Are You Missing These Simple Tricks To Buying A Home For Less? November 21, 2016My MoneyOff

Buying your first home is a tremendous moment in just about anyone’s life. You’re excited to be making a big step towards financial independence. At the same time, it’s scary figuring out whether or not you’re actually going to be able to afford it. It’s a big commitment, but it’s one that you can actually make a great deal easier on yourself. Getting the best deal out of your home means taking the time to get your finances in order. Here’s how you do that.

Scout for the big opportunities. This point isn’t going to apply to everyone because the opportunities we’re talking about are very specific. However, there are a lot of people who are eligible for great first-time home buying deals. Without doing a bit of scouting, you might never know how much you’re able to save. For example, low and middle-income Americans might benefit from things like Fannie Mae’s loan. That allows people to buy a home with as little as a 3% down payment. Meanwhile, another great opportunity is Georgia State’s Dream Program. This offers a fixed rate loan for people under a certain earning threshold. Whether you want to be able to get a home with lower down payments or a better deal on mortgage repayments, there are opportunities that can help you.

Save more, mortgage less. If you’re going the traditional route of getting a loan, the best advice we can share is to slow down a moment. Don’t go for a loan as soon as you have the down payment required to become eligible. We know that there are a lot of reasons people may be impatient to get their own home. But if you’re willing to take your time and save, the deal will be significantly better for you in the long run. Mortgage rates decrease based on how much more you’re able to put into a down payment. If you’re worried about long-term affordability, then save more for the short-term payment.

Make your savings automatic. The best way to establish a down payment is to save, obviously. But if you want to do it quickly, then you should get smart about exactly how you save. A lot of people will save from the money that is left over after they’ve spent most of their paycheck. Essentially, they’ll put in whatever’s left over after both the essential and nonessential costs. That’s an easy way to end up with very little saved. Instead, put together a budget. Set aside all those essential costs. Allocate yourself some non-essential funds, if you like. But the point is to find that portion of money that should be going towards your savings. Then, automate your savings account so that money is paid in as soon as you get your paycheck. The less time it spends lingering in your regular current account, the less chance it’s going to get spent.

Don’t forget your credit. Being able to make a bigger down payment isn’t the only thing that will contribute to the mortgage rates in the long term. Your credit matters, too. Credit isn’t only something to be protected. It’s something you can build. To learn how to start building credit, you have to start taking credit out. But do it strategically. Have a plan on how you’re going to borrow and how you’re going to pay it back. For example, there’s the secured credit card. Unlike regular credit cards, you pay those cards back before you start spending. They have fairly high-interest rates, but they’re a good way to make sure you build your credit without borrowing more than you can afford.

Be a smarter buyer. The impact you can make on your mortgage rates are the biggest factors in saving when buying a home. But that’s not to say there isn’t some room for improvement in how you negotiate. We all look for a dream home, but a savvier buyer is willing to buy a home with some problems, if it means knocking down the price. Besides that, you should be willing to move quick and do your research on the home. Not just an inspection, but using public records and real estate searches. Base your office on data for matching homes, not the price listing.

The two steps that are going to make the biggest difference in buying a home is making a big down payment and taking care of your credit. Obviously, these steps take time, so don’t rush into buying a home. Take your time. Save up. Use credit responsibly.

Photo by LDprod | Shutterstock

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