Monday, March 13, 2017, AM | 1 Comment
No matter what type of home you buy, you should expect to devote a large portion of your salary to paying for it over the next 10 to 30 years.
Since homes cost tens or hundreds of thousands of dollars, it is important to look for savings wherever you can find them.
What are some tactics that you can use to keep costs down when purchasing your next home?
Ask for Seller Concessions
Seller concessions can help you pay for closing costs such as a down payment or the commission paid to your real estate agent.
In most cases, the seller can contribute up to 6 percent of the home’s purchase price.
Therefore, if you bought a home for $100,000, the seller could provide up to $6,000 to help you cover eligible costs.
If a seller isn’t willing to provide concessions, it may be possible to ask a lender about credits that it may offer.
Negotiate Homeowners Association Fees
If you buy a home that is part of an HOA, you may have to pay an additional fee on top of other mortgage costs.
However, it may be possible to negotiate this fee ahead of time to help lower your monthly housing costs.
Some companies, like J & N Realty Inc., realizes that even if the fee is not reduced or waived, you may still benefit from the homeowners association because it may provide lawn or home maintenance services that save money in the long run.
Buy Points to Keep Your Interest Rate Low
When a lender asks if you want to buy points, it is asking if you would like to prepay some of the interest on the loan.
This may be helpful because it will lower your interest rate for the life of the mortgage, which could reduce the amount that you actually pay for the right to finance your home purchase.
In some cases, you may be required by the lender to make such a move to qualify for your desired type of mortgage.
You may also save on the cost of a mortgage by putting enough down to avoid mortgage insurance.
A home is something that you should be able to enjoy and get value out of for years to come. Each dollar that you save when you buy your property can then go into upgrading the home or toward a savings account that may be used for buying your next property.
Either way, it gives you the financial flexibility that you want and need moving forward.
Rachelle Wilber is a freelance writer living in the San Diego, California area. She graduated from San Diego State University with her Bachelor’s Degree in Journalism and Media Studies. She tries to find an interest in all topics and themes, which prompts her writing. When she isn’t on her porch writing in the sun, you can find her shopping, at the beach, or at the gym. Follow her on twitter and Facebook.