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    The process of buying a new home is a significant financial decision that requires careful planning and consideration. One of the primary concerns for many prospective homebuyers is finding ways to save money throughout the process.

    From negotiating the purchase price to exploring home financing options, there are several strategies you can employ to ensure that you make a wise investment while keeping your finances in check.

    Research and Compare

    According to the National Association of Realtors, 51% of homebuyers found their homes through the internet in 2020. Utilizing online platforms and real estate websites to research and compare prices for similar properties can provide you with a realistic understanding of property values. This information will help you negotiate effectively and avoid overpaying.

    Work with a Knowledgeable Real Estate Agent

    The National Association of Realtors reports that 88% of buyers purchased their homes through a real estate agent or broker in 2020. Having an experienced agent by your side can provide valuable insights into local market trends, helping you identify good deals and assisting with negotiations.

    Negotiate the Purchase Price

    According to Zillow, in 2020, the median listing price of homes in the United States was $340,000, while the median sale price was $295,000. This demonstrates that there’s often room for negotiation. Your research and the guidance of your real estate agent can help you determine a fair offer, potentially leading to substantial savings.

    According to Redfin, homes are taking 33 days longer to sell than last year when the housing market was ultra-competitive. This means there’s room to negotiate.

    Especially if you can close fast!                                                                 

    Consider a Fixer-Upper

    In 2020, a study by showed that fixer-uppers were priced about 8% lower than similar move-in-ready homes. While these properties may require renovation and repairs, they often come at a lower initial cost. Proper planning and budgeting can turn a fixer-upper into your dream home while staying within your budget.

    Shop Around for Mortgage Rates

    Mortgage rates fluctuate based on market conditions. In 2020, mortgage rates reached historic lows, with the average 30-year fixed-rate mortgage dropping below 3%. Even a slight difference in interest rates can lead to substantial savings over the life of your loan.

    Improve Your Credit Score

    A report by the Consumer Financial Protection Bureau suggests that a borrower with a lower credit score could pay tens of thousands of dollars more in interest over the life of a mortgage compared to a borrower with a higher credit score. Improving your credit score can help you secure a lower interest rate, resulting in long-term savings.

    Explore First-Time Homebuyer Programs

    In 2020, the Federal Housing Administration (FHA) insured 11.5% of all home purchase loans. First-time homebuyer programs, like those offered by FHA, can provide opportunities to save on down payments and closing costs, making homeownership more attainable for many.

    Conduct a Thorough Inspection

    According to the American Society of Home Inspectors, 88% of homebuyers ordered a home inspection in 2020. Spending a little on a thorough home inspection can potentially save you from costly surprises down the road, providing you with leverage in negotiations or helping you decide whether the property is worth pursuing.

    Avoid Private Mortgage Insurance (PMI)

    In 2020, Zillow reported that the median down payment for first-time homebuyers was 12% of the purchase price. If you’re unable to make a 20% down payment, you’ll likely have to pay for private mortgage insurance (PMI). Saving for a larger down payment or exploring financing options that don’t require PMI can help you avoid this additional expense.

    Plan for Future Expenses

    According to the U.S. Bureau of Labor Statistics, homeowners spend an average of $3,700 annually on home maintenance and repairs. When budgeting for your new home, don’t forget to consider property taxes, homeowners association (HOA) fees, maintenance, and utility costs. Planning for these expenses from the beginning can prevent financial strain down the road.

    For more up-to-date data to consider:

    • As of March 8, 2023, the average 30-year fixed-rate mortgage rate is 5.27%. This is significantly higher than the historic low of 3% in 2020.
    • Home prices have been rising steadily in recent years, and this trend is expected to continue in 2022. The National Association of Realtors (NAR) predicts that the median home price in the United States will reach $428,700 in 2022.
    • There are several first-time homebuyer programs available, which can help you save money on your down payment and closing costs. Some of the most popular programs include the FHA loan, the VA loan, and the USDA loan.

    Here are some additional tips to save money when buying a home in 2022 or 2023:

    • Consider buying a condo or townhouse: Condos and townhouses are often more affordable than single-family homes, and they can be a great option for first-time homebuyers.
    • Look for homes that need some TLC: If you’re willing to put in some work, you can often find homes that need some TLC for a lower price. This can be a great way to save money on the purchase price and get a home that’s customized to your taste.
    • Shop around for homeowners insurance: Homeowners insurance can be a significant expense, so it’s important to shop around and compare rates. You can use online tools like NerdWallet or Policygenius to compare rates from different insurers.
    • Negotiate with the seller: Don’t be afraid to negotiate with the seller on the purchase price. You may be able to get a lower price if you’re willing to do some research and be prepared to walk away from the deal.

    One important step to ensure you’re aware of all the available programs and options that suit your financial situation is to reach out to a professional at Embrace Home Loans®.

    Our expertise in the field can provide you with personalized guidance tailored to your needs. By contacting our Embrace Home Loans professional, you can review all the programs you may be eligible for, gaining insight into various financing possibilities, down payment assistance programs, and potentially lower interest rates.

    Remember that careful planning, informed decision-making, and the guidance of professionals will pave the way for a successful and financially prudent home buying journey. Whether it’s understanding mortgage options, exploring down payment assistance, or simply seeking expert advice, our expertise can make a significant difference in achieving your homeownership goals while making wise financial choices.

    Your mortgage options for a smooth journey home.

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