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| Save money on your home purchase. Know what to do in advance of buying a home to save big dollars! |
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| Save money on your home purchase. Know what to do in advance of buying a home to save big dollars! |
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Saving on the Financing. What to do? First is to get PRE-APPROVED for a mortgage not just pre-qualified. Second is to do this with more than one lender. Why do this? Because being PRE-APPROVED means that the lender has verified the information that you have given them. Then once you find a home to buy your final mortgage commitment will take less time to receive. This creates many money saving opportunities for the home buyer. First it gives you a negotiating advantage. Sellers will be more likely to accept your bid when they are convinced that your financing is almost guaranteed. Second, many sellers will take less if you can close quickly. You will be able to if you are pre-approved! This will be especially important if you are negotiating with a bank on a short sale or foreclosure property. The second part. Shop around! There are many special mortgage products out there and GET PRE-APPROVED THROUGH MORE THAN ONE LENDER. This gives you a better opportunity to negotiate the terms of your loan with the lender. If one lender knows he is in competition with another lender (and you can prove it to them by showing them your other pre-approval) they are more likely to give you a better interest rate or lower fees. Always remember that these lenders know the details of your trancation and they usually want to make as much as possible on your loan. If they know that you are suppose to close in 30 days and you can´t prove that you can go to another lender and get the process done in that time frame your not going to get any concessions. You need that other pre-approval in your back pocket! This can save you lots of money over the life of the loan. One other note, try and get two or three lenders to pre-approve you all in the same two week time period. This way it will not have an adverse affect on your credit score. Oh one little secret. Most lenders will provide you with a pre-approval with no upfront cost to you! FREE! Why pay for something you might not use! We refer all our clients to lenders that provide this service for free. Saving on the Costing Costs. What to do? Closings costs in à Bank Fees à Attorney Fees à Inspection Fees So make sure you know in advance what the fees are for each of these services, get the costs in writing and shop around. It´s always a good idea to get a referral from someone you trust for each of the professionals that will provide you with these services. Don´t base your decision on which bank, attorney and inspection company you hire based on cost alone! Other items that you may be able to save money on are; à The cost of the title work à The cost of a survey à The cost of insurance Title Fees. The rates for the title work are set by law in the state of Survey. Usually your attorney will order a new survey on the property. Your lender will require a survey in most cases. But if the existing survey is less than 10 years old it may satisfy your lenders requirements saving you the cost of a new survey. You must discuss this with your real estate agent, lender and attorney to determine if this an option on the home you are buying. Homeowners Insurance. The key here is not to wait until the last minute to get your insurance. The lender is going to require that you have this coverage: Shop Around is the best advice here and know what is covered and what is not! Many insurance companies increase or decreased rates based on different factors like; à Swimming pools and trampolines on the property à Distance to nearest fire house and fire hydrate. à Age of the electrical, heating and plumbing. à Pets à Condition of sidewalks and steps. à Your own credit score and driving record. These are just some items that may factor into your insurance premiums. Again shop around and ask questions. Just an additional note on insurance. Before you go into contract to buy a home check to see if the home will "require" flood insurance. Many houses that you would not expect to require flood insurance may in fact require this insurance if you are financing the home. It is the lender that will require this coverage. This can be an added surprise expense if you don´t find out in advance. Again your real estate agent should be able to get you this information. Special Incentives As of August 2008 the federal government created an incentive for people to buy houses by offering a tax credit up to $7500 on the purchase of a home by first time home buyers. The details of this program are available at http://www.federalhousingtaxcredit.com/. As of November 2008 this incentive will expire Sellers offering to pay buyer´s closing costs. Most lenders allow a seller to pay some closing costs for the buyer at closing. Speak to you real estate agent and lender for guidance on the limits. Special first time home buyer programs offered by the State of So as you can tell there are many ways and programs that will allow a home buyers to save money on the purchase of a home once you have struck a deal with the seller. We hope this guideline will help you in controlling the costs on your home purchase. Prior to the sale a knowledgeable real estate professional is your best bet in finding a home and negotiating the best price. A Buyer´s Agent will represent your interest and help save you money before and after the sale. Please contact Robert Geist, Broker of Record, at Century 21 Sylvia Geist Agency if we can help you. We will save you money, time and stress. 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