Buying a home is a big step in life. How to take control of the homebuying process and save on your new home is an article you will need to read and save. You want to make sure that you’re getting the best deal possible. However, there are many obstacles on the way. Calculations, approvals, and market instability are just some of the challenges that homebuyers face.
As the whole process isn’t easy to navigate, it’s always good to rely on expert advice, advises Uptown Dallas Properties. In this article, you’ll learn all about various ways to take control of the homebuying process. Also, we’ll list practical suggestions that allow you to cut costs on buying your new home.
1. Compare Realtors
Never settle for the first one you find on the internet. And it’s better not to rely solely on personal references. Of course, you can always check out the Realtors that your friends and family vouch for. But they could have picked one based on advertising or some arbitrary reason. Call several, ask them some questions and maybe even meet. Select the one you are most comfortable with.
2. Save some money
Buying a house is a major investment. Most people don’t have disposable assets to cover the whole purchase. Still, the more liquid funds you have for buying your home, the better off you will be.
That’s why it’s smart to save up enough money for purchasing your home. Now you may wonder how much money is exactly needed. That depends on your future home’s price and all the associated expenses.
Here are the main reasons you should put aside enough money for the purchase.
- Closing costs. Don’t forget that you need to have available money for closing costs. On average, you can expect to pay 2-5 percent of the total selling price. In some cases, you can ask the seller to cover this for you. However, in a competitive market, it is best to pay your own to win the bid.
- Down payment. Every percent of down payment gives you additional equity as hedging when the market takes a downturn. Experts quote many suggested down payment percentages. Most estimate somewhere between 3% to 8% as a good starting point. But paying down a bigger amount never hurts if you have the means and no other debts. Don’t forget though, investing early in your 401K or IRA and yield big benefits years down the road.
- Repairs and maintenance. Many fresh homeowners forget to factor in a budget for repairs and maintenance. This is very common among people who previously lived only in rental properties. Now you should budget for fixing potential issues in your home, including:
• Any type of appliances
• Electrical system
• General wear and tear
• HVAC system
- Moving. There are many costs related to moving. In most cases, you have to hire a moving company. And there’s always the chance that something doesn’t fit or work in your new home. These appliances and items need replacement, sometimes as soon as possible.
3. Get a mortgage preapproval letter
Bidding against other buyers gets easier when you have a mortgage preapproval letter from a local reliable lender. This letter proves that you are serious about buying a home. The lender knows that your loan is likely to close.
It is smart to get a preapproval from local lenders with great online reviews. Not just great company reviews but also the individual loan officer. A professional loan officer can make a big difference in your home buying experience. The loan officer can tell you exactly what price range you should shop for so you don’t waste time and emotional energy on homes you can’t qualify for.
Here are the things you need for getting a preapproval: Get a full list here.
• Information about your employment and salary, normally a 2-year history is required.
• Amount and source of down payment
• Social Security numbers from you and co-borrowers
• Any debt obligations
• Tax returns, W-2s, and 1099s from the last two years
• Information of bank, checking, investment, and savings accounts. Normally, the actual statement is required along with 2 months history.
Later on, a preapproval letter saves time. When the time is ripe for an offer, your lender already has full information for processing your loan.
4. Make an off-peak home purchase
Winter months are slower for the housing market. Home sellers become more open to negotiating better prices. And you won’t have to participate in the bidding wars that take place in the spring and late summer.
Note that not all markets have the same off-peak seasons. For example, a buyer’s market in New England is a busy period down in Florida. Learn about your preferred home market’s peak and off-peak times to pick the best period.
5. Schedule a home inspection
Home inspections aren’t for free, but they can save you money in the long run. Make sure that your home inspector belongs to one of these organizations:
• The American Society of Home Inspectors
• The International Association of Certified Home Inspectors
Then you can be sure that your inspector is qualified to carry out the work.
Your home insurance company may ask for a four-point inspection. This procedure covers electrical and HVAC systems, plumbing, and roofing.
However, a full home inspection is more thorough. You are better off keeping these inspections separate. The full inspection may uncover minor issues that don’t personally bother you. But even these little things could influence the insurance company’s decision. It’s better not to share the unimportant findings with them.
The bottom line: homebuying is a process and saving on your new home requires work.
Buying a new home needs your time and focus. Use the tips outlined in this article to save on your new home and ease the whole process. For more tips and cost savings, connect with
Your Local, Direct, 5 Star Rated Mortgage Lender, Specialty Lending Manager NMLS 217454
Office: (214) 945-1066
Service First Mortgage NMLS 166487
6800 Weiskopf Ave #200, McKinney, TX 75070
Licensed by the Texas Department of Savings and Mortgage Lending (SML) Mortgage Banker Registration. Service First Mortgage is an Equal Housing Lender. This is not an offer of credit or commitment to lend. Loans are subject to buyer and property qualification. Rates and fees are subject to change without notice. The views expressed on this site are those of the individual author and do not necessarily reflect the positions, strategies or opinions of Service First Mortgage or its affiliates.