Loveland – Buying a home is a major financial investment. As you save up for your down payment and closing costs, it may be helpful to find other ways to save money in the process. After all, you’ll probably want to set aside some money to furnish and decorate your new home. Here are five ways to save money when buying a home in Colorado.
Look for motivated sellers
It’s primarily a seller’s market right now, which doesn’t give home buyers a whole lot of leverage. However, there are always a certain number of motivated sellers whose homes aren’t moving as quickly as they would like.
Why aren’t their homes selling quickly? It could be that the home was originally overpriced, the photos don’t do it justice, it has unusual features, or it is simply not marketed properly. These sellers will be more willing to negotiate with you than others.
Sweeten your offer
There is more to an offer than just price. Discuss specific properties with your agent to identify whether certain offer features would be particularly desirable to a seller. For instance, a seller may be willing to accept a slightly lower offer if a buyer can close quickly or waive certain contingencies. Identifying these opportunities can enable you to sweeten your offer and possibly save money on the purchase price.
Shop for mortgages
Not all mortgage companies are the same, even if they offer the same mortgage programs. Lenders often set their own prices when it comes to certain fees (underwriting, loan processing, credit reports, etc.). It is important to shop around and compare not only interest rates but also closing costs from each lender. This allows you to identify which offers the best overall package and savings.
Avoid Private Mortgage Insurance
Private Mortgage Insurance (PMI) is typically charged on loans with down payments of less than 20%. If you are close to that threshold, it may be worthwhile to put in a little extra money to avoid those ongoing fees. Some mortgage programs charge PMI both up-front and monthly, so eliminating PMI can save thousands.
There are also some loans that do not require PMI or a 20% down payment. These are worth considering. The annual interest rate is slightly higher than loans with PMI, but you may find that it still saves you money each month.
Select your closing date carefully
The closing date can be important. There are two things to consider. The first is how far ahead your closing is scheduled and the second is the specific day of the month on which it is scheduled. Lenders typically have rate lock periods. A 30-day rate lock often has a better interest rate than a 60-day rate lock. This is worth looking in to before you make an offer on a property. As for closing date, closing near the end of the month is often less expensive than closing at the beginning of the month. This is because lenders calculate the interest for the remainder of that given month, which must be paid at closing.
More on saving money on your home purchase
These are just a few ways that you may be able to save money when buying your next home. There may be other ways to save, depending on your personal circumstances and your target market. Your real estate agent can provide helpful information and tips.