Bob Northern & Company
12540 Patterson Ave
Richmond, VA 23238
Tel: 804-708-9463 • Fax: 804-708-9467
Financial Information
Reduce your closing costs by hundreds or even thousands of dollars

Know what you can do to save a ton of money.

How can I reduce my closing costs by hundreds or even thousands of dollars?

You can do several things to reduce the cash you need to close on your new home. They include:

Have the seller pay part of your closing costs and/or prepaids.
Raise your contract price above the sellers desired price to include your closing costs. This way you can finance your own closing costs if the house appraises for the total contract amount.
Close on the last business day of the month in order to reduce your interest charges.
Did you realize your house payments are paid in arrears and rent is paid in advance?
On July 1, you pay your rent for the month of July in advance.

On July 1, when you own your home and make your house payment, your payment pays for the preceding month of June!

The bank can't charge you for the use of their money until you've used it!

Your first house payment is due a minimum of thirty days after you close, due and payable on the first day of that month. As an example, if you close on June 30th, your first house payment is due on August 1st. Your August 1st payment pays all of the interest for the month of July. You will be charged one day of interest for the month of June in advance at closing. This is called prepaid interest. If the interest part of your payment is $900.00 per month, one day of interest would be $30.00.

It is important to realize prepaid interest can be a significant number that you may unintentionally put yourself in a position to pay without realizing it! You could be set to close on Friday, June 30th. There could be a problem getting the paperwork together that afternoon and your closing could be postponed until the following Monday, which is July 3rd. When you return to the attorney's office they tell you that your closing costs have increased by about $870.00 due to your increased prepaid items. You will need to prepay your interest from July 3rd through July 31st in advance. Your first house payment will be due and payable on September 1st.

You're not losing any money or facing any additional costs, but if you are tight on funds, a situation like this can really ruin your day!

Reduce your points and/or origination fee by slightly increasing your interest rate. This one step can save you hundreds and hundreds of dollars!