Buying your own home is one of the biggest financial decisions you’ll make in your life. It’s complicated and even a little scary, but there are a few simple things you can do to make it easier and save yourself money at the time you’re making your purchase and over the life of your mortgage.
Continue reading for five great money saving tips you can employ when buying your first home.
Whether you are dreaming of a ranch in the country or a project home in Sydney, one of the best things you can do to prepare for home ownership is to reduce your debt. Not only does it make room for the mortgage payment in your budget, you’ll get a better interest rate that can save thousands over time.
What Can You Afford
Don’t base this off of the highest loan amount that you can get approved for because going for the maximum can leave you in over your head later on. Instead, look at your budget and decide what you are comfortable with for a monthly payment. You can start with a home loan eligibility calculator to help you choose a price range.
Get Expert Help
Getting a professional home inspection will help you to find problem areas before you buy and save you money on repairs. Even if you are a handy person, it’s better not to assess things on your own. If the inspector finds something you can ask the seller to deduct that amount from the price or to fix it before you sign the contract, plus you’ll know exactly what you’re getting into.
The professionals helping you to find your dream home should also be willing to help you, from your realtor or your mortgage broker to your conveyancer. Ask questions and be suspicious of anyone who doesn’t seem willing to explain the process. Remember, they are working for you.
Know What Your Agreeing To
There can be costs that are separate from the mortgage, such as Homeowners Association fees. These can range from $50 to hundreds per month on top of your mortgage and taxes. Read HOA agreements thoroughly and be sure you understand what the additional cost will be. Take into consideration concessions such as stamp duty or removal costs if you plan to renovate part of the property.
There are also helpful options, such as a First Home Owners Grant, that you may qualify for to help with the cost of buying your first house. Look at the whole picture, not just your monthly house payment.
Kinds of Mortgage
All mortgages are not created equal, so do some reading and see which kind of mortgage will be best for you. It’s smart to talk with your realtor or mortgage broker, but in the end, you will be the one making the payments so it’s important to understand what you are signing up for.
Having Money Saves Money
It’s not a requirement, but if you save up a deposit of at least 20% not only will it improve the interest rate you will be offered but you can avoid having to pay for Private Mortgage Insurance. A PMI agreement protects the seller in case you default and it can add up to thousands over the life of your mortgage.
Ready To Make An Offer
Once you fall in love with a particular house chances are someone else will be interested too, so be prepared to act. By knowing how the process works, what you can pay and being ready to make an offer you will be in a position to snap up that perfect house before anyone else can.