Mortgage lender Fannie
Mae just made a move to make homeownership more affordable, and it's one of
many things that can help you save some cash when buying a home. If you're not
taking advantage of every money-saving opportunity out there - and there are a
lot of them - you're just leaving money on the table.
1. Take advantage of new programs
The aforementioned
Fannie Mae program "will now pay your closing costs, up to 3% of the price
of the home—provided you take the mortgage giant's home-buyer counseling course
first," said Realtor.com. Called the HomePath Ready Buyer program, it "allows
first-time buyers (defined as those who have not owned a home in the past three
years) to take an online course, get certified, and become eligible for what
could amount to significant savings. For instance, on a $150,000 home, Fannie
Mae could contribute up to $4,500 toward your closing costs—which typically
range from 2.5% to 3% of a home's price."
2. Ask the seller to pay closing costs
In an appreciating
market, you may have a hard time getting the seller to kick in—especially if
they have other offers to consider. Make sure you ask your real estate agent
for advice (and listen to it.) You don't want to offend or amuse the seller
into outright rejecting your offer.
3. Negotiate everything
Want the seller's
refrigerator or dining room set? Ask for it. Could be that they're trying to
get rid of them anyway.
4. That goes for new homes, too
If you're buying a new
home, you may not have a ton of negotiating power when it comes to the sales
price, but you may when it comes to upgrades. If you love the wood floor or
quartz counters in the model, you just may be able to get them thrown in at no
extra cost.
5. Use your builder's in-house lender
Another way to
potentially save money on a new home is to use the builder's in-house lender,
if they have one. A builder can't require you to use their lender, said
Bankrate, but they may offer incentives to do so.
6. Fix up your credit
NEA Member Benefits
found that poor credit can account for an extra $82,000 in interest on a
$250,000 home loan. "The total interest paid for a home with a 630
score—nearly a quarter-million dollars over the lifetime of the loan—is enough
money to buy a second house. There is always a cost to credit, and that cost
can increase tremendously due to a low credit score."
7. Shop for the best loan
Settling for the first
loan that comes your way might not be the best bet. Different lenders offer
different rates. Shop around to see what your best options are.
8. Get a co-signer
If you're having
trouble qualifying for a home at a low enough interest rate, a cosigner can
help. "Part of that person's income can be considered toward your loan
amount regardless of whether the person will actually be living with you or
helping you pay the bill," said Investopedia.
9. Put 20 percent down
Twenty percent is the
magic number when it comes to whether or not you have to pay Private Mortgage
Insurance (PMI). PMI can add hundreds of dollars to your monthly payment, and
can't be removed until sufficient equity in your home has been realized. If you
can swing 20 percent, it will save you money. If you can't, try asking a family
member for a gift or get down payment assistance, said Chase.
10. Buy a fixer-upper
A lesser-known FHA loan
may present a great opportunity for those who are having a hard time finding an
affordable home in a competitive market and who love a project.
This loan "not
only covers the cost of buying the property, but also for remodeling expenses
and closing costs allowed by the terms of your FHA home loan," said the
FHA. "The best part of these ‘fixer upper' loans? The approved FHA loan
amount also includes a percentage of the total remodeling costs (as spelled out
in your submitted plan) set aside just in case there is extra work
needed."
11. Read the fine print
When you get your good
faith estimate from your lender, read everything. There may be some
miscellaneous fees that can be negotiated out. Click here for more information
on what to look for.
No comments:
Post a Comment