Haggle with the seller. He may pay all or part of the closing costs.
Nab a no-point loan. You may have to pay a higher interest rate, but if you are strapped for cash and can qualify for a higher interest rate, you may find this type of loan can significantly reduce your closing costs.
Grab a no-fee loan. Although the fee is usually wrapped into a higher rate loan, it does offer one advantage – you get to save on the amount of cash you would need up-front.
Secure seller financing. These loans typically avoid the traditional fees or charges imposed by lenders.
Shop ‘til you drop for the best deal. Every lender has its own unique fee structure; you are bound to find one that works for you.
Keep extra money in your account. Something unexpected can pop up during the closing that will require more money out of your pocket. Take your checkbook. Even better, find out how much you will need to pay and write a certified check for the total amount.
Take your loan commitment letter. Use it to verify loan approval in case of a mistake or misunderstanding with the lender.
Take your contract to purchase. Pull it out if something a little suspicious comes up.
Take your personal ID. A driver’s license or other personal identification will due.
Do a before-closing inspection. It is always a good idea, when possible, to walk through the property to make a list of any problems.
Utilities. Arrange in advance to have the water and electric meters read on closing day and the service switched to your name to prevent interrupted service. The same applies for the fuel tank.
As designer and builder Philip S. Wenz, the author of Adding to a House: Planning, Design & Construction, notes, an addition is much cheaper than building a new home and can offer a “new” home without the heartache of moving.
Can you finance the home improvement with your own cash or will you need a loan?
How much equity is in the property? A fair amount will make it that much easier to get a loan for home improvements.
Is it feasible to expand the current space for an addition?
What is permissible under local zoning and building laws? Despite your deep yearning for a new sunroom or garage, you will need to know if your town or city will allow such improvements.
Are there affordable properties for sale that would satisfy your changing housing needs?
Explore your options. Make sure your decision is one you can live with – either under the same roof or under a different one.
hard-to-sell new homes in a housing development
With the latter, you may be able to buy a partial interest in this form of title to property owned by two or more individuals because the partners often sell at a discount.
However, bargains are easier to come by in a soft real estate market, when the economy is in a recession, and when homeowners, and builders and sponsors of condominium conversions, are desperate to move unsold units.
Remember, too, that the listing, or asking, price is what the seller would like to receive for the home. It is not necessarily what the seller will settle for. So know value. Before you make an offer, check recent sales and listing prices of comparable neighborhood homes and compare them to the seller's asking price.
Be flexible. Never say, “take it or leave it.” That can sour negotiations and ruin the deal.
Never show your hand or reveal your next step.
Each time you increase your offering price ask for something in return, such as repairs, appliances, even lawn furniture.
If you plan to pay cash or have a tentative commitment for a loan, use your strong financial position as a negotiating tool.
Don’t let emotions such as pride, fear, love, and anger get in the way of negotiating the best deal. Leave irrational feelings at home.
An MCC also makes it easier for eligible buyers to qualify for a mortgage loan. The lender can reduce the housing expense ratio – the percentage of gross monthly income applied toward housing expenses – by the amount of the tax savings. Normally, lenders reject loans if the housing expense ratio is too high.
Program requirements for MCCs vary, although most adhere to the following guidelines:
The buyer must live in the home being purchased with an MCC-assisted mortgage.
Total household income cannot exceed certain limits.
The buyer cannot have owned a principal residence within the past three years. This restriction may be waived if a property is purchased within a certain targeted area.
The purchase price must fall within an established limit.
More information is available by calling your local housing or redevelopment agency, or contacting your real estate agent.