The Guide to Saving for Your First Home

Getting onto the property in 2019 in the US can be a bit of a challenge as property prices can be high. Depending on where you live in the US, sometimes people need assistance to get that first mortgage which seems to be a worsening trend unfortunately. Once on the ladder, it becomes a lot easier however there are a lot of people or companies that see this as an opportunity to make easy money from the first-time homeowners. It is therefore important to be vigilant and do your research in advance to make sure that you are well prepared for all eventualities.

Insurance Cover

If you go on the internet looking for insurance cover for your home, you will be overwhelmed with all the results that come back at you. It can become complicated and it is important that you do not jump straight away to the “cheapest” as this could be more expensive in the long run. Clearly, the insurance companies will all compete and will look to get to the top of the rankings, so the customer thinks they are the best. Two things that can catch out first-time-buyers is the deductible insurance and hazard insurance. Deducible is effectively the excess that applies to the agreement where if you have a claim, this is deducted. The higher the excess the cheaper the claim. An example of this will include – if you were to have a high claim at $5,000 but an insurance deductible of $1,000, you would only receive effectively $4,000.

So, what is hazard insurance on a mortgage? This is when you are covered for some extreme events such as flooding, earthquakes or explosions. It is very unlikely that something like this will happen however it does happen then you want to make sure that there is the right cover in place, and you are not left short in the pocket. Take the time out to read all the small print in these sorts of policies to ensure it meets your requirements.

Efficiency

There are a lot of things you can do to your home in order to save the pennies in terms of heating. For a small fee, you can get things such as solar power panels put on the roof where there is a longer-term efficiency saving. As a result, there is an initial charge to get this done, however, the longer-term savings are plentiful. When you purchase the first home you will want to look out for things like this and if not, make sure the house has energy efficiency systems in place (like double glazed windows and doors) to keep the heat in, otherwise, you could find yourself paying a lot out on monthly bills. You could ask the estate agent or seller of the property what it is they pay annually for their bills to give you an idea. Cross-reference this with the internet to see what opportunities there are to reduce this bill – potentially using a comparison website.

Legal Fees

Probably one of the most expensive outgoings when purchasing a home (apart from the value of the home) is the legal fees attached to this. It is highly recommended that you get this right and use a reputable company / person, or you could get sub-standard service / contracts that could leave you exposed down the road. There are many different companies out there only too happy to take this on for you and you will see the billboards on the highways but take the time out to research the person or company in advance of jumping into this. One of the best sources of recommendation for the legal representation is the word of mouth. Ask people that have gone through a home purchase recently who they used and if they are worth contacting.

Negotiation

People think that they need to pay the listed price for the property, but you certainly do not. No matter what price the property is listed for you can put in whatever offer you choose. There is danger though that by doing this you could lose the property, and someone outbids you so you need to do this delicately. A lot of how much you negotiate will depend on how much you really want the property. Your legal representative may be able to find out how many other people are interested in the home therefore giving you a good indication on how strong your negotiating lever is.

Make sure to consider these tips when saving for your first home.