Buying a home is expensive, especially if you’re a first-time buyer. Here are a few ways you can cut the costs though!
Be Realistic When Planning
Being realistic is the only way to make sure you don’t get disappointed when buying your first home. You’re not going to be able to find your dream home in the right location and within your budget. So, be realistic and think about where you’re willing to make sacrifices because this will save you money.
You should also be realistic when it comes to planning your budget. If you set your budget too high, you could find yourself in financial trouble when you’re struggling to pay the mortgage repayments. This is a sure-fire way to get into a spiral of debt and borrowing. This is something you should avoid at all costs.
Consider Whether Renting or Buying is Cheaper
Buying a home is the holy grail, it’s what we all aspire too. But that doesn’t mean that it’s the most sensible option open to you. It might make a lot more sense to rent for the time being and save up money so you can afford to buy a better home in the future. It all depends on the local market where you’re looking to buy.
In some places, there’s no value in renting. It doesn’t make sense to rent if it will sap your entire income and leave you nothing left to save for a home of your own. But if the rental market in your area is good for tenant and rents are relatively low, it could make sense to wait before buying.
Use a Lender with Low Down Payments
The biggest expense involved in buying a home is the down payment. This is the percentage of the overall price of the house that you must pay before securing a mortgage from a lender. The percentage is usually about 10-20%, but it will depend on which lender you use so do your research first.
If your budget is really tight, you should think about using FHA lenders. They are backed by the federal housing administration and will be able to offer better deals. Their mortgages have lower down payments and are much easier to qualify for.
Don’t Blow Your Budget on the Small Stuff
There are lots of small details that need to be seen to and paid for when buying a home. If you haven’t ever bought a home before, you might not be aware of these things. But it’s important that you factor them into your budget and don’t get overcharged for them. The key is being vigilant and doing your research.
For example, you’ll need to hire a lawyer to look after the conveyancing. This is the process of changing the ownership of the house from one person to another. Most estate agents will offer you a lawyer to oversee the process, but you’ll have to pay. So, don’t just take the one they offer you, see if you can find a better deal elsewhere.
If you’re clever and use your brain, there are ways to cut the costs of buying your first home. It’s all about searching the market and finding the best deals.