Between down payments and closing costs, many would-be homeowners become frustrated with the process and put off their dreams of buying a home. But homeownership can be more affordable than you think. If you’re looking for ways to save on your home purchase, you may want to:
Explore other property options
When it comes to buying a home, a traditional listing may not always be your best bet if you’re looking to save some dough. Ask your real estate about potential foreclosures and short sales in your area, or look online if you’re tackling the home buying process on your own. These bank-owned homes cost significantly less than comparable properties, but just be prepared, because it can be a lengthy and complex process. But if you’re up for the challenge and you’re flexible with your closing date, purchasing a foreclosure or short sale can save you a lot of money on your home purchase.
See the potential in a fixer-upper
The neighborhood’s ugliest house is for sale and you laugh to yourself, wondering who would actually want to live in a place that looks like it’s ready for Halloween year-round. But don’t just see it for what it is: see past that, and picture what you can turn it into. Fixer-upper homes are usually priced accordingly, which can mean getting into a home that you may not have been able to afford otherwise. Sure, it may need some (or a lot) of TLC, but if you’ll still make out ahead in the end, it can be a project worth taking on. And as an added bonus, you can customize the home to your liking.
Lower your housing budget
This may seem like an obvious one, but it’s an important one worth pointing out. A lot of people will pull up a mortgage calculator and base their home purchase budget on what kind of monthly payment is affordable. Then they realize most mortgages require at least 10 percent down, and then there’s closing costs on top of that. Frustrated, some will just give up on buying a home completely. But if you have your heart set on a $200,000 home, yet only can afford a $10,000 down payment, why not explore what $100,000 can get you? Although you won’t want to make too many sacrifices—after all, a home purchase is a big one and you want to be happy in the end—if you can lower your budget and find something that meets your needs just fine, homeownership can become a realistic possibility much sooner than you imagined.
Compare property taxes
A good chunk of your monthly mortgage payment will usually go towards property taxes. Depending on where you’re looking, this can make or break your decision to buy a home, and can mean the difference of affording the type of home you want. By simply looking into neighborhoods that are just a few minutes away, it could mean different counties and possibly lower property taxes.
Another way to save money on those housing expenses is to avoid buying property that’s part of a Homeowners Association, or HOA. Being part of an HOA can certainly offer its perks; a lot of stuff could be taken care of for you, such as landscaping, but you’ll pay extra for this convenience. Depending on what the HOA will include, this might just be a couple hundred extra each year, or it can be a few hundred every month. If you’re looking to save as much as possible, scratch HOA homes offer your list completely.
Do you want to buy a home, but need the money for your down payment and closing costs? J.G. Wentworth may be able to help if you’re receiving structured settlement payments. Contact J.G. Wentworth today to learn more about selling some or all of your future payments for a lump sum of cash.
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