Buying and owning a home is a satisfying and lucrative investment strategy. Unlike other forms of investment like stock and bonds, you can leverage buying a property by paying a deposit and paying off the balance with interest, over time.
For first-time buyers, owning a home is a tremendous achievement. However, it has a fair share of its financial problems.
The potential home buyers are keen on closing the deal that they fail to consider long-term financial implications. Don’t make this mistake.
Here are a few tips on how to save money when buying a house.
Check Home Inspection Reports
Take time and read through a professional home inspection report. Use this report to determine whether the property is worth your money or not.
For instance, the house may seem amazing at first. However, as you walk through the house, you notice some problems on the floor, molds in the center, or the kitchen island in the center.
In most cases, the sellers will do a facelift to make their property likable by sellers. Don’t fall for this trap.
Engage a home inspector for a comprehensive analysis of the house. As experts, they’ll uncover issues that you wouldn’t think to check when walking through.
The inspection report saves you a lot of money in potential future repairs. Further, you can deduct the repair expenses from your offer or request the seller to make repairs before the sale.
Get the Best Mortgage
A mortgage offers you an opportunity to own a house on credit. However, many people make the mistake of choosing the wrong mortgage.
For instance, if you have a mortgage for 15 years and another for 30 years, which one would you choose? Of course, many people will opt for the 30 years one due to low monthly premiums.
Well, that might not be the smart move.
Yes, with the 15 years’ mortgage, the monthly premiums will be high, but the loan interest will be low. Such a mortgage saves you thousands of dollars in the long run.
Check the Home Owners Association (HOA) Contract
The HOA fees are dependent on your geographical area and the amenities present. The fees vary between $50 to several hundred per month. Well, this is in addition to your taxes, insurance, and mortgage.
Now you see how owning such a home would be expensive especially if you don’t budget for HOA? Pay keen attention to all the costs associated with owning a home as this can be a budget buster.
Buy Property in an Up-Coming Area
We all want to live in a hot neighborhood. However, buying a property here wouldn’t be the smartest decision if you’re looking to save money.
Instead, buy a property nearby and save 20-30 percent of the purchase price. Even better, the appreciation rates will be faster here.
You can save more money by buying a house that needs some repairs and near a hot neighborhood. You can then make updates and repairs a little bit at a time depending on the fund's availability.
Buying a house is a big financial investment. Take time and ensure that you'll be comfortable and satisfied with the property you buy. The above steps can help you save on cost.