Learning About Finance and Money
How To Save Money Upfront When Buying A Home
Jordy De Pijper
Buying a home is one of the most expensive purchases you will make during your life. But just because you're spending a lot doesn't mean you need to break your budget. To keep upfront costs as low as possible, keep these tips in mind when taking out a mortgage.
1. Shop around for the lowest interest rate.
Different mortgage lenders charge different interest rates. Rates also vary depending on the type of mortgage loan you take out. Your rate directly impacts your monthly payment from day one, and it has a significant influence on how much you pay throughout the life of the loan.
2. Consider an adjustable-rate mortgage.
Typically, if you plan to stay in the property indefinitely, a predictable fixed-rate mortgage tends to be the best option.
But if you plan to move in a relatively short period of time, you may want to consider an adjustable-rate mortgage. You never know how the rate is going to adjust, but if you plan to sell again before the adjustment period, that's okay. Generally, these loans offer lower introductory rates.
3. Look for a loan with a low down payment requirement.
Making a large downpayment can save you money over the life of the loan, but if you're trying to get into a home with low upfront costs, you need a low downpayment.
4. Negotiate to have the other party cover closing costs.
Usually, the buyer pays for most closing costs, but regardless of which side of the table you're on, there is some wiggle room here. Try to negotiate to have the other party cover the closing costs. This tends to work better if you're a buyer in a buyer's market.
5. Buy during the off-season.
During the off-season, sellers who need to get rid of their homes are frequently willing to cover closing costs or make other concessions to get you into their homes. During the off-season, prices also tend to drop a bit, and real estate agents may have more time to show you extra properties.
If possible, try to buy during the off-season. This is particularly pronounced in vacation towns or areas with seasonal populations.
6. Work on your credit score.
Before applying for a mortgage, spend some time improving your credit score. The better your score is, the better your mortgage terms will be. Some real estate agents or lenders can give you advice on credit repair. Alternatively, download an app and follow its credit score boosting tips.
Share
Hello, my name is Remy. When I was a young kid, I tucked all of my funds into a savings account set up by parents. When they found out I was saving every last dime, they helped me split the funds into a sustainable allowance for saving, spending and giving. I would like to teach you to use this method on your monthly funds. A healthy budget allows you to cover all of your obligations plus giving back to your community. I welcome you to visit my site often to learn all you can about finance and money. Thanks for coming by.