How to save to the max when buying a home

The experience of buying a new home can be overwhelming, but if potential buyers approach it smartly, it can be both exciting and financially rewarding. Knowing exactly what to do, what to look for and what pitfalls to avoid can put a good amount of cash back in your pocket.

Buying and insuring your home can involve a lot of paperwork, logistics, and a fair amount of money, says Susan Steward, spokesperson for Budget Insurance, but it’s absolutely worth it, especially if you do your homework and act wisely. We do.” A penny saved here and a few bucks there can eventually add up to a healthy amount and paying for a few extra upgrades, finishing touches or a proper housewarming can help you settle some debt, make for a little bit of unforeseen circumstances. Might save money or who knows, maybe even get away.

Make sure you are financially prepared:

  • Take the time to save: Prepare to buy a home early, giving you a good deposit, ample time to save on the purchase process and the costs involved in renovation. A good deposit amount can save you thousands over the life of your home loan. Also note that, in addition to the purchase price, you will need to budget for transfer fees, attorney transfer and bond registration fees as well as initiation fees.
  • Check the Insurance tick box: Make sure you have insurance on the property – covering bonds, building insurance, home contents insurance and personal liability insurance.
  • Fully clear on debt: Pay off your debt well and improve your credit score. The better your credit score, the better your risk profile and the higher your chances of getting a competitive interest rate. Make sure all your accounts are up to date and paid off regularly, check your credit score and resolve any issues before applying for a home loan.

house hunting process

  • Location, location, location: Consider the suburb you want to live in – living near schools, your workplace, etc. will save fuel costs for commuting.
  • security check: Living in a home and suburb with excellent security measures can reduce risk and lead to better insurance premiums.
  • Compare: Make sure the same property is not listed elsewhere at a more competitive price.
  • bargain: Negotiate the sale price and don’t be afraid to make a cheeky offer. If you use an agent, make sure their commission is competitive. The seller pays the agent, but the lower commission may see them being more flexible on the sale price.
  • off plan: Buy a home off-plan in a development and you won’t pay transfer fees.
  • under one bar: Homes under R1 million are exempt from relocation fees, which saves you a significant amount.

Once you find the house you want:

  • Home Loan Shopping: Shop around and compare to make sure you’re getting the best deal with the lowest fees and best interest rates. Don’t just go to the bank where you transact and assume that they will give you the best value for money.
  • Invest in an Inspection: The appraisal done by the mortgage provider only checks that your offer on the property is a fair value. Consider doing an independent inspection of the property to check that there are no defects you haven’t noticed, such as concavity, rising moisture, roof problems and retaining wall stability.
  • Loan inquiry: Make sure the property you are buying does not have any outstanding rates, taxes or utilities as you will not be able to open a new account until you have paid the same.
  • A lawyer, ticked two boxes: Seller has the right to choose a transferring attorney, but it is advisable to negotiate with Seller to use the same attorney for transfer and registration, so that you can negotiate a better fee for both services.

Moving to your new home:

  • Cut the Clutter: Having fewer things to move can save you a lot of money, so get rid of things you don’t need before moving. Removing these items from your insurance policy can also save you significant amounts of cash.
  • Re-purpose: Decluttering is good, but if there are items from your old home that you can easily rearrange and use in your new one, try recycling and reusing them to save.
  • goods in transit: Make sure your insurer covers goods in transit and whether this option is also provided by your moving company. Not only does this protect you against a significant financial outlay if stuff needs to be replaced, but it also helps you not double up on cover and end up paying more than you should.
  • Maintain to save: Maintaining your home is important to maintain the value of your home and avoid costly repairs. This also results in fewer insurance claims, which can have a positive impact on your risk profile and your premiums, and save you even more.

When you tick all of these boxes, you could end up with a few hundred to thousands back in your pocket, so it makes sense to be smart about buying a home… and cents.

Susan Steward is a spokesperson for Budget Insurance.

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