Buying a home can be an exciting time in your life. However, purchasing a new home can be expensive; therefore, it is important that you save as much money as possible when buying a home. Here are five tips that you need to know in order to save money and get the best price for your new home.
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Look at the Appraised Value
Before you can obtain a mortgage, the lender will order an appraisal of the property. The lender does this because if they are forced to foreclose on your property, they want to make sure they get a good price for your home. If the appraisal is less than what you are paying, you might be paying too much for the home.
Get Affordable Home Insurance
Home insurance can protect you against huge financial losses. It will pay for damages that occur because of theft, fire or flood. In most cases, your home owners insurance will be included in your mortgage payment. It is wise to search around for home insurance companies and compare insurance rates and coverage. You might want to consider raising your deductible; however, you want to make sure you can pay for any damages that occur.
Reduce the Life of the Mortgage
Many people choose to obtain a 30 year mortgage to keep their monthly payments lower. However, with interest rates at an all-time low, you can find a 15 year mortgage at an affordable rate. You will shave years off the mortgage term, and you could save thousands of dollars. The interest rate will be lower, so your payments will be more affordable.
Negotiate a Price
In some cases, the seller will be in a hurry to sell the home, so they are willing to accept a lower price. You can test the sellers to see if they are prepared to sell the home for lower than the asking price. The seller will probably counteroffer, and you can keep negotiating until the home is in your price range.
Eliminate your Private Mortgage Insurance
Private mortgage insurance can be expensive, so you might find ways to get rid of the insurance. Some lenders require private mortgage insurance; however, if you have 20 percent equity in the property, you can ask your lender to cancel your private mortgage insurance. You can save money by doing away with private mortgage insurance.