So you are planning to buy a new house. Well, congratulations! You must want to crack an amazing deal. We, in this article, will help you give you some tips to save your money on a house purchase. It may also be the case that you are looking for ways to save money to buy a house. Buying a house is already a big financial and mental trouble. We appreciate you made it so far. The following tips will help you get the most out of your house purchase research and get a great deal.
See an experienced real estate agent
First things first, you have no experience of the real estate business. You need to consult someone who has market knowledge. You must not go by any estimations of your own. You should also not consult anyone you come across. Find a local real estate agent who is experienced enough. It is crucial that you make a consultation with the right person to avoid any possible losses due to miscalculations or even scam. So first things first get an experienced real estate agent for the initial consultation and your budget discussion.
Get different loan quotations
Interest rates are not fixed nor are the terms and payment schedule of loans. We recommend you to visit more than three mortgage companies at least. These lending companies have different charges and payment schedules. These charges may include loan processing charges, initial fees, maybe documentation charges, etc. visiting different lenders would give you a clear picture of the situation. It will help you determine charges of all these different lenders and their terms.
You have now an option to bargain and select your charges and payment terms and schedule.
These quotations from different lenders would help you in negotiating the initial charges and help you determine whom you want to carry out the transaction with. You now have an idea about the property location and charges through the real estate agent and loan terms and conditions through the quotations of different lenders.
Save for the down payment
Have at least 20% of the cost of the house saved with you as the initial down payment. If you do not have an initial down payment of 20% then you have to get Private Mortgage Insurance. You are then going to be trapped with insurance. Private Mortgage Insurance is the insurance of the loan that you borrowed from the lender. It is to make sure that in case of default the lender can recover his money.
FHA mortgage is administered by Federal Housing Administered insurance. In case you borrow from FHA then whether you have a down payment of 20% of the cost or not, you have to take their insurance for loan security. This is the reason many people opt out in favor of a conventional loan if their Loan to Value (LTV) ratio falls below 78%.
You have to seek ways actively to save for the down payment. In case you do not have enough saving then you have to follow many of the minimalistic lifestyle tips for some time to get that payment saved. It is better to cut down some expenses than to getting into more and more loans. Have a savings account particular to your savings for the down payment. It will help you to have a track of your saving.
Work on your credit score
The better your credit score the better will be your loan repayment schedule and interest rate. All your loan applications and terms of the loan are dependent on your credit score. You need to be very careful with your credit card use and repayments. Don’t get involved in applying y for new loans or credit new accounts. Inquires made on your credit lower your credit score. The lower your credit score is the more problems and tight payment schedule you are going to face.
It is important to consider that the same lender would give two different interest rates for two different credit scores. In case you have a high credit score you are not going to face problems in acquiring a loan. There is a very little chance of your loan application being rejected. If this is not the case there are several methods to improve your credit score. You can follow these tips and in some time your credit score will rise.
You may buy a house with some fixation needs
You, for sure, want the house of your dreams. You must be looking for some house in perfect condition. But here is the tip; look for a house that requires some fixation. These kinds of houses because of their fixation needs are low in price. You may design the house later and get it fixed according to your budget. This will also allow you to get creative with your new house. You may save more money this way than the sum required to fix the house.
Another important point here is that houses in great condition and fancy fixtures and styling are expensive. These houses may not be affordable for everyone. Also, buy your house in winter. During summer the demand for house purchase is more than winters. So you can save some money if you buy a house in winter.
These tips, if followed carefully, will save your time and money and you will be able to end up with a price worthy house purchase.