Buying a new home costs a lot of money, however some of that outrageous expense can be reduced if you research and do your homework.
Only apply for a home loan if you have a high credit score. Higher credit scores equate to lower interest rates, thus saving the home owner thousands of dollars over the term of the loan.
Check your credit report before you apply, and make sure you pull reports from all credit bureaus because your home loan provider uses all credit reports in determining the buyer’s creditworthiness and ability to repay the home loan. If your reports have mistakes, get the mistakes corrected.
The two most important factors that calculate your credit score is your current credit card balance and if the payments are made on time.
Always shop around and gather more than one insurance quote. This may sound like a nuisance, but it really helps you save money in the long run. Lending is a competitive business, which means lenders will compete against each other for your service. Competition equals lower rates for you, the home owner.
Ask the seller to pay your closing costs. These are costs that are paid when you obtain your home loan. They are between three and seven percent of the home’s total cost and include points, taxes, title insurance, financing and other settlement costs. Many sellers are willing to pay these costs for buyers. This can save you a lot of money. If the seller doesn’t offer to pay the closing costs, then simply ask. The worst that will happen is the seller will say no. You have nothing to lose by asking.
If the seller refuses to cover the closing costs, consult the lender and request a negotiation of a lower rate on the closing costs.
While buying a home and obtaining a home loan can feel overwhelming at times, there are ways to cut costs and save money on your home loan. You have to do your homework, negotiate and be willing to ask for discounts. Talk to a qualified home loan provider. They can look at your situation and determine what home loan is right for you, helping turn your dream of owning a home into a reality.
Tom Martens is the content coordinator for South Arica?s leading Homeloans portal which amongst others offers Bond origination services for all major banks.
