Buying a house is a big investment and will likely be the largest financial transaction of your life. And it’s getting more and more costly with home prices still rising (albeit at a slower pace) and interest rates going up. That means buyers need to cut costs and save money anywhere they can. It can be done if you know a few key strategies and tactics. Read on, then, to discover 4 hacks to help you save money when buying a house in Santa Cruz.
1. Ask for What You Want
Our first hack to help you save money when buying a house in Santa Cruz is simple, but not always easy for many people to do. But it works, so you should muster up the courage to do it. And that is to ask for the things you want.
For the past few years across the country, the real estate market has been a strong seller’s market. As a result, sellers, because they have been in the driver’s seat, have been largely unwilling to make concessions and grant perks. But there is some evidence that the market is cooling a bit, and sellers have lost some of their leverage. The upshot is that they are likely to be more willing to throw in some extras to sweeten the deal.
So when buying a house, be sure to ask sellers for what you want. This typically involves requesting that they leave behind larger items like appliances. Be sure, then, to ask the seller to leave behind things you may want, such as a refrigerator, washer and dryer, and patio furniture. If they agree to let these items go with the house, you won’t have to buy them when you move – which can save you a significant amount of money.
Many sellers are downsizing and don’t want to have to move these items and then find a way to fit them into a smaller space. With bidding wars less common, they may be willing to grant your requests. Ultimately, you’ll never know if you don’t ask.
2. Improve Your Credit Score
Another way to save money when buying a house is by improving your credit score. You need the best credit score you can get because it will get you a better rate and better terms on your mortgage. Lenders offer better rates to borrowers who are more financially responsible and less of a risk.
Just a percentage point or two can save you a ton of money over the life of your loan. So get to work now improving your credit score.
To improve your score, you should certainly avoid taking out new lines of credit, pay down (or off) existing debt, and make payments on time. But don’t neglect to check your credit report for errors. (These are more common than you may think,) If you find any errors on your report that impact your score, get them cleared up before applying for a mortgage.
3. Try to Pay 20% Down
You can also work toward saving enough money to be able to make a 20% down payment. This too will allow you to save money when buying a house for a few reasons.
First, your monthly mortgage payments will be smaller, thus increasing your chances of paying off the loan early and saving a significant amount on interest. Second, a 20% down payment will allow you to access conventional loans, which typically often have better terms than, say, FHA loans. And, finally, you won’t have to pay for private mortgage insurance (PMI0.
Even if you can manage to come up with a 20% down payment, paying as much down as possible will still save you some. For some guidance here, you can contact a Santa Cruz agent at 831-588-2334.
4. Buy During the Off Season or Buy a Fixer-Upper
There are two remaining tactics that will help you save money when buying a house in Santa Cruz: buying during the off-season and buying a fixer-upper.
Historically, spring and early summer have been the hottest seasons in real estate. The weather is nice, people are house hunting, and sellers have it good. During colder months, though, buyers are far fewer, which means sellers may be willing to sell for less. This is especially the case if a seller couldn’t sell her house during the spring or has to list it during the winter = when prices are typically lower. Buying during the winter just may allow you to get a deal and save money.
The other option here to save money when buying a house is, of course, buying a fixer-upper. This has the potential to get you the best deal and save you the most money. But you do have to be willing to invest some money and/or sweat equity to make the needed repairs and upgrades. So if you take this route, you must make sure you know exactly what you’re getting into and whether the savings will outweigh the repair costs.
