Buying a home is likely to be the most expensive purchase you’ll ever make. Whether you’re looking at chilly Ottawa real estate or exotic Florida beach houses, buying property is never cheap. But it can be… cheaper. At least a little.
Here are three tips to help you save money the next time you buy a home.
Improve your credit score
When looking for a mortgage loan, a lot of factors affect how good a deal you get. One of the biggest is your credit score. The better your score, the better the deal. Before you begin looking at properties, it’s a good idea to start working on improving your standing.
Of course, it’s hard to improve your credit score if you don’t know what yours is. Get a credit report, then brainstorm different ways to clean it up. If you have outstanding debts, try your best to pay them off. Make sure to keep up with regular payments and avoid applying for too many lines of credit in a short period of time.
Don’t hesitate to ask for help from family or friends either. If someone you know has a good credit history and is willing to add you to their account, it could help boost your score instantly.
Don’t avoid fixer uppers
One mistake too many home-buyers making when looking at properties is turning their noses up at fixer uppers. Why buy a house that you’re going to have to sink more money into later? Why not just buy one in perfect condition now?
Well, because there’s no such thing as a house you won’t have to sink more money into later. A newer house might last a little longer, but accidents can happen at any time. No house is immune from needing repairs and renovations.
Also, because fixer uppers are a lot cheaper. In fact, if you’re looking to save money, a fixer upper can not only cost less to buy, but the amount you spend on repairs likely won’t add up to what you would’ve paid for a newer house. Best of all, if you resell later, all the value you added is sure to pay off big time.
Comparison shop lenders
Home-buyers, especially first-timers, can sometimes be too eager for their own good. House hunting can be stressful, and it’s tempting to just immediately accept the first mortgage offer you get. If you really want to save money, though, don’t be afraid to comparison shop.
Go to multiple lenders and see who offers the best deals. See who is willing to negotiate. In addition to better interest rates, some lenders will offer perks like waiving the requirement for private mortgage insurance or covering the cost of a home inspection.
For maximum leverage, tell lenders upfront that you’ll be comparison shopping. If they know they’re competing against other lenders, they might be more inclined to sweeten the pot. In any case, it’s always better to have multiple options.