June 9, 2016 - 13 Key Ways to Save Money When Buying a Home
The process of finding and purchasing a home can be extremely stressful. It often takes months to complete, and your wallet can experience surprise hits from unexpected fees. Educate yourself on these 13 ways to save time, money, and stress when buying a home, so you can feel confident about your purchase on your closing date.
- Start Saving Early
Even if you think you are a year or two out from purchasing, start saving diligently now for
a down payment. Depending on the type of loan and cost of your house, you may need to
pay 20% of the home’s value up front as a down payment..
- Boost Your Credit Score
Always know your credit score and resolve any credit issues you may have before having
a mortgage company run your information. Things like old addresses or old credit cards
with balances you’ve forgotten could cause you to be rejected up front.
- Cut Out PMI
Another reason to have a large down payment and consider shopping for more affordable
houses is to help you avoid Private Mortgage Insurance (PMI). You’re often required to
pay between .5% and 1% of your loan amount for PMI when you borrow more than 80%
of the value of your home.
- Shop Around for Mortgage Rates
You wouldn’t just buy the first house you see, so don’t sign the first mortgage loan
offer you get without shopping around. Explore different loan options, rates, and even
different mortgage companies to ensure you’re getting the best rate.
- Shop Around for Homeowner’s Insurance
Same with mortgage lenders, insurance companies can offer different rates for your
homeowner’s insurance. Make sure to share any jobs, degrees, or certifications you have
with them to allow them to search for the most discounts possible. Consider
bundling auto and homeowner’s insurance to save you money as well.
- Just Because You Were Approved For It Doesn’t Mean You Need It
Mortgage lenders make sure to give you the highest offer they can because they stand to
gain the most in interest the longer your loan is and the higher the amount. It can be
tempting to shop at the top of your budget, but homes in that price range may mean
cutting your monthly budget as tight as it can get.
- Inspection
Not only should you walk with the inspector and ask plenty of questions, but you need to
inspect your potential purchase yourself for glaring issues that may be a future concern.
Things to look for are:
- Damp, musty areas that may accumulate mold
- Check appliances such as the furnace or hot water heater to ensure they won’t need to be replaced immediately
- Look at the ceiling for leaks or cracks
- Look under rugs for hidden stains
- Look for efficiency issues around windows and doors.
- Build Emergency Fund
You may think the biggest expense is out of the way once you move into your new home,
but once you become a homeowner you may find monthly expenses from unexpected
repairs and utilities increased. Begin putting $50-$100 in an emergency fund every month
for unexpected costs.
- Be Aware of Hidden Fees/Expenses
Make sure you are aware of any extra lender, inspection, or closing fees not being
calculated into your required down payment. An online mortgage calculator may give
you an affordable rate, but it may not be calculating costs like insurance, PMI, and
property taxes. Lenders may even have required appraisal or recording fees that
add up.
- Hire an Affordable Mover
Not everyone has available friends for moving or access to a truck, and the process of
packing all your belongings and moving them yourself is incredibly stressful. Consider
hiring a professional, affordable mover to handle all the heavy lifting and save you
time and effort. For moving and storage needs in the Salt Lake City Area, check out
- Consider Auction Properties
Some foreclosed homes end up being sold for auction with steep price cuts. If you
aren’t afraid of an older home that may need a little work for a good price, consider
finding a home at auction. Always be sure to research each property and get them
inspected before purchasing consideration.
- Don’t Be Afraid of Elbow Grease
Some homes with cosmetic issues may have a much lower purchasing price. Don’t
eliminate homes based on a lower price or from bad pictures. Check out each property
because an older home in a great location may just need some basic cleaning and fixing
up.
- Extra Payments
Any big one-time payments you can make on your home loan or any extra you can pay
each month can save you so much money in the long run. Consider putting $50 extra a
month towards your loan or putting your tax refund directly back to your loan.
Limit effort and decrease your stress levels by following these tips to save as much as possible when buying a home. If the purchase is over and now you’re faced with the daunting task of packing and moving, learn more about options and prices from the experts at Redman Van & Storage.
