4 ways to save when buying a home

It's no secret buying a home can be expensive. But there are many ways to save money when purchasing a home. TTCU is here to help you get the best deal possible so you can get into the home of your dreams.  Here are 4 ways to save money on your home purchase:

1. Negotiate your home price.

With the housing market slowing down, now is a great time to negotiate the price of your home.

There are a few things you can do to make sure you get the best deal possible. First, research the market value of the home. This will give you a good idea of what the home is worth. Next, make a fair offer. Don't try to lowball the seller, but don't overpay either. Finally, be prepared to walk away if you can't reach an agreement.

If you're prepared to negotiate, you can save yourself a lot of money on your home purchase.

2. Purchase mortgage points to lower your interest rate.

When it comes to buying a home, one of the most important things to consider is the interest rate. Interest rates can have a huge impact on your monthly payment. Borrowers can obtain a lower interest rate by buying discount points, also referred to as mortgage points. Purchasing mortgage points means you are prepaying the interest to have a cheaper monthly payment. These points are a one-time fee and are paid upfront at closing.

If you are considering buying mortgage points, it is important to determine how long you plan to live in the home. The longer you plan to stay in your home, the more you will benefit from purchasing mortgage points. Mortgage points can be a great way to save money, but they do not make sense for everyone. Meet with a TTCU mortgage lender to help you decide if buying mortgage points is right for you.

3. Improving your credit score can lower your interest rate.

One of the most important things you need to know about buying a home is the importance of your credit score. Your credit score will determine your interest rate, and a high interest rate can add thousands of dollars to the cost of your home.

To get a good idea of your credit score, you can use TTCU's Credit Scorecard feature located in the mobile app and online banking. This tool will give you a detailed report of your credit score and credit history. It's a good idea to check your credit score regularly, especially before you start the home buying process.

If you need to improve your credit score, there are a few things you can do. First, make sure you pay your bills on time. Next, try to reduce your debt-to-income ratio. And finally, dispute any inaccurate information on your credit report.

By understanding the importance of your credit score, you can save yourself a lot of money on your home purchase.

3. Lower closing costs or interest fees by negotiating seller contributions.

There are a lot of costs to consider when buying a home. You can reduce these costs by asking your realtor to negotiate seller contributions. Contributions can be applied directly to closing costs or can be used to buy down your interest rate.

Closing costs are the fees and expenses that come with finalizing your purchase. Closing costs are generally 2-6% of the sale price of the home. Some sellers may be more willing to contribute toward closing costs rather than lowering their home price.

Contributions can also be used to temporarily lower your interest rate, better known as a buydown. A temporary buydown is an option that creates a buydown account, usually funded by the seller or builder, that is used to temporarily reduce the borrower’s monthly payment during the initial year(s) of the loan. The interest rate remains constant; only the borrower’s monthly payment is reduced, and borrowers must still qualify at the locked note rate.

At TTCU, we offer a 2-1 buydown. A 2-1 buydown gives the borrower a discounted interest rate for the first 2 years of the loan's term.

2-1 Buydown Breakdown:

  • Payment calculated at 2% below the Note Rate for the first year
  • Payment calculated at 1% below the Note Rate for the second year
  • Payment calculated at the Note Rate for years three through maturity

If you have any questions about negotiating seller contributions, reach out to a TTCU mortgage lender.

Purchasing a home is a huge financial decision, but there are ways to save money throughout the process so you can get into your dream home and stay in it. TTCU is here to help you get the best deal possible with our competitive rates and personalized products. Schedule an appointment with a mortgage lender today to learn more about how we can help you save money on your next home purchase at ttcu.mortgage.