Being a first-time home buyer can be stressful. There are so many things to learn: budgeting, home-buying tips, debt, affordability, the list goes on, and is never-ending! Most of the time, you have no idea what you’re doing or how the process works. It’s not like buying a car, where you know how much things cost and what to expect when it comes to negotiating.
The good news is that buying a house is like buying anything else. You just need to understand what you’re getting into and plan accordingly. Here are some tips for first-time home buyers who want to save as much money as possible:
Start saving early
It’s easier said than done, but if you can start saving 10% of your income every month, you’ll be amazed at how fast your savings account grows. Set up automatic transfers from your paycheck into a savings account earmarked specifically for buying a home.
Boost your income
If you have any extra income, consider investing it in your retirement account or building up your emergency fund to use those funds as your down payment instead of tapping into your savings account or taking out a loan.
Get the best deals on furniture
When you buy your first home, you want to make sure that you are getting the best deal on your furniture. Shop around for sales and discounts. You can often find great deals on furniture if you shop during sales or at discount stores.
Think about what type of furniture you need. You may be able to get by with a few key pieces instead of buying a complete set. There are many budget-friendly options like Internal glazed doors as a great way to add style and sophistication to your home without spending a lot of money.
Figure out how much house you can afford
Before you start shopping around for a home, you’ll want to figure out how much house you can afford. This will help keep things realistic as well as prevent any surprises down the road when it comes time to sign on the dotted line.
Get pre-approved for a loan
This may seem like a no-brainer, but many people skip this process because they think they can just walk into their lender’s office and get approved on the spot if they have a good credit score. However, lenders want to see proof that you can afford this purchase before they make it available to you. If your loan isn’t approved ahead of time, then there’s no way they’ll approve it when you walk in at the closing time!
Talk to a mortgage lender about your down payment options
Some lenders offer assistance programs that can help make buying a home more affordable, such as reduced interest rates and no payments for some period after closing. You may also qualify for other assistance programs if you are low-income or have been on active duty in the military.
Buy adequate home insurance
Homeowners’ insurance protects your house from damage or loss due to events such as fire or theft. You should buy enough coverage to cover the cost of rebuilding your home if it were destroyed.
This will vary depending on the value of your home and the location of its construction (buildings near fault lines or in flood zones will cost more to rebuild). If you have questions about what kind of coverage you need, talk to an insurance agent specializing in home insurance policies.
Get energy-efficient appliances
A new refrigerator uses much less electricity than an older one because newer models have better insulation and more efficient compressors. New windows and doors also help keep heat inside during the winter, so you don’t have to use as much air conditioning during the summer months.
Energy-efficient appliances save money on utility bills and help protect our environment by reducing pollution from power plants that produce electricity for homes.
When looking for a new home, it’s important to consider the materials used in its construction. If you live in a warm climate, you don’t want to spend all your time cooling or heating the house — so look for homes with Energy Star appliances, windows, and doors. And if you live in an area prone to flooding or hurricanes, consider how well-built your house will be when faced with extreme weather events.
Save copies of paperwork
If you’re a first-time homebuyer, keeping copies of all the paperwork related to your purchase is important. This includes copies of your mortgage pre-approval letter, appraisal, and closing documents. This will allow you to refer back to them when you need proof that you qualify for a loan and how much house you can afford.
Conclusion
If you’re in the market for a new home, consider first-time home buyer tips like these. They will help you save money and better handle all aspects of the search and make your overall home-buying experience easier and more pleasurable.
No matter how big (or small) your budget is, you should be able to put at least some of these suggestions into action. And the sooner you start using them, the better off you’ll be in the long run!