A new home doesn’t come cheap. On average, you will have to spend at least $260,000 for a property that satisfies your requirements. Even if you have the cash to cover the down payment, you could still end up paying hefty closing costs.
You should expect the unexpected if you are on the market for your dream home. Fortunately, you can still save a lot of money throughout the home-buying process by following a few simple tips. Whether it’s your first time in the real estate market or you are planning to move into a new neighborhood, here are a few cost-saving pointers you will need to keep in mind before sealing the deal:
Know What You Will Be Paying For
When buying a home, you aren’t only paying for the value of the property. It would help if you also shouldered other costs such as origination fees, HOA fees, and underwriting. There is also the need to pay for a home inspection and escrow fees. These additional costs could catch you off-guard, so to make the process less financially burdensome on your end, you need to know all potential expenses well before you shop for a home.
Shop For The Best Mortgage Deals
The amount of money you can save as you acquire a new home would depend on your mortgage choice. The best piece of advice you can heed is to settle with a mortgage that offers the best rates in the long run. You could opt for a short-term mortgage if you want to reduce interest costs over time. However, the trade-off to this is the higher monthly payments you will need to make. To be sure, you could use a mortgage calculator so you can decide on which loan that best applies to your financial situation. You can also choose to apply for special loans from the U.S. Department of Veterans Affairs, the Department of Agriculture, and the Federal Housing Administration.
Look For The Best Insurance Policy
Although you are not obligated by law to apply for home insurance, mortgage lenders will require you to pay for coverage. Apart from that, you also need to secure your property from whatever contingency may come your way. Then again, Americans pay an annual average of roughly $1,200 in home insurance premiums. This is higher in high-risk places, so reducing insurance costs is more a matter of location. You can also request homeowners insurance quotes from different lenders offering coverage that suits your needs.
Negotiate With Your Realtor
While most agents receive commissions straight from sellers, some would require you to cover such fees. With this in mind, it’s important to arrange a consultation with an agent beforehand so you will have a good idea of who gets to pay their commission. For this, you should be able to shortlist at least five potential agents you can work with and learn more about their respective commission schemes.
Buying a home is an expensive endeavor, but you only need to do some research and apply the right strategies that will allow you to settle down with extra money to spare.