15 Ways to Save Money on a Home Purchase as Mortgage Rates Climb

If you've been tracking mortgage rates, you may be aware that home loans have gotten a lot more expensive this year. And that's enough to dash any prospective buyer's dreams of owning a home. But fear not -- there are steps you can take to eke out savings on a home even as mortgage rates climb.

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The right real estate agent can negotiate with sellers on your behalf -- and potentially help you land a great deal on a home. That could offset the higher mortgage rate you might get stuck with.

ALSO READ: 4 Questions to Ask a Real Estate Agent Before Hiring One

If you look for a home in a popular neighborhood, you might get stuck paying a premium for it. But if you stick with a neighborhood under development, you might snag a lower purchase price on your home. Plus, your home's value might increase exponentially as that neighborhood is built up.

Given how expensive it is to buy a home and take out a mortgage today, now's not the time to load up on square footage if you can manage with less. Look at buying a smaller home to keep your purchase price down.

The downside of buying a townhouse is having to share at least one wall with a neighboring home and potentially having less private outdoor space. The upside, though, is that you might spend a lot less on a townhouse than on a detached home.

ALSO READ: 3 Reasons You Might Regret Buying a Townhouse

If you can afford to buy a home in cash, now's a good time to make that sort of offer. In doing so, you might snag a lower purchase price. Plus, you won't have to worry about spending more on mortgage interest.

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The more flexible you're willing to be when it comes to closing on a home, the more eager a seller might be to work with you. You might even snag a discounted purchase price in exchange for a flexible closing.

The higher your credit score at the time you're buying a home, the lower the interest rate is likely to be on your mortgage. That will, in turn, make your home less expensive to own.

ALSO READ: This One Move Has Made a Huge Difference In My Credit Score

Many people take out a 30-year mortgage because it results in lower monthly payments. But if you can swing the higher payments that come with a 15-year loan, you'll save yourself money on interest in the course of buying and paying off your home.

Each mortgage lender determines its own interest rate in the course of giving out loans. If you shop around, you might manage to eke out some savings on your mortgage's interest rate, making your home less expensive on the whole.

ALSO READ: 3 Kinds of Mortgage Lenders to Get Quotes From

Mortgage lenders routinely charge fees to finalize a home loan. If you avoid lenders whose closing costs are astronomical, you won't have to spend as much when buying a place of your own.

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Making a 20% down payment on a home can help you avoid private mortgage insurance on a conventional loan. And not having to deal with that monthly fee will make owning your home less burdensome.

ALSO READ: What Is Private Mortgage Insurance?

You may want a home that's loaded with upgraded features. But those are features you might overpay for right now. Instead, look at homes that are functional but not the most up-to-date. Chances are, you'll spend a lot less to buy one.

Buying a home in disarray carries some risk. But the benefit of purchasing a fixer-upper is that you might spend a lot less on that home's purchase price. And that way, you can renovate in a manner that suits your personal taste.

Purchasing a foreclosed home could be your ticket to snagging a lot of savings on your purchase price. But be careful if you're going this route. Homes that are foreclosed on tend not to be in the best of shape, so you'll have to make sure you can cover the cost of immediate repairs.

ALSO READ: What Happens to Your Credit Score if Your Home Goes Into Foreclosure?

Passing on a home inspection could save you a little money when buying a home. But it's a bad idea to forgo one. Identifying issues with a home you're looking to buy could spare you a world of costly repairs -- repairs that far exceed the modest fee an inspection will result in.

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Today's housing market is a tough one to crack, given where home prices and mortgage rates are sitting right now. But if you employ these tips, you might manage to squeeze out some savings in the course of buying a home.

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