Because a home purchase is often the most expensive purchase that someone will make in their lifetime, it can be helpful to save wherever possible. If you’re thinking about buying a home, here are some ways you can save some money along the way:
Save as much as you can
The more money you save for your down payment, the lower your mortgage payments will be. Not only is this because your loan amount would be smaller, but having a substantial down payment can help you get a good interest rate.
Improve your credit
Your credit may be good enough right now to obtain a mortgage, but can it be better? If so, you might want to hold off on buying a home. Those terrific interest rates that lenders are advertising are often reserved for those with very good credit, and obtaining the best rate possible can help you save a lot of money. You could possibly refinance in the future once your credit approves, but refinancing may not be the best option and isn’t the solution for everyone. Because you are essentially taking out a brand new loan when you refinance, a lot of the steps that were involved when you took out your initial mortgage will be the same, and this includes paying closing costs all over again.
Compare home loan offers
It can be tempting to just accept the first pre-approval you receive and move on to finding a home, especially if the rate seems like a decent one. But you could be doing yourself a disservice if you don’t shop around first. Even if the first lender offered you a good rate, the second or the third one may offer you an even better one. You won’t know what other rate you could have qualified for if you don’t shop around first.
Shop around for your home
Finding the perfect home within your budget is great, but don’t rush into things. Unless you’ve already been looking for a long time when you finally find “the one,” you’ll want to see what else is out there. You can save a lot of money just by doing some extensive research, or by enlisting the help of a real estate agent. You may find a very similar home nearby, being sold at a much lower price.
Don’t be afraid to haggle
Unless available homes in the neighborhood are extremely limited and the housing market in your area is very competitive, don’t be afraid to haggle. For the most part, it’s still a buyer’s market, and the asking price is rarely the final sale price. You can save a lot of money on your actual home purchase just by negotiating it down. If the seller won’t budge on the actual price, try to negotiate on something else that can help you save money. For example, if some of the appliances in the home weren’t going to be included with the sale of the home, ask if they can be.
Get the home inspected
Before you finalize anything, make sure you hire a home inspector first to thoroughly go through the home. A home inspector might discover issues with the home that could have ended up costing you a lot of money. Save yourself this expense and frustration by getting the home inspected first.
Consider rolling in your closing costs
Closing costs can be as much as 5 percent of the home’s sale price, and this is upfront cash that is needed during the closing process. It can be difficult for a lot of buyers to come up with this kind of money, especially when they already had to come up with money for a down payment. If your lender provides the option, consider eliminating these upfront costs by rolling them into your mortgage. Although this would make your loan bigger and cause your interest to increase, it can be a good option and help you save money on your purchase if you don’t think you will be in your home for many years.
Compare homeowners insurance options
Just like with a mortgage, you’ll also have different options when it comes to homeowners insurance. Save money on your home purchase by shopping around first, and comparing the different policy options and prices.
Do you need extra money to buy a home? If you’re receiving annuity payments, Peachtree Financial Solutions may be able to help. Contact us today to learn more about selling your future payments for a lump sum of cash.
Nothing above is meant to provide financial, legal, or tax advice. You should meet with appropriate professionals for such services.