How to Save Money When Buying a Home
Posted by Eric Skates on
Are you thinking about a home purchase, consider these tips as you're getting started with your home search, you may be able to save some money over the long term!
Avoid paying PMI with a 20% Downpayment
Did you put down less than 20% on your mortgage? If so, you are paying private mortgage insurance (PMI). A lender takes this out on all mortgages with a down payment of less than 20%. You can avoid paying PMI by putting at least 20% down on your mortgage. Of course, not everyone can afford this large of a downpayment, Equity Prime Mortgage is proud to offer down payment assistance programs for people who cannot make a 20% downpayment.
Purchase a less expensive home
If you are good at construction and working with your hands, consider a fixer-upper. If you are willing and able to perform the renovations, you will save on labor costs. What better way to customize your own home. New fixtures, paint, or appliances all to your standards. Your sweat equity and monetary investment will pay off. You can sell that home for far more than what you paid for it.
Raise your credit score
Does your credit report have a few blemishes? Now is the time to get those resolved. A low credit score negatively impacts your ability to get a mortgage. Let's say you are approved. The better your credit score, more often the lower your interest rate will be. These savings add up fast.
Get a 15-year mortgage
Mortgages come in 15- or 30-year terms. The 30-year loans will be less per month. In the long run, you will pay more in interest though. If you go with a 15-year loan you pay less in interest over the lifetime of the loan. Yes, your monthly mortgage payment is more. But you pay the home off faster and pay less in interest.
Make additional mortgage payments
Have you earned a bonus at work? Or a raise? Did you receive an inheritance recently? Think about putting that extra cash toward a few extra mortgage payments. See how much you can save with a loan payment calculator. All you need is your loan amount, term, and interest rate. You may be surprised by how much you can save.
Research mortgage options
It's easy to focus simply on getting that approval letter. But it is also important to understand what loan program works best for you, the Mortgage Loan Originators at Equity Prime Mortgage will work with you to understand what mortgage options work best for you.
Reevaluate your homeowner's insurance
Homeowners insurance is a requirement for owners. But it benefits you to shop around. One company may offer you a lower monthly rate with the same coverage. You may be eligible for a discount program you didn't know about.
If you're in a buyer's market Don't accept the seller's first offer. Things like closing costs and final price are negotiable. Think about non-monetary money savers too. Additional renovations, landscaping, or keeping some appliances in the home.
A different location may mean lower taxes
Location determines what you will pay for the home. But it also determines what you will pay in property taxes. If you buy in the city your taxes may be higher than if you purchase a rural home.
Buying a home is expensive but well worth it. There are many ways to save money while buying your dream home. It requires some time and research, but your hard work will pay off! If you're ready to get started with you journey to homeownership click here to start the prequalification process or give us a call toll free (877) 255-3554.