4 Money Saving Ideas for the First-Time Home Buyer and Owner
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Buying your first home is a major accomplishment in life, but it can also provide you with considerable financial security and the chance to accrue wealth over time. However, you need to know certain things before buying a home, ways to save money during both the buying and ownership process, and the importance of revisiting your budget when it's all said and done.
What You Should Know Before Buying a Home
Manage your expectations and emotions. Preparing financially for a home takes a lot of sacrifice and work. Shopping for a home can seem endless, and buying one is another lengthy and involved process. Once you own your first home, you'll be responsible for its maintenance, upkeep, and condition.
Take advantage of your first-time buyer status. There are mortgage options, loan possibilities, and programs for those looking to get their first home. These can make it easier to realize your ambitions without overspending on the mortgage.
When you start looking for homes, look for one that could be your dream home rather than one that already is. Affordability and location are two things you can't negotiate. However, once you own a property, you can do home renovations that turn it into the kind of place you need or want to live.
Always get a home inspection done on a property you want to buy. Ensure that the inspector answers only to you, and never take a seller's inspection report as the full story. If your inspector finds serious defects that weren't disclosed, you might want to back out of the deal or negotiate for the seller to fix things before closing.
4 Money-Saving Ideas for First-Time Buyers
Boost your credit score as much as you can. The higher it is, the less expensive your mortgage will be since you'll probably get better rates. Check your credit report line by line to find inaccurate entries or fraudulent reporting that you can dispute and remove, and focus on paying your bills on time.
Save up the biggest down payment you can. First-time homeowners might qualify for reduced down payments through certain options and programs, but you'll still need to put money down. The more you can do at the start, the less your mortgage has to cover in the future years and decades.
Shop around for a great mortgage rate. Just a fraction of one point will compound in thousands of dollars of savings over the life of a home loan. Do as much comparison shopping as you can in advance, not just among lenders but also between the options specific lenders have to offer.
Compare the mortgage fees. The mortgage rate is the biggest factor to consider, but it's not the only determining factor. Inquire about every fee involved and see if a list is available to review for potential details. The mortgage insurance fees between private and FHA loans can be highly variable.
4 Money-Saving Ideas for First-Time Owners
Before homeownership, you might not have paid for your water usage in some rental situations. However, minimizing this can add up once you own a home. Low-flow toilets, faucets, and showerheads can significantly reduce your home's water consumption annually and prevent thousands of gallons of water from going to waste.
Schedule HVAC filter changes regularly. Depending on your family and living circumstances, that can be monthly or quarterly. Many homes use approximately half their energy just for HVAC alone, and dirty air filters provide resistance to airflow in ways that make climate control systems work harder than necessary.
You'll probably have a long list of improvements you want to make to your new home while finding new ideas to implement later. DIY projects save money, but you need tools. Borrow them whenever possible instead of buying them, and many home improvement stores offer temporary rentals.
Your landscaping can also be a source of savings. Shade trees can lower summer cooling costs, and perennials can bring color for many years instead of repeatedly planting annuals. Use your sprinklers when the weather is cooler so you don't lose water to hot afternoon evaporation, or use xeriscaping to minimize water use and lawn care.
Once You're Settled In
Once you get settled into your new home, revisit your budget. Even if you already have a budget that covers everything, you should look for potential savings and surprises. First-time homeowners who recently stopped renting can be caught off-guard by the costs of home maintenance and HOA fees.
Written by Taylor McKnight, Author for Artifact Homes