How to save money with a new house


There’s no doubt about it: buying a home is one of the most significant investments you’ll make. It’s not just your down payment – closing costs, routine maintenance, and realtor commissions all chip away at your savings.

Want to be a proud owner of a new home, but afraid of becoming house poor? In this blog, we’ll run down ten tips that will cut your homeownership costs.

via One Kings Lane

(1) Save up a 20% down payment (minimum)

We get it: you’re sick of renting and want to get into that shiny, new suburban home ASAP. With plenty of low/no money down options out there, it’s tempting to pull the trigger. However, these offerings come with strings attached, like mandatory mortgage insurance or higher interest rates. Combined, these charges could cost you more over the life of your loan than a 20% down payment mortgage.

By taking the extra time to save up 20% of the purchase price, you’ll have lower payments every month. Alternatively, you could shorten the term of your mortgage, enabling you to pay off the principal faster. You will also want to know exactly how much you can afford before shopping for a home, so go to to get an accurate estimate.

(2) Solicit quotes from multiple mortgage brokers

As of February 2019, the average fixed mortgage rate in America sat at 4.75% for a 30-year term. However, it’s just that – an average. The rate you’ll get quoted varies from broker to broker. Each lender has an internal process that allows them to arrive at a number. It weighs factors like property type/value, credit scores, when the buyer plans on buying, and so forth.

If you take a rate 1-2% higher than you could’ve gotten, it will cost you tens of thousands of dollars. By doing your homework, you could take this saved money and invest it, pay for your kid’s education, or build an awesome backyard deck.

(3) Get a home warranty

Stuff happens – it’s just a fact of life. Machines, like your stove, air conditioner, or furnace, eventually break down. Many homeowners think their insurance will cover it, only to get a rude awakening from an uncaring CSR.

Here’s the problem: when these appliances or systems break, the bills can get enormous. Furnaces and air conditioners can cost upwards of $900 to repair, or more than $4,000 to replace. You could establish a maintenance fund, but let’s be honest – only the most organized people can manage that.

For the rest of us, a home warranty is a more realistic option. One annual premium of $400-$600 per year plus a low service fee (like an insurance deductible) is all you’ll pay. For example, by signing up for HomeGuard’s services, all you need to do is call whenever anything covered breaks. They send a contracted repairperson to your home who fixes the problem appliance/system, or they replace it. Done.

The predictable costs of a home warranty make it easier to budget for home maintenance. As a result, you won’t have to worry about unexpected issues ruining things like your winter holiday. Now, that’s something we can get behind!

(4) Buy during the winter months

It’s no mystery why spring to fall is home buying season. Temperatures are warmer, making it easier to move house. Properties look better, as everything is lush, green, and blooming. And when the weather is ideal, everybody is in a better mood.

However, consider this: sometimes, people are motivated to sell. They’ve accepted a job in another city, their last remaining parent passed away, or a couple is getting divorced.

These rush sales don’t always happen during the prime selling window. When they occur in winter, a lack of buyers can drive price reductions. According to a study conducted by personal finance company Nerdwallet, prices in January/February are 8.45% lower than in June/August.

Yes, moving during the middle of winter can be crummy, but think about the lower mortgage payments you’ll be making!

via Design Threads

(5) Improve your credit score

As mentioned above, credit scores are one of many factors mortgage lenders consider when quoting interest rates. Generally speaking, the better your number, the lower your interest rate will be. According to’s loan savings calculator, a buyer with a score of 770 can qualify for a rate of 4.17%.

Meanwhile, a buyer with a credit score of 630 may get stuck with a 5.76% interest rate. Assuming a $200,000 loan, they would pay almost $70,000 more in interest than someone with sterling credit.

If you’re carrying a balance on your credit cards, pay them off. Next to payment history, it has the most significant impact on your score. Even getting your number up to 670 would fetch an average rate of 4.78%, saving more than $40,000 over the life of a 30-year mortgage.      

(6) Target a less expensive house

Sometimes, a dose of reality is in order. We all want that 2,000 square foot home in a desirable neighborhood, but often, our budget says no. By buying something cheaper, saving up a 20% down payment becomes easier, avoiding costly mortgage insurance and higher rates.

There are cute character homes, properties in neighborhoods with potential, and condos out there within your budget. If there aren’t, be patient.

via Home Bunch

(7) Appeal your property’s valuation

Property taxes are another cost of home ownership that new buyers don’t think about. Often in the thousands of dollars, the first bill comes as a shock to many. Depending on the condition of your home, it may be worth appealing the value of your property.

The property appraiser for your area doesn’t have time to assess each home’s value individually. Instead, they may make blanket assumptions that could make its value higher than it is.

On the other hand, appealing your valuation could backfire. If the appraiser concludes your property is more valuable than initially thought, your taxes will go up, not down.  

(8) Find cheaper homeowner’s insurance

Often, when you buy a new home, a default homeowner’s insurance policy is included. Like any industry, though, prices vary from one company to the next. Shopping around for rates, bundling it your auto insurance, and hardening your home against disaster are all ways to lower your monthly premium.  

via Fresh Home

(9) Make extra payments each month

Just got a raise at work? Take a portion and add it to your monthly mortgage payment. Let’s say you have a mortgage balance of $200,000. By tossing $200 extra dollars on a monthly payment of $800, you’ll shave about two years off your term. Not bad for a small adjustment!

(10) Install a programmable thermostat

During summer or winter, it can be easy to jack the A/C or the furnace. However, it’s also easy to forget to turn it down when we head to bed or off to work. A programmable thermostat fixes these issues – by setting temperatures for when you’re awake, asleep, or away from home, you won’t have to worry about touching it again.

What temperatures should you set? In winter, 68-72°F when you’re awake, and 62-66°F when you’re asleep/working is the ideal range. In summer, setting the A/C at 78°F will keep most comfortable, while 88°F will prevent your home from becoming too stifling while you’re at work.


This site uses Akismet to reduce spam. Learn how your comment data is processed.