9 Ways To Save Money When You Buy Your House1. Knowing when to buy your house
Experts would say now, if you meet the following criteria:
Are not counting on price appreciation in the short term. Most experts don´t expect home prices to inflate much in the next couple of years.
Can afford the monthly payments.
Plan to stay in the house long enough for the appreciation to cover your transaction costs. The costs of buying and selling a home include real estate commissions, lender fees and closing costs that can amount to more than 10% of the sales price.
Need a tax break. The mortgage interest deduction can make home ownership very appealing.
Prefer to be an owner rather than a renter.
Can handle the maintenance expenses and headaches.
Are not greatly concerned by dips in home values.
2. Knowing how to figure what you can afford to buy
Roughly, it´s three times your annual income. Real estate experts strongly recommend people get prequalified by a lender as a way of calculating exactly how much of a home they can afford, When qualifying people for a loan, lenders look at a borrower´s full financial standing. Lenders use the relationship P1TI, or principal, interest, taxes and insurance payments, and their gross monthly income. Generally, lenders like to see the PITI not exceed 30% to 33% of the borrower´s gross monthly income. They also consider the ratio of the borrower´s monthly debt payments, including the PITI to income. Some lenders have flexibility in these qualifying ratios. 3. Knowing if it is better to make a large or small down payment
Putting down as little as possible and taking a larger mortgage allows buyers to take full advantage of the tax benefits of homeownership. Mortgage interest (and property taxes) are fully deductible from state and federal income taxes.
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