Savvy home shoppers can save at settlement

— -- Home buyers dicker about appliances, cabinet styles and the move-in date but often question little when it comes to a pricey part of their purchase.

Closing costs — fees paid at settlement — can add up to thousands of dollars.

Yet, the costs and settlement process are mysterious for many. Half of mortgage applicants in a 2007 Federal Trade Commission study could not identify their loan amount on settlement forms.

How do bewildered buyers figure out what's supposed to happen and what they should be paying? In many cases, they don't, or they take the word of the title company and lender.

To make sure you don't overpay when buying a house, keep in mind that an economical closing begins with a good opening: start preparing early in the house hunt.

Alan Stacy, housing counselor with Consumer Credit Counseling Service of Greater Atlanta, says a dream applicant has her financial paperwork close at hand; boasts a minimum credit score of 720 for a conventional mortgage or 620 for an FHA loan; and has educated herself, perhaps on the Internet, about how mortgages work.

Norm Miller, academic director at the University of San Diego's Burnham-Moores Center for Real Estate, says the savvy borrower will walk into the mortgage office with paycheck stubs, recent bank statements, two years of tax information and a printout of all savings account numbers, stock account numbers and cash-value insurance accounts.

"I'm going to come in with everything I can to make it easy for the lender," Miller says. "That's not only going to speed everything up dramatically, but you'll probably be considered a more sophisticated buyer, and they'll be fairly upfront with you."

Well-versed buyers fare better at the settlement table. A 2008 Urban Institute study showed lenders appeared to make lower-price offers to borrowers who seem more familiar with market terms.

Bart Shapiro, deputy director of the U.S. Department of Housing and Urban Development's RESPA office, which regulates settlement procedures, advises consumers to: