When buying a new home, you may be focused on finding a mortgage program that has a down payment requirement that is manageable for you. However, some home buyers will overlook the costs that they are responsible for at closing. These costs can vary, but it is common for home buyers to pay between two to three percent of the loan amount in closing costs, if not more. This can be a hefty sum of money that you will need to budget for. The good news is that there are some steps that you can take to keep these costs to a minimum.

Shop For a Title Insurance Company

There are numerous fees that will be listed on your closing statement, but one of the highest fees is the title company charge. The title charges vary from company to company. Most lenders and real estate agents have preferred title companies that they want to work with, but you typically have the ability to shop around and compare the fees. You simply have to inquire what the lender’s or real estate agent’s preferred title company is and what the fees are. Then, you can shop around to find a better deal.

Consider Your Escrows

Another large expense on your closing statement will be the prepaid taxes and insurance as well as the escrows for these amounts. One idea is to ask your lender to waive escrows. This request is not always granted, but it can drastically reduce the amount of money you need to pay for out of your pocket at closing. You can also shop around for a better deal on property insurance to lower your escrow expense.

Ask the Seller to Pay for Closing Costs

While you are ultimately responsible for many of the closing costs, you may be able to structure your sales contract so that the seller pays for some or all of the costs. This is generally something that may be negotiated at the time the original offer is made, but you could also submit a revision request to the contract through your real estate agent.

Understanding what the closing costs are and which costs can be negotiated or shopped around for is important. You can also look at how gifts from the seller or other parties can be used to reduce your out of pocket expenses when buying a new home.