As a home buyer, you have a strict budget that you’re hopefully going to stick to no matter what. However, just because you don’t go over budget when buying a home doesn’t mean that you may not be wasting money. The following are a few tips to keep in mind to ensure that you don’t lose money when buying a home:
- Check the deposit terms – To buy a home, you’ll need to provide earnest money. Find out if the deposit is refundable in case something goes wrong with the sale, such as if there are certain circumstances in which it’s not refundable and if there’s a time limit.
- Pay a 20 percent deposit – By paying for at least 20 percent of the home’s cost as a deposit, you’ll ensure that you won’t have to pay for additional private mortgage insurance. If your deposit is below 20 percent, you’ll have to pay private mortgage insurance until you’ve paid off at least 20 percent of the house.
- Negotiate home inspections and appraisals – You’re going to have to get a home inspection and an appraisal in order to secure a loan. If the seller doesn’t include these in the sale, try to negotiate their inclusion. If they won’t budge, don’t agree to an inspection until the seller approves your purchase contract. Don’t do an appraisal until you receive a mortgage pre-approval. Otherwise, you could end up wasting your money.
- Get a home warranty – If you’re buying an older home, things are more likely to go wrong after the inspection, resulting in costly repairs. A home warranty will cover the major systems in your new home.
Follow these tips to avoid wasting money when buying a new home. For more advice on buying real estate, be sure to contact us at Randy Lindsay today.