How to Save Money When Buying a House

(Disclaimer: I am licensed in real estate, not in the mortgage industry. For the most up-to-date information and the nitty gritties, please contact a licensed mortgage lender.)

It seems like every time we turn around these days, the price of everything is going up.

And up.

And up again.

And then, just for funsies, up again.

It might seem nearly impossible to buy a house, but sometimes life circumstances make it necessary (a job gets transferred, a baby is born, or a relationship unravels).

In other words life happens, and when it does how do you keep from paying out the nose for something you need?

That’s why you’ve come to me 🙂

Even in this economy, you do have a few options for trying to keep as much money in your pocket as you can.

1.) A 2/1 BUYDOWN

A 2/1 buydown is seller paid and based on the amount of your loan. It’s where you buydown (that title took some thought, didn’t it?) your interest rate for the first 2 years of your mortgage. The first year would be 2% below the current market rate, the second year 1%, and from years 3-30 it returns to the current market rate. It would look a little something like this:

Current Rate (as an example)- 7.5%

First Year-5.5%

Second Year- 6.5%

Three-Thirty- 7.5%

However, starting year 3 if the current market rate is lower than the one you have, you’re free to refinance to capture that lower rate! Like they say: buy the house, but date the rate 😉

2.) Assumable Mortgage

If the house you’re looking to purchase has a mortgage that’s assumable (FHA, USDA, and VA loans are assumable.) (Plus you don’t even have to be a veteran to assume a VA loan! Wild, I know.)(And you can’t a buy a farm with USDA… I guess that made sense to somebody), you might be able to assume that loan! It’s tricky, but people do it every day and it might be the ticket you’re looking for to save a little coin. Assuming a loan that has a 2-3% mortgage rate?? Yes please!

3.) Adjustable Rate Mortgage

If you’re looking at a place that isn’t your forever home and you know you’ll be moving within 3-5 years, an ARM is a great choice. This is a great option if you know your job is only going to be placing you in a certain city for a limited amount of time, or if you know you’ll be trading up within the next few years. I wouldn’t recommend it if this is where you’re going to be for the next 8-10 years+, but it’s a great short term option.

These are just some options to try and save you some money in buying your next home. I hope this helped!

What real estate topic would you like me to tackle next??