Let’s get one thing clear at the outset: Buying a new home isn’t going to be cheap.
Well, not unless you manage to find a property that has drastically come down in price, perhaps because of issues with the neighborhood or the state of the house itself.
More often than not, price houses can be very high, and we can find ourselves out of pocket for a time after making a purchase.
However, there are ways to reduce the cost of buying a new home, as you can see in our suggestions below.
Table of Contents
#1: Work on your credit score
According to this article at Kiplinger, a credit score of 740 or above will help you achieve more favorable interest rates when shopping around for a mortgage. So, check your credit score with Experian or Equifax, and if it’s not as good as it should be, do what you need to do before applying for a mortgage. ClearScore detail some of the steps you might want to take, so take a look at their suggestions. Reducing your mortgage interest could lead to considerable savings over the duration of the mortgage term, so it’s worth spending time on your credit score sooner rather than later.
#2: Check on your entitlements
You might qualify for help with your down payments and the overall cost of your mortgage, so check on anything you might be entitled to.
The U.S. Department of Housing and Urban Development (HUD) offers help to certain homebuyers, with a range of home buying programs, so it’s worth getting in touch with them. And if you’re a veteran, you might want to consider a VA loan program when looking to secure competitive interest rates and a waived down payment. Check out the information at Hero Loan to find out more.
#3: Consider crowdsourcing
If you want help making that down payment, this is an effective way to raise the money you need. We appreciate you might find it difficult asking for help from others, but it might be that friends and family are only too happy to get you on the property ladder. Visit Feather The Nest to get started, and then share your funding page on social media.
#4: Seek help from an Agent
Buying your first home can be a bit of a minefield, so it is worth speaking to a housing counselor. They will give you independent advice on mortgages and will advise you on the best loan to go for based on your financial circumstances. The HUD list the counseling agencies they have personally approved, so head over to their website.
#5: Know what you can afford
There will be some houses that are out of your price range, so rule them out of your search. Work with a real estate agent, and ask them to show you the properties that you can more easily afford. And check what you can afford using an online mortgage calculator, as you will then get an idea of the price ranges you should be looking for during your house search.
Buying your first home isn’t going to be cheap, but by following one or all of our suggestions, you can reduce the expense. You will then have more opportunity to save up for the items your new home needs, and have more to put into your savings and emergency funds.