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This Old House - Do-it-Yourself

Dream of Home? How to Make Buying a House an Affordable Option for You

Written by Posted On Friday, 22 September 2017 15:44

One of the best ways to build long-term wealth is to buy your own home and with prices property values expected to rise 5% in the coming year, now could be a great time to buy. While buying a new home can be a great investment, it is also a very big decision that needs careful consideration. For those that are looking to buy a home, there are several tips that should be followed that should help them get their dream home while also staying in budget.

Improve Mortgage Qualification

When you are looking to get a new home, the first way that you can save money is by getting a lower-rate mortgage. Mortgage interest rates have risen slightly recently, and are expected to continue to do so, but are still below 5% and considered to be historically low. Those that have great credit scores and the income to support the loan will qualify for the lowest rates available. While it may not seem like a big deal, even saving 0.50% on your rate could save you thousands of dollars over time. Prior to applying for a loan, you should make sure you know your score and look for ways to improve it if it is low.

Negotiate Insurance

Another way to save money and make your property more affordable is to save money on home insurance. Home insurance is a practical necessity, but there are ways to make it more affordable. One great way would be to combine all of your consumer insurance policies together. For example, if you also have an auto insurance policy, you could save hundreds of dollars per year by carrying all of your policies with the same company.

Shop Around

When you are looking for a new home, it is also important that you shop around for properties. While you may see a great home in your budget the first day, you should at least spend some time reviewing other homes for sale and recent comps. This will help to give you a better idea of market value and could be used to negotiate a lower price.

Credit Negotiations

Beyond the final purchase price, you can also try and negotiate additional credits. Some of the most common credits will include a credit for closing costs, credits for past due repairs identified, and even a credit to pay for a home warranty. All of these will help to reduce the net cost and down payment you need.

In conclusion, buying a new home can be a great long-term investment. While there are benefits that come with homeownership, some are concerned that they may end up buying a home that they cannot afford. Fortunately, there are several tips that can be followed which will help to find the home of your dreams and stay within your budget.

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