Saving money to buy a house in West Michigan can be very difficult. Getting a loan can be a complicated process as can knowing how much money to save, and figuring out whether your credit score is high enough to get the financing you need. But there are some tips and tricks that can make saving for a home a whole lot easier.
1. Hire a Local Real Estate Agent
If you’re unsure about the real estate market in your area, no one will know better than a local real estate agent. They aren’t just able to find you a house that fits what you need, they also know the area and can help with everything from the loan process to the paperwork for closing on a house and everything in between.
They can also help you get the best price possible on the house of your dreams. This ensures you get a price that’s within your budget. You may even end up saving money that you would have spent if they hadn’t negotiated a lower price.
2. Get Loan Quotes From Multiple Lenders
When it comes to looking for financing and a mortgage, most experts recommend getting three or more rate quotes from different lenders. It’s been shown that the more quotes you get, the likelier you are to save money. And remember, there’s more than one type of home loan to apply for!
Additionally, the more quotes you get, the more you’ll understand the average rate, and then you can decide which is best for you.
And this won’t be as much work as you think. Most lenders have a similar application process so once you have all the information and documents collected, it will be fast and easy to fill out multiple forms.
3. Save 20% For The Down Payment
When you’re looking for a house and saving for a down payment, figure out how much you’re willing to spend on a house and then calculate what 20% of that price is. Whatever it comes out to, that’s how much you’ll want to save for a down payment.
If the houses you’re looking at range around $375,000, you’ll want to save $75,000 for the down payment.
But saving can be easier said than done. You’ll want to first open a savings account and then look at what you (and your partner) bring home each month. Look for places where you can save. Is there a luxury you can give up that will end up saving you some money? If so, take that money and put it away in your savings account.
Budgeting apps or software can help with this. They can help you see exactly where your money is going, and identify a few key areas to save that won’t make it feel like you’re penny-pinching.
4. Increase Your Credit Score
When applying for a mortgage, one of the first things lenders look at is your credit score. If yours is average or low, there are a few ways you can increase it.
The first is to get rid of some, if not all, of your debt. Chip away as much as you can before applying for a mortgage. If it’s a lot, try adding it all up and then budget for a way to at least make a dent in it.
If there are any inaccurate things affecting your credit score, you can also have those removed.
One of the best ways to improve your credit score is to pay your bills on time. Payment history is the thing that affects your credit score the most, so managing your bills and avoiding late payments should be your focus.
If you have a lot of debt from different places, you can also get a debt consolidation loan from your bank or credit union. That way, you only have one bill to pay instead of multiple. And if you get a low interest rate on that loan, you’ll likely be able to pay it back even faster.
5. Buy A Fixer-Upper
Sometimes, the best way to save for a house is to choose one that’s less expensive and usually, the least expensive homes are fixer-uppers. If you like to renovate or you’re looking to make a place your own, a fixer-upper could be the perfect thing for you.
And once you fix up the house, it will be worth more than you paid for it. When it comes time to sell, you’ll likely get way much more than what you paid for it.
6. Buy In The Winter
While moving in during the winter in West Michigan may be a nightmare, buying during that time can actually save you money. Winter is usually when homes are the cheapest. Most people assume no one is going to be buying during this time. You can use this to your advantage.
You may be able to get a particularly low price if the seller is motivated to sell as soon as possible.\
For many, buying a home is a huge investment that requires thorough planning and preparation. If you’re trying to pinch some pennies to afford your next dream home, our knowledgeable real estate agents at BlueWest Properties can help! We know all the tips and tricks that go into saving for a home, and we’re happy to help you find something that suits your needs, and is within your budget. Contact us today to learn more.