Wednesday, January 25, 2023

Money Matters: Brilliant Hacks to Consider Before Purchasing a New Home


Image via Unsplash

It is true that the idea of buying a home continues to be the American dream, but one look at the real estate market will tell you that purchasing a property is getting more expensive all of the time. Instead of just forking over the money you have, it is important to have a strategy so you can save the most money possible. Here at Frugal Focus, we know how important it is for you to find the perfect home, so we have some tips for how you can get a great deal before you sign the dotted line.

Learn How Mortgages Work and What You May Need to Pay

Before you make a final decision on a house, it is important to understand how mortgages work and how much you may have to pay to land the property. A mortgage is basically a loan to purchase real estate, and in order to get the money you will need, you will have to go through a lender. They will either give you a fixed-rate or adjustable-rate loan, and the difference will determine whether you pay the same amount going forward or if your payment could change.

It is important to remember that just like buying a car or another large purpose, the bank will be looking at your credit report to determine if you are a trustworthy borrower. The lower your credit score, the more you may end up paying monthly. If you have a credit score below 620, then the lender may not feel safe loaning you the money and you may need to work on your credit before you go house hunting again.

Weigh the Pros and Cons of a Home Warranty

Another cost consideration you will need to make is deciding if you will invest in a home warranty or not. A warranty certainly has its advantages because it allows you to pay a lower cost or no cost at all if something goes wrong on your property. In most cases, if you’re asking is a home warranty worth it, the answer is yes if you consider that the average price to fix an air conditioner or repair an HVAC system can be upwards of $5000 or more.

It is important to realize that there are some things that a home warranty won’t cover, including the repair or replacement of issues that were damaged on the house before you moved in. So, it is a very wise idea to check the inspection report for any major red flags before you purchase the house, so you are not on the hook for any pre-existing issues on systems or appliances. Keep in mind that a home warranty will be an extra expense each month, but it may be well worth it for peace of mind.

Check Your Credit Report for Errors

There are a few tactics that you can try when it comes to raising your credit score and improving your clout as a potential home buyer. First, check your credit report for potential errors. If you find any loans or purchases that you did not make, then report them to the credit borough immediately. If there is proof that a loan is fraudulent, and it gets fixed, then your score could jump back up to a respectable level. The higher your credit score, the lower your payment or interest rate.

Pay Off Debts to Be More Attractive to Lenders

If you have real debt problems, then another solution is to start paying off what you owe. When you do, consider using the debt snowball strategy, in which you start paying off your debts starting with the smallest accounts first. That way, you can start building momentum as you see the loans and credit cards fall off of your report. When you see the big changes in your account, it will inspire you to keep working at it.

As you can see, there are many tactics that you can try if you are either unfamiliar with the home buying process or you lack the credit to make it happen. Remember to be smart along the way. Take time to research mortgages, heavily consider the cost of a home warranty, and keep an eye on your credit, and you will get your dream home. 

Frugal Focus is a collection of the leading industry thought leadership in the form of blogs, webinars, and downloadable resources, on one convenient website. If you have any questions, feel free to email

No comments:

Post a Comment