3 Ways to Save When Buying Your First Home [VIDEO]
Buying your first home can be a really exciting time in your life, but it can also be a little stressful, too. From working with mortgage lenders to negotiating purchase prices, watch as personal finance author Stefanie O’Connell shares three money-saving tips that may help you make the most of your home purchase.
STEFANIE: Hi everyone, personal finance author, Stefanie O’Connell from stefanieoconnell.com here, sharing three money-saving tips when buying your first home.
STEFANIE: Purchasing a home is a huge step in anyone’s financial life, but it doesn’t have to be a budget buster. Here are three practical ways to help you save money when you buy your first home.
STEFANIE: First, make sure to get multiple mortgage quotes. One of the biggest mistakes that first-time homebuyers make is taking the first mortgage quote they get instead of shopping around for a better deal. Here are some tips to keep in mind:
STEFANIE: Don’t underestimate rate savings. Even half a percentage point could save you tens of thousands of dollars.
STEFANIE: If you are shopping around for a better quote, check multiple sources like banks, mortgage brokers and online mortgage lenders.
STEFANIE: Be prepared to negotiate on rates, closing costs and processing fees. Simply getting your application fee waived could you save you $500.
STEFANIE: Second, focus on houses that are structurally sound but will likely need a makeover. Look for factors like old carpets, dated kitchens and unkempt landscaping. These can all equal dollars saved for you. Why? Because new carpets might only cost you $5,000 but buying a house with brand new flooring could cost you $15,000, or more, says Realtor.com.
STEFANIE: Newly remodeled and updated houses have curb appeal, which means they’ll sell faster and sellers will be less likely to negotiate on price. This means that houses with less curb appeal could offer great savings to you, especially if you are willing to put in some sweat equity and fix it up yourself.
STEFANIE: Don’t forget to always check how long a house has been on the market. You’ll be able to negotiate more aggressively on a house that has sat on the market longer. Remember, it’s OK to make a low offer. Worst case scenario, it gets declined. Best case scenario, you get an amazing deal.
STEFANIE: Finally, make sure to show up to your home inspection. Don’t be afraid to ask lots of questions and take notes — that’s what you are paying the inspector for. An inspector can help you identify any issues that may cost you later on down the line — from an aging furnace to wiring that isn’t up to code.
STEFANIE: You can use the inspection report to determine the cost of necessary repairs and then use those estimates to negotiate a lower price with the seller. Offering to handle these repairs yourself if the seller lowers the price accordingly can help you get the best deal.
STEFANIE: For more tips on buying your first home, visit allstate.com/blog and follow me @stefanieoconnell.