Can You Negotiate Closing Costs?

Buying a new home can be quite an expensive process, and it is important for most people to save money where they can. One question that many people consider is whether or not they can negotiate closing costs during the transaction. In many cases, third parties generate the closing costs and typically don’t change; additionally there are some costs that can’t be negotiated. Here are three things to remember about negotiating closing costs.

What Are Closing Costs

Closing costs are fees, which are charged by lenders and third parties, and related to the purchase of the home. When the title of the home is conveyed to the new buyer, this is typically referred to as the closing. The closing costs for a home don’t necessarily always go to the buyer or the seller, that is determined by negotiations at the end of the transaction. The closing costs likely incurred include loan origination fees, discount points, appraisal fees, title searches, title insurance, survey, taxes, deed-recording fees and credit report charges.

Negotiate with the Seller

You can always negotiate who pays the closing costs with the seller. In some cases, the seller will be willing to “pay” a buyer to finalize the sale and purchase the home. When the seller pays the buyer’s closing costs, it give the buyer more incentive to close the deal on the home right away. Additionally, another thing to consider is that you can get a no-closing cost mortgage, which means you won’t pay any of the closing costs when you close on the mortgage.

What Are Negotiable Closing Costs

There are a number of closing costs in any given transaction that are negotiable. Those costs include: origination fees, appraisal fees, administrative fees, attorney fees and title insurance fees, among others. Even if you think you are getting a good deal at the time, it is always important to remember that these things are negotiable and can save you money in the long run.

Buying a home is a huge expense and a milestone in your life. To save yourself time and money, know what costs are negotiable and who you can negotiate with to make sure you get the best deal for you. For more information about negotiating your closing costs, visit here.

8 Tax Deductions for Homeowners

If you are not finished with your taxes yet, you are not the only one! We all want the best tax return we can get, right? 

Are you a homeowner? If so, you need to know what tax write offs you are eligible for. Whether you purchase a home last year, or 20 years ago you need to make sure you are not missing out on any deductions.

In an article by FoxBusiness.com, we found some good tips and information for you!

"The amount of tax breaks depends on the size of your mortgage and your income bracket." explains Bob Walters, chief economist at Quicken Loans. For example, "if you have $110,000 loan and pay $4,000 in taxes and the standard deduction is $12,000 you're not exceeding it."

*Ask your tax advisor if you qualify for this deduction.

Here are a few tax deductions to look out for...

- Home Mortgage Interest Deduction

Another tax deduction for homeowners? Home mortgage interest deduction. With this deduction you are allowed to reduce your taxable income by the amount of interest paid on the loan each year.

"Mortgage interest is the biggest deduction for a homeowner," says Les Kramsky, executive vice president and general counsel to title insurance agency Silk Abstract Company. "It's a big tax advantage for homeowners." 

- Property Taxes

Property taxes here in Central Ohio will vary by city, by school district and even by neighborhood. Nobody wants to see their property taxes in the $10,000 or $20,000 and sometimes even higher. But the perk is that you could see a substantial tax write off. Talk to your tax advisor about the details!

- Closing Costs - Mortgage Points

Did you buy a home last year? If so, you might be eligible for a tax write off. Specifically let's talk about mortgage points. Your lender might have asked you during your home buying experience whether or not you wanted to "buy points". This is translated to lowering your interest rate over the life of your mortgage. Each point is a percentage, and the amount you paid may be eligible for a tax deduction.

There are more perks to buying a home than you realize! Talk to your tax advisor about all of the tax deductions you may be eligible for from buying a home last year.

- PMI - Private Mortgage Insurance

Did you take out a mortgage between 2007 and 2011? If so, you may be eligible for a tax deduction if you are paying PMI. "This deduction no longer exists, but if you took out your mortgage between the years 2007 and 2011 you can deduct your PMI premiums even if you are paying them after 2011," says Kramsky.

Other deductions to watch out for...

- Construction Loan Interest

- Home Improvement Loan Interest

- Home Office

- Selling Costs

Of course these examples just scratch the surface. Make sure you talk to your tax advisor to see what you are eligible for to make sure you do not miss out on any deductions.