Buying a home is very rarely cheap. For the average person, they are the most expensive thing they will ever buy. However, that doesn’t mean that you can’t find ways to lessen those expenses some. Here, we’re going to take a look at tips that can make the home search and those home ownership goals more accessible. From the property itself to all the little costs that can go along with it, we’re going to make buying a home more accessible.
Take time to build that down payment
Make a budget to help you build a bigger down payment. Your down payment is going to make a huge difference in what kind of home loans you are offered. Most obviously, it reduces the overall loan amount you have to pay off. This, in turn, reduces the amount of interest that builds on a home over time. However, a higher down payment can save you even more money by opening the path to some of the most competitive rates that the lender has on offer. You might be able to take out a loan that allows fee-free early repayment or discount rates that can make the first few months of living in the new home a little cheaper, making it easier to put money aside for furniture, decorating, and repairs.
Get your credit in order
Besides your income and your down payment, your credit is going to have the biggest role to play when it comes to getting a better loan. Your credit is, essentially, your reputation when it comes to borrowing. If you have missed bill payments, defaulted on loans, or gone bankrupt, then that’s going to be reflected in your credit record and report so most of the top lenders will avoid you. However, even if you’ve been perfectly good with your credit in the past, you still need to take a glance over your report. It may contain negative markers that shouldn’t be there. Companies make inaccurate reports all the time. You could have bad reports chipping away at your credit steadily without even being aware of it.
Get plenty of quotes on loans
Often, people will go with their own bank when it comes to taking out a home loan. That’s understandable. Not only is it accessible and convenient, but many banks and financial service providers offer favorable terms for people who are members. However, the same can be said for the lenders who are happy and willing to entice new customers. Some lenders will, for instance, offer fee-free mortgages, and may they pay for the home inspection and legal costs of buying the home. Look around to see if any other lenders are willing to outbid the benefits of sticking with your current provider.
Don’t borrow more than you need
Following the process of choosing a lender, re-applying for eligibility, then applying for the mortgage itself comes the offer. You might find that the lender offers you a much larger mortgage than you initially requested. It can be incredibly enticing to take it and to buy a bigger or better home. However, that brings severe risks with it. The bigger the mortgage, the more interest it’s going to accrue. What’s more, it might take a lot longer to pay off, meaning that it takes longer for you to get equity or complete ownership of the home. Both of these factors together mean that the risk of eventual foreclosure is a much greater possibility.
Search far and wide when it comes to property
We all have a dream home. It might sting to say it, but if you’re buying your first property, you might want to put that dream aside for now. Think of the first home as a stepping stone. It’s your first piece of real estate, which you can own, invest in, then sell at a profit later to move on to bigger and better things. For that reason, it might be worth being flexible. Outline your needs, yes, but consider taking on a home that is something of a fixer-upper or is in a different area that’s not quite as in demand. You might be able to find a home with as much room as you want at a much lower price if you be a little more flexible.
Don’t forget to negotiate
Most home buyers soon become aware of this, but it needs to be restated: the asking price is not the price that the home is going to cost you. The real value of a home isn’t dictated by a valuation but by how many potential buyers want it and what they value it at. When you come in with a first offer, don’t be afraid to low-ball them slightly (not too much, of course) and to negotiate. Having a home inspection can help you highlight issues that could see something of a reduction in costs. While you’re negotiating, try to learn as much about how many people are interested in the home. If there’s a lot of interest, you may get into a bidding war and you need to consider how much you’re really willing to pay. If you’re the only one interested, you have a lot more room to negotiate.
Don’t spend too much on the move itself
When you’re putting together the budget for buying a new home, having some money set aside for the move is essential. There are some essential costs worth spending on, like getting new appliances, fixing exterior problems, and getting any repair work done as soon as possible. However, don’t miss the opportunity to save money, either. You can money on transporting your things, for instance, by selling or giving away anything extraneous. You can money on decorating by getting pre-owned or upcycled furniture, too. Those little savings can help you reduce the costs of moving a lot when they all add up.
Above all else, make sure that you’re not in too much of a rush to buy. This is an easy way to take out a loan before your credit allows you to get the best possible deal or to get battered and bruised in negotiations if the buyer is all too aware of how keen you are. Slow and steady wins the race.