Buying a home is likely the most expensive thing to spend on. You may even spend years paying it off especially if you’re buying one to enjoy for years to come. However, the benefits of owning a home will make you want to buy one.
Purchasing a new home comes with lots of fees, expenses, and repairs. So, this all means in as much as buying a new home is beneficial, you should be ready to spend quite a lot. However, in this article, we’ll show you smart ways in which you can save money buying a home.
8 Ways to Save Money Buying a Home (Mortgage) 2023
1. Make A Higher Down Payment
When buying a house, making a higher down payment can potentially save you on several fronts. First, it may enable the seller to accept your offer, even when it may be lower than others. Also, it can help you pay less interest by paying less in the form of your mortgage. Lastly, it may help you avoid getting private mortgage insurance (PMI)
2. Buy Your Home in The Off-season
Generally, in the prime of the home sales season, you’ll pay more for a home because they’ll be more competition. If you’re willing to buy your home in an off-peak season — usually in the winter and specifically during the holidays — you may be able to snap a home for much cheaper. However, note that you may also have fewer options during those times, as there are also usually fewer homes on the market at that time.
On the other hand, most consumers tend to purchase homes in the summer and spring months and, as a result, this is typically the most expensive season to buy a home. So, purchasing a home in winter could potentially save you some money.
3. Negotiate for Repairs
After conducting a home inspection on the house you intend to purchase, there’s usually some back-and-forth on the repairs the seller should complete and if they will make them before closing. They could also be disagreement on if the seller will offer a monetary credit on the purchase for the buyer to complete repairs on their own.
While negotiating for repairs with the seller won’t save you money upfront, asking them to complete necessary repairs before closing will save you from having to pay for it after moving in. Also, when negotiating, it’s best to concentrate on those repairs that either require immediate attention or are particularly costly.
4. Refinance Your Home Mortgage
A good way to potentially lower your monthly mortgage payments is by refinancing your home mortgage. For one, refinancing your mortgage to a loan with a lower interest rate lowers your monthly payments and reduces the amount of interest you will pay over the life of the loan.
Getting an extended term is a great alternative if acquiring a lower interest rate isn’t possible. For example, if you go from a 30-year loan to a 40-year loan, you may lower your monthly mortgage payments may be possible. However, note that this option may mean you’ll have to pay. more in interest over the life of the loan.
5. Stay Out Of The City
You can consider living in a mid-sized city or the suburbs of your city especially if you’re flexible about where you want to live. Generally, you’ll need to pay more to purchase a home in the hub of a major city, as they’re in high demand but in short supply.
Not to mention, you may experience a higher cost of living and pay more for transportation costs.
6. Find a Reliable Real Estate Agent
Not only using an experienced and dependable real estate agent who is familiar with the area can save you time, but it’ll also save you money. This is especially crucial for first-time homebuyers, as a decent real estate agent can help you navigate the entire process and provide ways you can save money buying a house. You can often find recommendations for good agents from friends, family, residents, or online real estate sites.
7. Consider Getting A Shorter Loan
Another effective way to save money buying a home is to get a shorter loan term. This will enable you to get a better interest rate. As another bonus, you will pay off your home fast. Although your monthly mortgage payment will be quite higher, if you can afford it, you can be able to pay off your home faster and save bunches. For instance, on a $200,000 mortgage, the difference you will pay between a 20-year mortgage and a 10-year one with a 1% lower interest rate is over $80,000!
So, when buying a home, it’s crucial to choose the best mortgage for your needs. While longer-term mortgages like 30-year loans can result in lower monthly payments, they also translate to higher interest paid over the life of the loan. In most cases, the shorter the loan term, the lower the total interest. While this means you may have to pay more monthly, it also means you’ll pay less in interest, which could potentially save money in the long term.
8. Switch Energy Tariff Immediately
This idea is mostly after moving into your new home. When you first move in, the previous owner’s energy provider will still be active. But they won’t charge you a similar rate as the previous owners. They’ll most likely put you on their standard tariff.
However, this can be significantly higher than the other rates. So when moving into your home, take the meter reading and check for a new deal as soon as possible to save some money.
Conclusion
Knowledge is power when buying a new home. By understanding the expenses that come with purchasing a new house, it’s easier to know where and how you could save money. For first-time homebuyers, they’re unexpected expenses to understand and consider. However, making adequate preparations to counter these expenses can save you thousands of dollars.
Also READ: