Six Money Saving Tips for Home Buyers

money saving tips for home buyers
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Buying a home can be both an exciting and overwhelming time in your life.  Adding up all of the expenses can get a little frightening for most people.  Paying attention to a few key points as you begin the home buying process can save you a lot of money later.

1. Try to save enough money for a 20% downpayment.  Putting down less than 20% of the purchase price in cash means that your lender will require you to hold private mortgage insurance (PMI).  This could add an extra $2000 per year to your home expense.

 

2. Don’t buy the biggest house the lender says you can afford.  Make a purchase that is well within your comfort zone so that you have financial flexibility for the unexpected.  You will want to have money available if you need to make a large repair or lose your job.

 

3. Talk to more than one mortgage lender.  It’s ok to shop around for the best deal.  Consider both the interest rate the lender can offer as well as the fees they are going to charge for originating your mortgage.

 

4. Be careful about loans with points.  Including points in a loan increases the effective cost for the borrower.  If you sell or refinance in the first three to five years, those points are only going to cost you money.

 

5. Get a good home inspector.  Your home inspector will provide you with an expert opinion about the foundation, the roof, and everything in between.  A thorough home inspection could end up saving you tens of thousands of dollars in the long run.

 

6. Factor the cost of repairs or improvements into your purchase.  Get details quotes for both supplies and contractors.  You may plan on saving money by doing the work yourself.  Honestly assess your time and ability to complete the project.  The house that needed some work might not turn out to be the deal you thought it to be.

 

Follow these six tips, and your home buying experience is sure to be a little easier.
Have you bought a home recently? Was there a particular expense that took you by surprise?

 

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