Do you feel like you need a few tricks up your
sleeve to buy a home? Good news! You don’t need to work magic to purchase a
property. Shed that sensation with these terrific, under-recognized financial
hacks for homebuyers.
Increase
Your Credit Score
When it comes to buying a house, your credit
score is a pivotal piece of information. As explained by SmartAsset, your credit score has a
three-pronged, direct impact on your home loan. It affects the amount of your
loan, your interest rate, and the kind of loan you can get. Your credit score
is a snapshot of your financial health, and the better your rating, the better
your loan will be. Therefore, it’s in your best interest (literally!) to increase your credit score. Before you begin
the homebuying process, you should request a credit report and review all the
data on it to identify room for improvement. You can improve your credit rating
in several different ways:
●
Dispute errors in your credit
history, such as accounts you never opened.
●
Pay down your debt.
●
Increase your credit limits, as
the margin between what is available and what you owe can appear to be
problematic.
●
Reconcile dings by asking for
forgiveness on late payments.
●
Negotiate removal of mistakes on
your part, such as unpaid debts.
●
Dispute other negative marks;
sometimes lenders will let go of issues if they are small or if their records
are inconclusive.
Stow
for Your Down Payment
Sometimes we do things we don’t want to do
because it’s a healthy choice. The typical down payment lenders require is 20
percent(min 5% on insured mortgages), and on a $200,000 home, that means coughing up $40,000. Saving up cash
for a bigger down payment is a great way to get a better home loan, but as Benzinga notes, it may mean making choices
that are uncomfortable. For instance, you can save your rent payment by housing
with a close friend or relative for a while or sell your car and take public
transportation or carpool. You should also research what the average down
payment is for homes in your target area, or the percentage of homes that sell
under their listed price. Saving up will help ensure you have sufficient funds
ready to negotiate your sale.
Besides your down payment and mortgage, there
are other home expenses to consider, including utilities and routine
maintenance. It’s a good idea to use a home cost calculator to get an idea of the
real cost of owning a home.
Find
Relisted Properties
Do some sleuthing! Look for homes that were
pulled off the market and relisted. As time drags on, the seller will often
accept a lower offer. When you’re examining listings, pay attention to the
continuous days on market (CDOM). That number tells you the number of days
since the property was initially listed.
Look
for Good Bones
As the Chicago Tribune points out, you can often
stretch your dollars by buying an ugly home. It’s also a great way to get into
a neighborhood you couldn’t otherwise afford. Finding a home in good repair but
out-of-date style-wise means you might be able to score a diamond in the rough.
Outdated appliances, flooring, paint, light fixtures, and other cosmetics may
not be easy on the eye, but they are often easy on the wallet. Make sure the
property’s roof, plumbing, foundation, and electrical structures are healthy;
you can work on making the place suit your style after you move in.
Winter
Can Work
Winter is when the housing market can slow
significantly. Some experts note that between weather, the
holidays, and being in the midst of the school year, many potential homebuyers
put things on hold. That means you can take advantage of the season, and you
might just have your pick of homes -- with less competition and better
bargaining power to boot.
Hacks
That Work for You
While it may be a challenge, you don’t need to
be a magician to become a homeowner.
Make wise decisions and incorporate smart financial hacks into your bag
of tricks. You’ll be a homeowner in no time!
