You’ve decided you’re ready to buy a house. Congratulations! Homeownership is a fantastic accomplishment and milestone. However, it’s no secret that homes are expensive. The average cost of a home in the United States is over $200,000! This can be a significant financial undertaking that will hurt your wallet if you’re not careful.
But don’t feel discouraged – there are plenty of ways to save money when buying your first home. Being strategic and mindful of where you spend your money can help you successfully buy a home without breaking the bank. Here are some practical ways to spend less when buying a house:
1. Get pre-approved for a mortgage
Before shopping for your dream home, get pre-approved for a mortgage. This will give you an idea of how much money you have to spend, and it will help to keep you from overspending on your dream home that may be out of your budget. Pre-approval can also help you negotiate a better price on your home. Ask your lender about their pre-approval process and get started as soon as possible.
2. Shop around for the best interest rate
Once you know how much you have to spend, start shopping around for the best interest rate on your mortgage. Interest rates vary widely between lenders, so it pays to shop around and compare rates before settling on a loan. Look online, talk to friends and family, and consult with multiple lenders to find the best interest rate possible. But beware of low-ball interest rate quotes that may not be available once you’re ready to commit.
3. Negotiate
Once you find the home you want to purchase, don’t hesitate to negotiate with the seller on the price. In most cases, the seller will be open to negotiating, especially if they’ve been trying to sell the home for a while without any offers. Sometimes, sellers will offer a house and land package deal that can save you money in the long run. This is especially true if the seller is motivated to sell quickly.
4. Don’t skimp on your down payment
While it may be tempting to put as little money down as possible on your new home so you can have more money for upgrades and furnishings, resist the urge! A larger down payment will help reduce your mortgage payments and save you money in the long run by avoiding private mortgage insurance (PMI). A good rule of thumb is to put down 20% of the purchase price, but if you can’t swing that, ask your lender about low down payment options that may be available to you.
5. Consider all costs involved
When budgeting for your new home, don’t forget to factor in all of the other expenses involved in homeownership, like property taxes, insurance, and repairs/maintenance costs. These additional costs can add up quickly, so be sure to factor them into your budget before making an offer on the house. You can also talk to the seller about negotiating these costs into the home’s purchase price.
6. Avoid impulse buys
Avoid impulse buys at all costs when buying furniture and decor for your new home! It can be tempting to buy everything at once when you first move in, but this will cost you more money in the long run. Instead, take your time and only buy what you need as you need it – this will help you stay within budget and avoid buyer’s remorse later down the road. Keep your emotions in check, and don’t let the excitement of buying a new home cause you to overspend.
7. Do your own research
Before hiring someone to help you with the home buying process, do your research first. Many resources are available online and at the library that can help you learn about the process independently. You can also talk to friends and family who have recently gone through the home buying process for advice. Don’t be afraid to ask questions – the more you know, the better you’ll make informed decisions about buying your new home.
8. Do it yourself whenever possible
Finally, one of the best ways to save money when owning a home is by doing as much as possible yourself! From painting walls to fixing plumbing issues, there are tons of tasks that even inexperienced homeowners can do themselves with just a little research online or YouTube tutorial guidance. They might not be perfect at first, but practice makes perfect, and DIYing will save you money compared to hiring professional help whenever something needs fixing around the house! Plus, it’s really satisfying being able to say, “I did that myself.“
Owning a home is not cheap – but there are plenty of ways to save money throughout the buying process if you know where to look! Following the practical tips above, you’ll be well on your way to spending less and saving more as a new homeowner.