Many homebuyers save up significant amounts of cash in order to make down payments on their new homes, only to be surprised by how much additional cash they need at closing. Closing costs can vary depending on several factors, so it can be difficult for homebuyers to determine exactly how much money they need to save up for this expense. Fortunately, there are several ways a prospective homebuyer can cut back on total expenses when closing on a home.

Opt Out of Paying Mortgage Points

Even though purchasing mortgage points can be a smart strategy for homebuyers, these points are often some of the most expensive additions to a homebuyer at the time of closing. When you purchase a mortgage point, it lowers the monthly interest rate you will pay on your loan. While this strategy can save you money over the lifetime of your mortgage, buying one point will cost one percent of your total loan, which could add up to several thousand extra dollars at closing. If you’re serious about keeping your costs down at the closing of your home purchase, it might be better to skip this option.

Obtain a Mortgage at the End of the Month

Not many people realize that they can save some upfront cash when they’re closing on a home if they obtain their mortgage at the end of the month versus the beginning of the month. Just to give you an illustration, when your loan is approved, the prorated mortgage payment for the current month will be added to your closing costs. This means that if you close on your house at the beginning of the month, you’ll have almost a full month’s mortgage payment that’s due at the time of closing. If you close at the end of the month, however, your prorated payment will be much lower. Keep in mind, however, that you are not paying any less for your mortgage overall, but it does lower your initial costs.

Negotiate with the Seller

One of the best ways to lower your costs is by simply asking the seller to pay the closing costs. This can be especially effective in a buyer’s market or in a situation in which a seller is in a hurry to close the deal. The best way to successfully take advantage of this strategy is to work closely with your real estate agent, who will be able to better assess your individual situation and determine which costs you should ask the seller to handle.

Closing on a home can mean that new homeowners have to put up a significant amount of cash. Fortunately, there are ways to close on your home and still walk away with money in your pocket at the end of the process. Talk with your real estate agent and your mortgage lender to find out if one or all of these strategies could work for you.