How One Simple Question Can Save You Over $100,000 on Your First Home
Buying a home is one of the biggest financial decisions you’ll ever make. But what if you could save over $100,000 just by asking one simple question when getting pre-approved for a mortgage?
The Question That Can Save You Thousands
Before you commit to a lender, ask:
“Can you provide me with a closing cost estimate?”
This one question puts you in control and gives you a clear breakdown of all the fees, interest rates, and costs associated with your loan. Too often, homebuyers accept the first mortgage offer they receive, not realizing they could be paying thousands more in unnecessary fees and higher interest rates.
The Smart Move: Compare Offers from Multiple Lenders
Once you get your first closing cost estimate, don’t stop there. Within 14 days, apply with one or two other local lenders and request the same Loan Estimate. This comparison process will help you:
- Identify hidden fees some lenders may charge.
- Compare interest rates and loan terms to find the best deal.
- Negotiate with lenders to secure better rates and lower costs.
How Much Can You Really Save?
According to research, buyers who shop around for mortgage quotes save an average of $76,000 over the life of their loan. And in high-cost areas, that number can jump to $100,000 or more. That’s money you could use for renovations, investments, or simply keeping more cash in your pocket.
3 More Ways to Save Big on Your Mortgage
Besides shopping around for the best loan offer, here are three additional strategies that can help you maximize your savings:
1️⃣ Boost Your Credit Score for the Lowest Rates
Your credit score plays a huge role in determining your mortgage rate. The higher your score, the lower your interest rate will be. Aim for a score of 780 or higher to qualify for the best rates possible. Here’s how you can improve your score:
- Pay down credit card balances to lower your credit utilization.
- Make on-time payments for all bills and loans.
- Avoid opening new credit lines before applying for a mortgage.
2️⃣ Consider an Adjustable-Rate Mortgage (ARM)
An adjustable-rate mortgage (ARM) often starts with a lower interest rate compared to a fixed-rate mortgage. This can be a great option if you plan to sell or refinance before the rate adjusts. However, make sure you understand the risks, as rates can increase after the initial fixed period.
3️⃣ Negotiate a Seller-Paid Rate Buy-Down
In today’s market, buyers have more leverage than they think. You can ask the seller to cover a rate buy-down, which means they pay upfront to lower your mortgage interest rate for the first few years. This strategy can significantly reduce your monthly payments and make homeownership more affordable.
Don’t Leave Money on the Table
The homebuying process can feel overwhelming, but doing your homework pays off—literally. Asking for a closing cost estimate and comparing multiple lenders can save you tens (or even hundreds) of thousands of dollars over time. And with a few extra strategies, you can cut even more costs on your mortgage.
Ready to start your home search? Make sure to ask the right questions and shop around for the best deal. Know someone who needs to see this? Share this with them now!
