House prices are spiraling out of control and there’s no telling when they’re going to start dropping again. There are so many people out there that are struggling to get on the property ladder because they simply can’t afford to save the money that they need for a deposit. But even if you’ve managed to get that far or you’re already on the property ladder, the cost of buying a new house is difficult to manage. It’s not just the cost of the house itself that you have to consider either, there are all of the administrative costs that come with it as well.
A new home is the most expensive thing that you’ll buy in your life and the chances are, you’re putting all of the money that you have into it. If you aren’t careful, you might find yourself in a lot of financial trouble after moving house because you can’t comfortably afford the monthly costs and your savings have been cleaned out by all of the other expenses involved in the process. That’s why you always need to find ways to reduce the cost of buying a house as much as possible. These are some of the best ways that you can do that.
Avoid Buying New
There are a lot of benefits to buying a new home. It’ll be ready to move in right away once all of the paperwork is dealt with and it’s going to be in good condition so you shouldn’t have to do any repairs. Most new developments are also built with local amenities in mind so you’ll be close to shops and good schools etc. But new build houses aren’t all they’re cracked up to be. While you would assume that they won’t need any repairs, a lot of people have been experiencing serious problems with new houses. A lack of affordable housing means that there are a lot of new properties being built at the moment. Some building companies are trying to get them up as fast as possible so they can move on to the next development, and that means that the quality of the build isn’t great. This has left a lot of people with a house that is in need of serious repair, and that’s incredibly expensive.
Even if you buy a new build that doesn’t have any issues, it’s going to cost you so much more than buying an older property. While you might need to do a bit of work on an old property, you’ll save a lot of money overall. When it comes to buying an older property, you’ve got a few options. Resale properties are great because a lot of them haven’t been lived in for that long, so they’re still in good condition. If you look at the hdb resale value of these kinds of properties, you’ll find that they’re usually a lot cheaper than a similar, new property. The difference in quality is next to nothing, but the difference in price is substantial.
You could also consider buying a foreclosure property. These are homes that have been reclaimed by the mortgage provider because the previous tenant was unable to meet their monthly payments. The lender is looking to get their investment back quickly, so they’re usually on the market for a lot less than similar properties. This is a great way to get a good house in a desirable area without having to pay over the odds for it.
Use An Experienced Real Estate Agent
A lot of buyers make the mistake of trying to save money by not using a real estate agent so they can save on fees. What they don’t realize is that it’s not the buyer that actually pays the fees, it’s the seller. The buyer’s fee is factored into the asking price of the house so it’s them that pays, not you, and not using a real estate agent can actually cost you a lot more money. One of the main things that they do for you is negotiating a good price. If you go in without a real estate agent of your own, you’ll be trying to negotiate the price on your own and you’re not going to do very well.
A good real estate agent will also be able to advise you on the best areas to buy a house so you can find something that isn’t too expensive but is also in a good neighborhood. On top of that, they can help you to negotiate other areas of the contract and possibly even reduce some of the admin costs. Without a good real estate agent, you’re going to end up paying way more than you need to for a house.
Save A Bigger Down Payment
Saving the money that you need for a deposit is so hard and it takes a long while to get there. But even if you’ve managed to save what you need to get a mortgage, it might be worth holding off for a bit longer. If you’re just putting the minimum down payment on the house, your mortgage rates aren’t going to be as good. If you’re putting down less than 20 percent, you’ll also have to pay for mortgage insurance. This is to cover the lender if you’re unable to pay your mortgage so they get their money back.
But if you can save at least 20 percent, and maybe even more, you won’t have to deal with the added cost of the mortgage insurance. It also means that you’ll be borrowing less so your mortgage rates are likely to be better and your monthly repayments won’t be as much. If you’ve got a massive mortgage, you could be paying for the rest of your life and it makes it a lot harder to manage your finances. Sometimes, it’s best to hold off for a year or two so you can pay a bigger down payment on the house.
Shop Around For Mortgages
Every lender is going to offer a different interest rate and they’ll also charge different amounts for the extra admin fees that you’ll have to pay, so going with the first lender that will give you a mortgage is never a good idea. You might end up stuck with a mortgage that is way more expensive than it would have been if you went elsewhere. Instead, you should shop around at least 3 or 4 different lenders and ask for a loan estimate. This will give you an idea of the interest rates and all of the other fees. Not only does this allow you to find the cheapest deal, but you can also use these estimates as a bargaining tool. If you get offered a lower price, you can return to other lenders and see if they’ll match or even beat it. Doing this a few times can really help you to push the price down and get the best deal on your mortgage.
Improve Your Credit Score
When you’re going to lenders, the first thing they’ll do is look at your credit score. If you have bad credit, the interest rates that you’re offered will be very high. Before you start looking at mortgages, you should check your credit score and see if it’s good or not. If it isn’t, you need to take steps to repair it before you go to lenders. That means paying off any debts that you’ve got and then making sure that you’re meeting all of your payments on time. If you can boost your credit score, you’ll get a much better rate on your mortgage.
If you do all of these things before you buy a house, you’ll be able to save yourself a lot of money.
