After being settled with the price on your new home and securing a commitment from the lender on the mortgage processing services, you approach the closing.  From now, you have to consider the closing costs. Closing costs are charged by the vendors and the lenders and they range from two to four percent of the home price. There are many strategies involved to reduce the closing costs. Some of them are discussed below.

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Strategies to reduce closing costs

  • Loan estimate form

Once the mortgage application is completed, the lender provides a loan estimate form within a time limit of three days. They include the loan amount, monthly payments, and interest rates.  Also, it has a page called services you can shop for which includes the survey, inspection, title search fees,  fees for a settlement agent, and the insurance binder. It is not essential that we must consider the vendors listed on the loan estimate form. Instead, shop around to get low costs.

  • Don’t look upon the lender fees

Lenders charge on the loan. The costs could be usually about the underwriting and loan origination. One cannot escape from these charges instead one can try to lower them. Also, try to compare the offers from other lenders too. At the final stage of submitting your application, make use of different loan estimate forms, from different lenders to compare.

  • Get new vendors

Once the loan estimate is ready, you should find the low priced vendors for the services.  This must be done in time because on hiring them, the vendors will have a lot of paperwork to be done. Finding cheap vendors could save upon your closing costs.

  • Closing, costs to your mortgage processing services

 The lender could provide many options if you don’t have available cash to pay your closing costs.  One method is to include the closing costs along with the loan payment. This can reduce your closing costs but the loan amount would increase.

  • Seller payment

The agents’ commission is paid by the seller. They contribute to the closing costs based upon the market.  This serves as the seller credits in the loan estimate form.

  • Closing towards the end of a month

Interest charges get cut down when the closing is done towards the end of the month. A lender would help to run the scenario for you, to check out how much you save.

  • Ask for discounts and rebates

Some lenders offer incentives to attract borrowers.  These rebates would knock down various costs. Thus, reducing the closing costs.


Closing costs are unavoidable while purchasing a home. If you take steps to shop around and analyze your loan estimate form and mortgage claim processing, you could save much upon the closing costs. When you shop around, consider the charges addressed by the lender and try reducing them.

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