How to save money when buying a home

With these tips you can save money when buying a home. You can save money with the initial purchase and with the monthly payment.

Difficulty: Moderately Challenging

Instructions

Things You'll Need:

• Savings plan
• Earnest money
• Down payment
• Be willing to negotiate

1. The first thing you will need to do is develop a savings plan. The best way to get a lower monthly payment is to get a low loan percentage rate and make a high down payment on the home. Figure out how much you want to spend on a home and then figure out if you want to put down 10 or 20 percent. Once that amount is figured you can determine how much you will need to save every month to acquire your down payment goal.

2. When you are shopping for a home, look at several home before you buy. It will keep you from making an impulse buy and paying too much. Most home prices can be negotiated down a bit. Do your research on what the home is worth and figure in how much repairs or home improvements will cost to make it into the home you desire.
   Waiting a few days to think over your offer also helps. That way you won't have to feel that you should have offered less if you had just stopped to think about it.

3. Shop around for a home inspection. Don't just let the realty company choose the home inspector. They may use someone for every home inspection who charges a much higher rate than someone else you could find. Also, if you know someone who could take a second look at the home as a favor, let them look over the home after your inspection comes back and see if they think the inspection was accurate.

4. When you put an offer down on a home you will be required to place earnest money down to show that you have a serious offer. The earnest money is non-refund able once you release it so make sure you are approved for the home loan and that you want the home 100% before you put the earnest money down. This will prevent you from losing the money due to a loan being turned down or not feeling that the home was actual right for you.

5. Shopping around for a low loan percentage rate may take a while but in the long run it will save you a lot of money. The higher the loan percentage rate the more you will end up paying on the home over the years.

6. Don't let too many places run your credit for a loan. Each time your credit is checked it will knock your credit points down. Have a good idea before hand what your credit score is and ask the lender what they offer for your credit score.

Tips & Warnings

• Remember the more you have as a down payment, the lower the monthly payment on your loan will be.
• Take into account that after you purchase a home (especially if it is older) there may be things that will initially go wrong. Set aside a small amount of money for unexpected repairs.

[Feather]

on 9/7/2008 Excellent article. We just bought a new (old circ. 1860) house and things were a lot different than 25 years ago!

[HardworkinJudy]

on 8/30/2008 Excellent tips. Thanks. Some people do not realize when they shop around that their credit score takes a hit.