Women & Money | How to boost cash flow to pay mortgage

Home-buying expenses aren't just about the mortgage. One of the most overlooked expenses is the slew of fees you pay to seal the deal. These expenses are called closing costs because you pay them in full when you "close" the sale. According to

» READ MORE: www.bankrate.com

, closing costs for a $180,000 mortgage average about $2,800, not including state and local taxes.

How much you pay depends on the type and size of the loan. Here's what you need to know:

Plan to pay about 3 percent of your mortgage at the closing.

Lenders must give potential borrowers a work sheet that gives "good faith" estimates for the closing costs. While estimates offer wiggle room, be sure to study this document before closing day so you have a sense of what's in store. See a sample HUD-1 Settlement Statement at www.hsh.com/hud1.html.

Focus on the origination fee, or what the lender charges to do business. It's typically expressed as a "point," with one point equal to 1 percent of your mortgage. There's no reason this fee should change, so watch it closely.

Shop around for title insurance. The lender requires it (which can be as much as 1 percent of your loan) in case it turns out that after you buy a place, someone else has a claim on it. To get the best deal, do your own legwork rather than use the company your agent recommends. I suggest www.titleinsurance.com.

Ask your lender if you can add the closing costs to the mortgage. Let's say you have a $200,000 mortgage and face $6,000 in closing costs. If you take out a 30-year, fixed-rate mortgage that charges 6.5 percent interest, your monthly mortgage costs would be $1,264. But if you roll in the closing costs, increasing your loan to $206,000, your monthly costs would be $1,302. You save having to find $6,000 in cash by paying $38 more a month.

With real estate markets cooling down, buyers have regained some leverage. Negotiate to have a seller contribute cash for your closing costs. How much the seller can legally kick in depends on your mortgage type. Your lender can explain the rules.

After closing, it's common for a new house to strain your finances, whether it's an unexpectedly large mortgage, higher utility costs than you budgeted for, or the desire to update your furniture. Before you rush to downsize, let's review ways to boost your cash flow.

Change your tax withholding. When you take on a higher mortgage, you're paying more in interest. While that interest is deductible on your federal taxes, many people incorrectly think tax refunds are as good as it gets. But rather than count the days until next April 15, revise your withholding and get money right now. Each paycheck will be bigger because less in taxes is taken out up front. Last year's average federal tax refund was about $2,400 - that's like finding $200 more a month in your paycheck.

Factor in the property tax break. If you happen to be a first-time homeowner, don't forget that your property taxes are fully deductible on your federal return. The same logic applies here as above: If you anticipate getting a refund, adjust your withholding and reap the benefit of that tax break in every paycheck.

Insure smart. Boosting the deductible on your home insurance to $1,000 can reduce your annual premium by 20 percent or more. It's the same with your car insurance. Look into buying your auto and home insurance from the same provider. You typically get a break of about 10 percent by having both policies with the same company.

Go mobile. Unless you absolutely need it, get rid of your land line. Compared to many home-service plans, using only a cell phone can save you about $50 a month.