Cover of Buying a Home (Essential Finance)

Saving Money When Buying a House

While buying a house can seem overwhelming and expensive, with a variety of fees and actions required, there are also a variety of ways to save money on your purchase.

Here Movoto Real Estate, an online company with full homeowner and property search services, brings you six tips on how to keep some extra dough in your pocket when buying a home.

1. Learn How to Negotiate
The most obvious is negotiating the best price for a property--and knowing the market, the buyer’s situation, and the property can put you in a much better position to negotiate.

Poor negotiating on the purchase of a home can leave you with less money than you need and a higher payment. This includes negotiating the sale price with the seller, and the fees and loan terms with a lender. If you overpay for a house, you might have to live with the mistake for many years to come. You might never know how much less you could have paid if you fail to negotiate.

2. Hire a Real Estate Professional
Enlisting a realtor who is knowledgeable about your market can also help you save money. Realtors provide you with expert information regarding the value of the property. They know the fair market value of a property you are considering in their area. They can also gather data from the most recent sales of similar properties and make comparisons.

3. Don’t Underestimate Your Costs
Many buyers underestimate the cost of property repairs or improvements they plan to do after buying. They often focus so much on getting a great deal on the purchase price that they overlook getting accurate estimates for the future work. This could mean ending up with a seemingly bottomless expense to repair the property.

One way to avoid this is to make sure you have the property inspected. Failing to have a property professionally inspected and making an inspection a contingency in the offer can be costly mistakes.

4. Know Your Mortgage
Learning about mortgages and knowing what you can afford is another beneficial approach to saving money. How much you can spend on a mortgage depends on several factors such as your monthly income and expenses, the interest rate, the type of mortgage, your down payment, and the total debt. A lower interest rate can help you qualify for a larger loan and save you money.

Shop your proposal around to different lenders and compare the cost of points and fees. Also shop other types of insurance such as a homeowner’s policy and get several quotes. Knowledge is money in the house buying game, and the more you know the better opportunity you have to understand what the best deals are and how to get them.

5. Understand Required Insurance
Learning about mortgage insurance and what is required can also help you save when buying a house. As a borrower you are generally required to pay mortgage insurance if you are making less than a 20-percent down payment. If you can afford to make a 20 percent or more down payment, do so and save this expense right from the start.

6. Consider Seeking Legal Advice
Understanding the real estate contracts used in your transactions can also help you avoid losses from later litigation. Hiring a lawyer to review all the documents might seem like an unnecessary expense, but can actually be an economical insurance policy. Your contract should allow for a lawyer review.