With wages lagging behind the continuing growth in home prices, things are getting much tougher for many people who want to buy a home. Even with the current low-interest rates, the increase in home prices relative to wages a threefold discrepancy in some Western states has put buying a home out of reach for some people. This means, then, that saving money when buying a home is now more important than ever and there are ways to do it. So check out these top secrets for saving money when buying a home in Omaha and Council Bluffs.
Improve Your CreditScore
One sure-fire way to save money when buying a home in Omaha and Council Bluffs is fairly simple, though it may take some time. And that is to improve your credit score. Doing so will get you better mortgage rates and terms, as well as lower lender fees, which can save you several thousand dollars over the life of your mortgage.
Be sure, then, to do at least the following . . .
“Pay down your credit card balances. The balance on your credit cards vs. the credit limit is called your credit utilization ratio. This ratio accounts for 30% of your overall FICO score. Only your payment history (35%) has a higher impact on your credit rating. It’s recommended to keep your balances below 15% of your credit limits to maximize your credit score.
“Don’t apply for new loans or credit. New accounts and hard inquiries make up 10% of your credit score. When you open a new account, your credit score will take an initial drop for a couple of months. When you know you’re going to be applying for a mortgage soon, it’s best to hold off on buying that new car or getting that credit card.”
Avoid Private Mortgage Insurance
Another effective way to save money when buying a home in Omaha and Council Bluffs is by taking the steps necessary to avoid having to pay for private mortgage insurance (PMI). You can do that by saving enough pay at least 20% down on the home.
Without a 20% down payment, “you’re going to be stuck paying for mortgage insurance. Private mortgage insurance (PMI) is insurance on the mortgage loan itself. If a borrower defaults on the loan, the lender is reimbursed for the funds lost.”
If you’d like to learn more about how PMI works, contact a local real estate agent in Omaha and Council Bluffs at 402-378-9462.
Buy Near a Promising Neighborhood/Area
A little-known top money-saving secret for buying a home in Omaha and Council Bluffs involves buying near but not in a promising or up-and-coming neighborhood or area. You have the potential to reap the benefits without having to pay a higher price.
“One of the best buying decisions is buying near a hot neighborhood. Sometimes, it’s just not practical or affordable to buy in the hottest communities, but looking nearby might be the best move. You can often save 20-30 percent on the purchase price. And most importantly, you’ll see faster appreciation rates.” You’ll also be very near the amenities that make the “hot neighborhood” hot.
Keep in mind, though, that this can be a difficult strategy to get right in fact, it could backfire. So be sure to consult a local realtor in Omaha and Council Bluffs at 402-378-9462 to find out about neighborhoods you’re considering.
Buy During the Off-Season
Buying a home during the off-season can also be a great way to save money on the purchase. During the peak season, demand typically exceeds supply, which drives prices up and makes it much harder to negotiate a lower price, as well as increasing the likelihood of bidding wars.
In most markets, the best time to sell your house fast in Omaha and Council Bluffs is typically in late May to early summer, and the worst time to sell is in late winter, typically January and February, the off-season. But that also means it’s the best time to buy in order to save money. Sellers who want to sell their house fast in Council Bluffs and Omaha will have far fewer offers. As a result, they will likely start with a lower asking price and will be more willing the lower the price during negotiations.
Partner With a Local Real Estate Agent
The final not-so-secret tip for buying a home and saving money is to partner with an experienced local agent in Omaha and Council Bluffs. Your local real estate agent in Council Bluffs and Omaha can help you . . .
- Evaluate the market and specific homes to know which ones are underpriced and which are overpriced
- Identify homes that are a great value right when they’re coming on the market (or even before)
- Negotiate a lower price and a better deal
- Avoid overpaying due to unfavorable contingencies
- Get more favorable money-saving contingencies
Ultimately, if you want to pay less, it pays to partner with a local realtor in Council Bluffs and Omaha who knows the local markets well. If your goal is to save money when buying a home in Omaha and Council Bluffs, then contact a professional local real estate agent in Omaha and Council Bluffs like Chris and her team at Homes By Chris Harter today at 402-378-9462 or www.homesbychrisharter.com!