Buying a home is the biggest investment one can make. When it comes to saving money, it is best to cut corners on unnecessary spending, as opposed to sacrificing some of your needs and desires in a new home. Following these 5 steps can help you cut costs in ways that you may not have thought of.
1) Get a Shorter-Term Mortgage
By getting a 15 year mortgage as opposed to a 30 year, you can expect to have a higher monthly payment and a lower interest rate. You would be surprised at just how much you can save by simply paying a bit more up front on your down payment and by applying for a 15 year mortgage.
2) Get Rid of Your Private Mortgage Insurance (PMI)
The first way to get rid of your PMI is to put 20 percent down when you buy a house. If you couldn’t or can’t, don’t worry, you still have a shot at losing the insurance. According to the Federal Reserve, when you make enough payments to gain 20 percent equity in your home (based on the original purchase price), you can send a written request to your lender to cancel the PMI.
3) Shop for the Best Home Insurance Rate
Never take the first offer that comes around. Getting approved for your first mortgage is exciting, however, it is best to shop around from national and private lenders to understand the rate that is best for you.
If you are buying used, sometimes it is best to leave projects to the professionals. One can end up spending double on a kitchen project they started themselves by making novice mistakes that a contractor could have easily avoided. A great way to avoid this is to buy new.
Buying a new home not only ensures that the home will be built to your specific needs; it also ensures that anything wrong with your home will be fixed, as most builders offer warranties on their products.
5) Consider Bundling Your Internet, Cable, and Phone
Nothing is more satisfying than watching the big game in your new living room. It is best to shop around for different cable and internet providers for the best package deal. In most cases, companies offer loyalty and referral programs that can save you money as you build credit.