Interested in buying a home and making financial decisions to reach that goal? Working with a mortgage lender is essential to reaching your home ownership goals. Here’s some advice for how you can save money when you’re working with a professional to secure a mortgage for your home.
Ask a Mortgage Lender: 6 Ways to Save Money Buying a Home
1. Build a Positive Credit History
Your credit score is one of the most important factors in determining how favorable the terms you can get for your mortgage will be. Building a positive record on your credit history prior to seeking a mortgage will help you get a more favorable deal. Make sure that you’re making payments towards any outstanding financial obligations you have to show that you’re a trustworthy person to lend to.
2. Put More Money Down
Along with the regular payments, you’ll put toward your mortgage after you purchase a home, there’s also the down payment to consider. Because this tends to be a considerable sum, some prospective homeowners are tempted to put a minimal down payment towards their home. However, you’ll save money over time by making a higher down payment. Try to save up ahead of time so you can put a more significant amount down towards your purchase.
3. Go for a Shorter-Term Mortgage
One of the things you’ll have to decide when getting a mortgage is how long you want the terms of your mortgage to be. Going for a longer-term mortgage brings down your monthly payments, making this an attractive option at face value. However, if you want to save money on the whole, you should go for a shorter mortgage. The shorter terms of your loan will give less time for interest to accumulate.
4. Set Up Bi-Weekly Payments Plan
While many choose monthly payment plans, making more frequent payments towards your mortgage can help you pay less in the long run. By paying down the principal amount of your mortgage more quickly, you’ll leave less time for interest to accumulate. This decreases the total amount you end up paying by the time your mortgage is completely paid off.
5. Make Additional Payments
Whether or not you decide to set up a bi-weekly plan for your mortgage payments, making additional payments toward your mortgage will save you money in the long run. The more quickly you’re able to pay off the outstanding balance on your mortgage, the less you’ll pay over time. Work with a mortgage lender to develop a plan for paying off your mortgage that works for you and your budget.
6. Consistently Reevaluate Your Budget
While budgeting carefully and reviewing that budget on a regular basis is good advice for anyone, it’s especially important to those considering a mortgage. You should constantly reassess your financial situation. If you are able to allocate more funds towards paying off your mortgage, that will help you save more by the time you’ve fully paid it off.
Follow this advice and you’ll be well on your way toward saving money on your mortgage. An experienced lender can give you even more pointers and help you get the best value possible on your new home.