If you are in the market for purchasing a new home, you are one of the 35% of homebuyers in the country, sailing in the same boat. In simple words there are a large number of people like you out there that are completely new to this process. Even if you are buying your second or third home, it’s very likely that the market has evolved since the last time you made real estate transaction.
This means you may need to get some tips for buying a house and conduct a certain amount of research before making any key decisions. It takes some effort and ingenuity to identify how you can save some money on homeowners insurance, closing costs as well as some other major items.
Here are 5 tips first-time home buyer tips:
You can save some money in closing costs when you get your mortgage through your bank. The closing costs vary by state, but on average you can easily expect to pay 2%-5% of the purchase price of your home. New-build homes tend to cost more than resale ones and this also increases the closing costs of the former. If you have multiple accounts with your bank, it should be the first place to get a mortgage quote.
Some banks offer a relationship credit (which can vary from one establishment to the next); this helps offset your closing costs. The relationship credit is generally proportional to the amount of assets you keep there. If your bank doesn’t offer a relationship credit, shop around a bit and find out which one does. You can then consider moving your accounts to that bank and getting your mortgage from there.
Even if you are planning on getting the mortgage from your bank, it’s important to check out the market first and get quotes from at least two lenders; this will help you comparison shop for the lowest closing and interest rates. Once you get a quote, you can be transparent with both the lenders and keep them informed about what the other lender is offering. This makes them more competitive and you may end up getting a better rate in the bidding water between them.You can use sites such Nerdwallet to compare the rates that different lenders have.
The lender will always hire a professional, independent appraiser to assess what the value of your new home is, before you sign on the dotted line. This appraisal protects your, as well as the bank’s interests. The appraiser will assess the property’s worth basis various aspects such as condition, age etc.
If the appraisal is lower than the offer price you have put forth, the bank will only give you a portion of the mortgage amount requested by you and the rest will have to be paid out of your pocket. You can use this appraisal to negotiate with the sellers and lower the purchase price. If you are lucky, the sellers might just lower their selling price to the amount quoted by you.
When you are buying your first home, you need to get a little creative with how and where you can save some money. Some insurance companies will give you a discount on your home insurance if you buy multiple policies from them.
So if you get your life insurance or auto loan from them, that can help you get a discount on your home insurance. In this case as well, it’s important to shop around and compare policy costs and discounts offered by different insurance companies.
If you are unable to terminate the lease and find yourself paying the rent for your older home as well as the mortgage payment for the new one, you should consider renting the new house off temporarily. You can use the income from the rent to pay your home’s expenses and mortgage and may find that you still have some money left over every month.
You can use that to pay the rent of your older apartment and save a significant amount of money in the bargain. While this may not be an option for everyone, it’s something you should check on and do if possible.
Different people have different situations and there are bound to be a number of variables depending on which state you live in, the type of home you are considering to buy and more. Regardless of your circumstances and situation, when you are buying your first home you need to get a little creative and look for ways in which to save some money.