Most first time home buyers assume acquiring a home is easy, but it’s not. Between choosing the ‘perfect’ neighborhood and figuring out the furniture, you also need a lot of money. And if you are like most people, saving is always a welcome idea. This post shares some of the best ways to save money on your home purchase.
1. Save up the deposit
The easiest way to save money on a house purchase is to have the money upfront. Open a savings account and deposit at least 10 – 15% of your household income. These savings will eventually grow into a tidy amount that can pass for a house deposit. Ideally, save up to 20 percent of the current market price of your dream home, plus a little more. This extra amount should pay for the things your mortgage won’t cover, such as the solicitor fees for buying a house.
2. Shop around for favourable mortgage rates
When it comes to a mortgage, you have more options than you need. So don’t settle for the first offer you get.
Generally speaking, the longer you take to pay the loan, the higher the interest rates. The ideal situation would be a short repayment time coupled with a favourable interest rate. However, finding this combo will take a substantial amount of time and effort.
3. Avoid established areas
The idea of living in a hot neighbourhood is appealing, but it can hurt your finances pretty badly. For example, the average price of a property in London is £650,000. Factor in the mortgage set-up fee, booking fee, and solicitor fees for buying a house, and you’ll notice a massive spike in miscellaneous costs. The idea is to find a property that is near an up-and-coming area. You get to ride the appreciation rate and enjoy a lower solicitor fee for buying a house.
4. Inspect the house
Buying a house is probably the most significant investment you’ll ever make, and you need to get it right the first time. The last thing you want is to replace expensive appliances during the ‘honeymoon.’ So, have the property inspected and also be on site when it happens. Question everything you think is out of the norm to avoid nasty surprises after the purchase.