NEW YORK – Dec. 19, 2014 – Closing costs can add a lot to home buyers' final price, depending on which lender a buyer uses, which state they live in, the price of the home and sometimes even the day of the month the closing occurs, The Wall Street Journal reports.

Borrowers can reduce their closing costs in several ways:

• Comparison shop. If buyers apply for a mortgage with more than one lender, they'll be able to compare the origination fees quoted in good-faith estimates, says Greg McBride, chief financial analyst of Bankrate.com. Federal law requires lenders to provide the statement within three days of a loan application. The origination fees cannot be changed, but lenders are given a 10 percent cushion in estimating third-party charges, such as for the appraisal, survey, inspection and title services, according to Peggy Lawlor, mortgage strategy executive with Bank of America.

• Watch the day of closing. The day of the month can even influence costs. "If you close on Nov. 5, you have to pay the per diem interest from the 5th to the 30th; but if you close on Nov. 28, it's only three days," says John Walsh, president of Total Mortgage, based in Milford, Conn.

• Seek relationship discounts. Sometimes lenders offer lower origination fees to loyal customers. For example, Bank of America offers a program called "Preferred Rewards." The program offers up to $600 in reduced rates on a mortgage depending on the customers' dollar amount of deposits at the bank.

• Lump closing costs into the loan. Buyers who can't afford to bring more money to closing may reduce their out-of-pocket expenditures by rolling the closing costs into the total loan amount. However, lenders will likely charge a slightly interest rate if they do, so buyers should carefully weigh the pros and cons.

• Look into title insurance discounts. The cost of title insurance can vary greatly among states and even by the type of home. Some states mandate the rate that title insurance providers charge. However, not all do.

Source: "How Home Buyers Can Lower Closing Costs," The Wall Street Journal (Dec. 10, 2014)

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