There are plenty of ways for first-time home shoppers to lock in a great deal on the starter home of their dreams. They may not know about them due to the fact that they’re relatively inexperienced when it comes to shopping for a property or not very knowledgeable of current conditions in the housing market. Working with an experienced real estate professional can help quite a bit in this regard, but it’s also important for potential home buyers to do as much research as possible on how to effectively cut costs.
One of the biggest issues in the current housing market – which has a huge impact on affordability over the life of a mortgage – is the rate homeowners pay on their home loans, according to U.S. News & World Report. Rates are currently hovering in the low 4 percent range, and even though that’s considered high in comparison with some of the levels seen in the past few years, it’s still extremely low on a historical basis.
Talking with an agent or a loan officer about what constitutes an affordable rate in the current market, and what that means for ongoing costs over the decades it takes to pay off the loan, gives first-time buyers a good starting point for finding an affordable mortgage.
Other Costs to Examine
The price of the home and the mortgage rate aren’t the only cost considerations new buyers face. In addition to maintenance and upgrades and property taxes, homeowner’s insurance will also be an ongoing cost of actually owning the home. Insurance costs can vary considerably depending upon the features of the property and any geographical or climactic risk factors. As with a mortgage rate and associated costs, the smart move for any homebuyer is to shop around and find the best deal possible, ultimately saving hundreds of dollars per year in a lot of cases.
More Ways To Save Money
In some cases, it may be difficult to avoid certain issues that will impact the price of a home loan. One of the best ways to save (what could be thousands of dollars) is to research, study and properly prepare before entering the market, according to the Columbus Dispatch. That means putting as much money as possible toward a down payment, as well as working to improve credit standings before applying for a mortgage, both of which reduce ongoing expenses significantly.
Other ways prospective homeowners can save money when buying a home is by using a home warranty to help provide a little more financial certainty. These products can help cover repair or replacement costs for appliances and home systems after a sale, potentially saving the home buyer thousands of dollars in expenses in some situations.
It is important to know the difference between homeowners’ insurance and a home warranty, and the value both provide. Put simply: home insurance will typically cover structural problems such as repairs for roof or fire damage, while home warranties protect things like HVAC or plumbing systems and major appliances, and can connect homeowners with experienced professionals who will help them get back to full function as soon as possible.
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