When you are shopping for a home, there is a lot you can do to keep your costs to a minimum, helping you maximize your returns on this important investment. Below are some simple practices that can make a major difference in your costs.
8 Practices Will Help You Save Money When Buying a Home
- Start by getting pre-approved. When you get pre-approved for a mortgage, two things happen:
- You get a letter that tells sellers you are pre-approved for a certain amount (and are therefore a viable buyer).
- You find out how much you can borrow.
You can set a budget more easily for a home once you are pre-approved for a mortgage. You will know what your mortgage will cost you, and you can consider this in connection with the other costs of homeownership. This can help you to establish your price range and shop within it.
- Avoid acting out of FOMO. Sometimes fear of missing out prompts homebuyers to make a hasty decision. They may be afraid of missing out on current rates, or on a particular home. Either way, those types of mistakes can sometimes be costly. Try and be patient and take your time when you are picking out a home and a mortgage.
- Assess whether a fixed or adjustable rate mortgage makes sense for you. Many homebuyers believe that it is always more affordable to purchase a home with a fixed rate mortgage. Although that is correct in many cases, in some situations, you can save money with an adjustable rate home loan. During your consult, we can explain those scenarios to you so you can choose the interest rate format that will help you save.
- Pay off your home loan early. Once you do complete the process and buy a home, see if you can pay off your mortgage early. When you make early payments, be sure that you specify that the lender should apply them to the loan principal. If you can finish paying off the loan early, you will spend less money on interest.
- Give your credit score a last-minute boost. Going back to the mortgage process, one surprising way to save money is to raise your credit score. If you are right about to apply, you might think that this late in the game, there is nothing you can do. But many borrowers are able to raise their scores even with very little time to spare. By doing so, they are able to qualify for more competitive rates.
- Document all income. Does your W-2 record all of your income? No? Then make sure you report the rest of your income during the loan application process. The simplest way to do this is using your bank statements. As with raising your credit score, reporting all of your income can help you present yourself as a more qualified borrower. As a result, your interest rates may be lower and you may qualify for better mortgage terms.
- Consider making a 20% down payment. Even if you qualify for a mortgage with a low down payment, you might want to reconsider your options. If making a 20% down payment will not put a strain on your current finances, it may be your ticket to avoiding having to pay for mortgage insurance. That can add up to big savings.
- Work with a mortgage broker in Florida. One more trick for saving money when you buy a home is to work with a mortgage broker rather than a direct lender. A broker can shop for competitive rates and terms from a network of lenders throughout the state. That means that they can quickly and easily bring you deals that you might have missed on your own.
Buy a Home in Florida Now with PLC
You now have some suggestions that can help you to purchase a home affordably regardless of your scenario.
As a local mortgage broker, Premier Lending Corp can help you save money when you buy a home in Cooper City, Pembroke Pines, Fort Lauderdale, Miami, Hollywood, or elsewhere in FL. To get started, please call us now at 954-840-8811 to schedule your consult.