, say, a wedding, graduation, or other milestone occasion.
Understanding the many facets of your mortgage loan is key before you sign your final documents. Closing costs and down payments should certainly be considered carefully.