Closing costs can go up to 5-7 per cent of the price, which can be a substantial amount for budget-conscious homebuyers Image Credit: Shutterstock

If you have plans to purchase a house, then you should be well aware of the closing costs. Closing costs are nothing but fees and expenses that are levied on the buyer before finalising the mortgage or in other words, before the seller hands over the property to the buyer. In the UAE, closing costs include the land department fee, property registration fee, real estate agency fee, mortgage processing fee, property valuation fee, mortgage registration fee, etc. These closing costs can go up to 5-7 per cent of the property price. Considering a property value of Dh1 million, the closing costs can go around Dh70,000, which shows that these exorbitant charges can cost an arm and a leg. But on conducting an adequate amount of groundwork, homebuyers can save on these extra costs.

Here’s a guide on ways to save on closing costs on a home mortgage.


Even though maximum closing costs are about government and legal fees, which are non-negotiable, there are some charges that can be decreased with negotiation. These include mortgage processing fees, home inspection fees, insurance fees etc., which need to be paid to the lender or a third party. While making any purchase there are always a wide pool of choices, which also holds true in the case of mortgage loans. Compare different lenders and opt for one that can help you in saving money in every aspect.

Getting a loan estimate from two or more lenders can help you in comparing these charges. Once you get the loan estimate, do not just take a glance at it. Understand every fee that is going to be charged. Check if there are any optional fees added.

Negotiate with the lender

Once you shop around at different lenders, you can negotiate and request to reduce these costs. There is no harm in asking to get a better deal. Usually, the lender will provide you with some discounts or offers and may even knock off some fees. One should take a proactive role and make use of those benefits. Negotiating can become easier if you are already an existing customer of that particular financial institution.

Negotiate with the seller

There are fees that are to be paid by the seller as well. Apart from this, you can ask your seller to cover some of your closing costs. A seller is always in a hurry to sell, especially if the property has been on the listings for a long time. Take advantage of the situation and request the seller to cover the closing costs partially or completely. Mostly won’t cover the entire amount, but if you can save at least half the cost then it is definitely worth a shot.

The most practical way to save on closing costs is through negotiating. Buying a house might be one of the biggest purchases you’ll make in your life, so finding ways to save can make a huge difference in the long run.

Nikhil Rastogi is co-founder and director of The views expressed here are his own.