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Section 5 - Chapter 28
More Ways To Save Money
Here are a few more ways to save money buying your home.
Get A FHA Mortgage Insurance Reduction
Are you getting an FHA loan? Ask the lender about the "HELP," or Homebuyer Education Learning Program. It's designed to help people begin the home buying process, and covers budgeting, finding a home, getting a loan, home maintenance, and more. Completion of this program may entitle you to a reduction in the initial FHA mortgage insurance premium from 2.25% to 1.75% of the purchase price of your new home. That means $700 less at closing on a $140,000 loan.
Avoid Credit Life Insurance
Some lenders will offer "credit life insurance" with a loan. Unless it is a requirement of the loan, skip it. It is policy that pays off the loan if you die. If you feel you need this kind of coverage, just buying life insurance for a similar amount is usually cheaper.
Sell Things Instead Of Moving Them
A friend of mine needed to have a large garage sale a year after moving into his new home. He had moved hundreds of things that he didn't need, and had to rent a larger, more expensive truck just to do so. Have the rummage sale before you move, to save money and trouble moving.
Switch Your Light Bulbs
As soon as you move in, switch all the bulbs in your new home to compact fluorescent light bulbs. They are under $5 now, and will save more than they cost in the first year.
Pick A Better Closing Date
If you are buying a duplex or other home that is currently rented, you will be entitled to the rents from the day you close. If you close in the first few days of the month, most of that month's rent, which was presumably paid in advance, will be credited to you at closing, reducing your cash needs. If it isn't a rental, try to close near the end of the month, to reduce the prepaid interest that you will have to pay at closing for that month.
Get Full Market Rent From Seller
Sometimes the seller needs to stay in the home for a while after closing. He pays rent, of course, according to what is in your agreement. It is common to have relatively low rent in these cases, but there is no good reason for this. Demand full market rent for any days of occupancy when you are negotiating this part of the contract.
Plan House Hunting Trips Efficiently
Make a route that allows you to see several towns you are interested in, all in one trip. Have appointments to see homes scheduled before you go, so you can pay for fewer nights in hotels. Research more on the internet and you'll be able to eliminate some towns without the cost of visiting.
Reduce Moving Costs To Save Money
If you are moving in the same town, get your friends to help you move (buy pizza for all). If moving a short distance, consider renting a truck yourself. If you are moving because of your employer, negotiate for them to pay. In all cases, consider what you really need to move. People spend hundreds of dollars extra to move things that are junk or will soon be in a rummage sale.
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