This is a guest post from a reader, Margie Baker.
Buying a home is a big decision. It is one of the most expensive purchases you will ever make.
There are many ways to save money on this purchase that you may not have considered.
Here are a few:
1. Shop around
Go to your bank, as well as seeing a mortgage broker for a pre-approval.
While brokers are able to shop around to numerous lenders to get you the lowest interest rate, also going to see your bank is beneficial.
In some cases, your bank may be able to give you a lower rate based on your relationship as a client.
At the end of the day, the lowest interest rate is what will save you the most money overall, so shop around to find the best price.
2. Hire a realtor.
Typically the seller pays both the buyer’s and seller’s side of commission; which means when buying a home you won’t have to pay to utilize the services of an experienced agent.
So, you might as well hire an agent to look out for your best interests – especially if their services won’t cost you anything.
3. Learn to compromise.
Make a list of your needs and wants in a new home. Oftentimes, these 2 categories get confused and many wants end up in the needs column.
Is having an ensuite bathroom a must have or a nice luxury? Is not having a finished basement a deal breaker?
Consider saving up and doing certain renovations yourself. This will save you the cost of labor, as well as money on your mortgage.
Another money saving compromise is location. You might be set on a particular neighborhood, but even considering a house a few blocks over could save you thousands.
Be open and willing to compromise to get the most bang for your buck.
After finding the house you want to buy, make sure to negotiate. This is one of the best ways to save money in a real estate transaction.
A seller is not always worried about the sale price – often there are other factors that they also must consider.
Many deals happen when a buyer allows the seller to choose the possession date or to take the washer and dryer.
5. Avoid paying mortgage premiums.
A mortgage premium is a fee added to the mortgage amount by a mortgage insurer, when the borrower has less than 20% saved for a down payment.
If you’ve been able to save up 25%, then these fees are waived which will save you a ton of cash.
If you currently own a home but don’t have 25% equity to apply to your next house, you can also save in this area.
Not many people know, but you can port your mortgage premium to your new house so you only end up paying the difference. This is something that must be requested on your behalf so make sure you ask your banker or broker about it when the time comes.
6. Timing is everything.
If you aren’t in a rush to own a home, then buy a house in a buyer’s market.
Typically, the best months are November and December. Most people who are selling their home in these months are doing so because they need to sell and not because they are waiting to get the best price.
This is the best time to negotiate and get a great deal.
Using even just a few of these tips will help you save on your home purchase and leave money in your pocket.
Be smart and do your homework before you buy. You will be glad you did.
Margie Baker has been a licensed realtor for Century 21 for the past 7 years. She lives in Saskatoon, SK and loves helping others save money on their home purchases.