by guest blogger Natalie Jones from http://Homeownerbliss.info
Home buying is complicated, from finding the right property to closing, and it’s enough to give anyone a headache without even thinking of the expenses. But in between all those difficult steps in the process, you’ll find little opportunities to save money, negotiate better terms, and lower your mortgage payments, and that makes things look a little brighter.
Here are some ways to give yourself the advantage.
Check Out a HUD Home
HUD homes are a bit complicated. It starts with a buyer purchasing a home with a loan via the Federal Housing Administration. If the buyer can’t pay their mortgage, the property goes into foreclosure and ends up with the US Department of Housing and Urban Development. The government isn’t in the real estate business, so they want to get rid of it. That means you get a great deal with a low down payment, while HUD pays up to 5 percent of closing costs.
Talk to Multiple Lenders
And don’t be afraid to pit them off against each other. As one expert writing for personal finance website GOBankingRates explains, “You can compare estimates from multiple lenders, and even negotiate the details. You have 10 business days to pick an estimate and let the winning lender know you’ve selected them.” With them competing, you’re sure to walk away with more attractive financing for your new home.
Make a Large Down Payment
A number of financing options with a low down payment — or none at all — have crept into the real estate market in recent years, but don’t be tempted. There are many good reasons to go large. For one thing, you’ll have less to pay in monthly mortgage, which is the main thing. Also, by plunking down 20 percent or more initially, you can avoid costly private mortgage insurance premiums while enjoying the upper hand if there are multiple bids for the house.
House-Hunt in the Winter
Late spring and early summer are when most people put their houses on the market, mostly so their children can stay in the same school until the end of the academic year. However, the colder months are when you’ll get the best deal. The inventory may be lower, but so is the competition, according to the experts at the Spruce, and the sellers will be more eager to let go of their palace at a lower price.
Negotiate Closing Costs
It may seem strange for a buyer to ask a seller to pay closing costs, which usually amount to around 3 percent of the price of the house, but it happens. This is often the case when the home is being purchased with an FHA or a Veterans Affairs loan, which require a low down payment and no down payment at all, respectively. In these cases, the buyers are usually relatively low in cash, thus necessitating a little help to seal the deal. It’s worth negotiating in any case, as you may be able to save some money with the right tactics.
Raise Your FICO Score
This will help you secure a mortgage more easily and with better terms. Your FICO score is generated by the Fair Isaac Corporation based on how well you’ve managed to pay off previous loans. The only real way to raise your score is to pay off whatever debt you carry now, including student loans, and that means knuckling down and cutting your other expenses so you can get rid of those obligations before you begin looking for a home in earnest.
You may have noticed that there’s no easy fix, but with a little effort, you can carry through and get closer to your dream of home-ownership on good terms and without breaking the bank. The chase may have been so exciting that you want to pursue a career in the world of real estate.
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