12 Ways To Save Money When Buying a Home

Buying a home can be an expensive endeavor. Aside from needing a hefty sum of money for a down payment, there are loads of extra fees and costs to consider. That's why saving even the smallest amount of money can go a long way in helping pad your savings or further insulate your monthly budget.

If you're looking for ways to save money on your next home purchase, consider these 12 moves.

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Hiring a real estate agent may not sound like a money-saving move, but there are major benefits to having a master negotiator on your side. Realtors can help bring down the pricing or work other cost-saving measures into your offer. Plus, since the seller is usually responsible for paying real estate agent commissions, you likely won't have to pay for their services directly.

Your credit score directly impacts your mortgage interest rate. The better the score, the better the rate. And even the smallest difference in interest rates can lead to thousands or even tens of thousands of dollars in savings over time. Paying down debt, making on-time payments consistently, and using your credit are a few ways to improve your score and lock in the best possible rate for your mortgage.

Not all mortgage lenders are considered equal. Each lending institution has its own criteria and standards for determining a mortgage rate or pre-approval amount. It's a good idea to shop around at different lenders to ensure you get the best mortgage rate and terms possible.

ALSO READ: How to Shop for a Mortgage

Fifteen-year mortgages often have much better interest rates than 30-year mortgages. Securing a shorter loan will shave off 10 to 15 years of interest payments and have a lower rate, leading to major money savings.

If you put down less than 20% of the purchase price at the time of purchase, you'll have private mortgage insurance (PMI) added to your loan to protect the lender in the event you default. When added up over the year, PMI payments can be several thousand dollars. By putting 20% or more down, you can eliminate this altogether and save money.

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Down payments are where the majority of the money goes in a home purchase. If you're putting 20% or more down, you could need tens of thousands of dollars to buy a home. Rather than coming up with all the money yourself, you could utilize downpayment assistance programs. Local municipalities and even national agencies offer assistance programs that can help offset some of the money you'd need at the closing table.

Negotiating can save you a ton of money when purchasing a home. Price is an obvious point of negotiation, but homebuyers can negotiate other items, like requesting repairs to the property through concessions or requesting the seller to pay some or all of the closing costs. Negotiating the terms of the contract enables you to lower how much comes out of your pocket at closing.

Recently renovated or move-in-ready homes are often sold at a premium. If you aren't interested in paying retail pricing, consider buying a fixer-upper (i.e., a home that needs some work). The more work the home needs, the deeper the discount you can usually get.

Just remember, you may not be able to secure traditional financing with a fixer-upper, so you may have to get creative when it comes to financing the purchase.

ALSO READ: How to Buy a Fixer-Upper Home

Purchasing a home in a seller's market will often lead to less negotiating power and higher pricing. Buyer's looking to save some money may want to consider waiting for the market to turn. If the seller's market persists, try to use favorable timing, like the slower winter season, to buy a home.

Homeowners insurance is a requirement for purchasing a home with financing and is an added cost many forget to consider. Property insurance, like mortgage rates, varies from company to company. Don't be afraid to shop around for different quotes, so you ensure you have the best coverage at the best price possible.

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Property insurance relates to the risk a home carries. Avoiding high-cost neighborhoods that may require additional insurance (such as flood insurance) can save you money.

You could also negotiate the repair of high-risk problems on a property you like -- such as an old roof or outdated electricity or plumbing -- to help lower your monthly cost. If negotiating these repairs with the seller isn't an option, consider addressing those problems after closing to help reduce insurance costs.

Homesteading a property can save you as much as 45% on your property taxes. If you're buying a home and using it as a primary residence, make sure you properly register it as a homestead to cash in on those savings.

Utilizing a combination of these strategies will enable you to save loads of money when purchasing your next home. Just remember to stay flexible in some of your criteria to make the most of your money and don't be afraid to shop around for the best possible deal.

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