Save Money by Using these Financial Hacks to Buy a Home
SUBMITTED BY Highline Residential on July 3, 2018
Put Twenty Percent Down
When you borrow in excess of 80 percent for a home mortgage, you're automatically required to pay for private mortgage insurance, also known as PMI. This adds to your monthly payment. Homes in New York, NY, have an average down payment of 8.8 percent, but Pennyhoarder.com suggests you work toward saving 20 percent for your down payment. Your wallet will eventually thank you.
Multiple Lenders and Multiple Quotes
You won't know if you're getting the best mortgage deal if you don't compare the terms with other lenders. According to Investopedia, "Looking at multiple good faith estimates (GFEs) side by side lets you compare rate and closing cost scenarios" to select the ideal mortgage package for your particular set of circumstances. At times, you can negotiate amongst several lenders in hopes that they will compete for your business by offering better terms than their competitors.
Find a Fixer Upper or Less Expensive Home
Choosing a home that requires a bit of loving care in order to return it to its former glory is another way to save money when buying a house. Fixer uppers boast lower sales prices because they're not move-in ready. There's less competition amongst home buyers since not everyone's wild about homes that require repairs. You may be able to get a great home in a wonderful neighborhood for less money than similar homes for sale in the area.
Not interested in a fixer upper? Consider buying a less expensive home. Purchasing a more reasonably-priced home allows you to pocket more of your hard-earned cash. That cash can go back into savings or pay for new furniture or upgrades.
Hire a Home Inspector
A home inspector will examine your prospective house for any serious problems, like issues with the wiring, foundation or plumbing. Forbes.com reports this "saves you thousands in repairs down the line in the event the home needs more than routine repairs." If the inspector uncovers hidden problems with the home, you can ask the seller to reduce the home's sale price or pay for the repairs before you agree to purchase the house.
Buy a Home During the Winter Months
Many people aren't thinking about buying a new home during the winter months. Can you blame them? The snow is on the ground and the temperature is plunging. Most people are thinking about holidays and sipping hot chocolate by the fireplace, so this is a great time for people like you to snag a great home at a great price. In other words, you experience fewer homes on the market with fewer home buyers bidding against each other. This leaves more room to negotiate with sellers for the best deal you can find.
Don't Fall in Love
Fall in love with a significant other, not with a house. House hunters who are enamored with one specific home can end up making terrible financial decisions. They let their emotions get involved, and act on instincts instead of common sense. If you let your heart rule your head, you'll be too focused on that adorable bay window or huge tree in the backyard and end up paying too much for a house.
Buying a home is one of the most important investments you will ever make. It's also one of the most expensive. Fortunately, there are ways to lessen the cost of purchasing a home. Making a 20-percent down payment, finding a less expensive house, hiring a home inspector, buyinging a home in winter, and refusing to fall in love with a house are all smart ways to save some money while negotiating the price of a new home.
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