First Time Home Buyer Discount Tips
Save 20% For the Down Payment
So as to prevent yourself from paying mortgage insurance for a longer time, it would be better to have 20% down payment. Private Mortgage Insurance insures the mortgage loan only. If a borrower fails to pay the loan, the lender is compensated for the lost funds.
Acquire Loan Quotes From Several Lenders
Since interest rates may be different with each and every lender, it’s advised to acquire loan quotes from a minimum of 3 or 4 different mortgage companies. Also, lenders charge a few other fees such as loan origination fee, mortgage processing fees, loan application fee and several more. Apart from using the different loan quotes to assist you negotiate lower rates and fees, loan quotes can also give you an opportunity to speak with various loan officers so as to identify the one you can be comfortable with.
- Improve Your Credit Score
Cheaper loans are offered to people with high credit scores. Interest rates and lender fees are directly connected to your credit rating. There’re a few ways you could quickly increase your credit score prior to applying your mortgage loan. First, you’ll need to pay down the balances in your credit card. Your credit utilization ratio is identified as your credit cards’ balance compared to the credit limit. It’s recommended to make sure that your balances are kept below 15% of your credit limits so as to increase your credit score.
Another way is to not register for new loans or credit. Hard inquiries and new accounts constitute 10% of your credit score. Opening a new account makes your credit score to drop for a few months. In case you’re planning to apply for a mortgage soon, it would be better to avoid buying a new vehicle or credit card.
- Apply the Correct Type of Mortgage Loan
Based on the situation you are, some loans are preferable than others. In case you’re not purchasing a home within the major metropolitan area, you might qualify for home loans that assist low-to-median income buyers to be homeowners in the country’s rural parts. Apart from these type of loans not needing a down payment, mortgage insurance on such type of loans are relatively lower as compared to other types of loans. This can help you save lots of money every year.
- Get a House that Requires Some Extra Work
Most of the time, buyers search for the most incredible homes of their dreams that don’t require any more work. Homes that have a lot of custom features and upgrades tend to be more expensive than a home that requires some love. Adding lighting and other custom fixtures is a simple job. Putting on your own personal touch and painting the walls can be gratifying while saving you money.
It’s important and better to try the above few methods to save your money before buying your new home.