Because purchasing a home is likely going to be one of the biggest financial decisions of your life, it’s important that you take the time to ensure that you do it right. As part of this, many people try to pull out all the stops that will keep them from wasting their money on something they don’t need or from spending more money than they need to on an aspect of the home buying process. If this is something that you’re concerned about and you’re determined to get the most for your money, here are three tips to help you save money when purchasing a home.
Shop Around For A Mortgage
One of the first and most important ways that you can save yourself a lot of money when buying a home is to shop around for a mortgage. According to Trent Hamm, a contributor to The Simple Dollar, you should go to at least a handful of banks or credit unions to see what type of interest rates they can give you on a mortgage loan and determine how their fees stack up against the competition. Even if one that you find is just slightly better than another’s, that slight difference could end up saving you thousands of dollars over the life of your loan. So while it might not seem like much now, it will in the future—and future you will likely be grateful for the savings.
Don’t Pay PMI
With the proper planning and preparation for your down payment, you can save yourself a lot of money in the long run. As part of this, Steve Gillman, a contributor to The Penny Hoarder, recommends doing whatever you can to avoid having to pay PMI. PMI, or private mortgage insurance, is an additional fee on your mortgage that you have to pay if your down payment was less than 20 percent. To keep from having to pay this PMI, try to do everything in your power to either get a 20 percent down payment ready when you’re seeking a mortgage loan or search for a lender that offers 80/10/10 programs, which allow you to split your mortgage into a secondary loan to help keep you from having to pay PMI.
Find Out About Options For Financial Assistance
Another way you can try to save yourself money on your home purchase is to research ways that you can qualify for financial assistance on your mortgage. According to Emily Starbuck Crone, a contributor to NerdWallet, there are likely federal, state, and even local programs that you might be able to take advantage of for financial assistance. The areas for assistance vary from help with closing costs, assistance with coming up with a down payment, and even discounted interest rates.
If you’ll soon be buying a home, consider using the tips mentioned above to help you find ways to save yourself some money.