Finding an affordable home can feel like a daunting task, especially with today’s high interest rates. But don’t worry—there are several strategies you can use to save money and make homeownership more accessible. Here are seven effective ways to find a more affordable home:
1. Seek Homes with Lower Property Taxes
Property taxes can vary significantly depending on the neighborhood. For example, in Portland, Oregon, different areas have different property tax rates. When searching for homes, you can set filters to focus on properties with lower annual taxes. For instance, if you’re considering a $500,000 home, aim for properties with taxes around $5,000 to $6,000 a year. This small adjustment in your search criteria can lead you to more budget-friendly options.
2. Avoid Homes with HOA Fees
Homeowners’ Associations (HOA) can add extra costs to your monthly expenses. If you’re in the market for a new home, you might find that many new developments come with HOA fees. To avoid these additional costs, search specifically for homes without HOA fees. If that’s not possible, look for properties with HOA fees of $50 a month or less. This approach can help keep your ongoing costs lower.
3. Negotiate for Homes on the Market for 30+ Days
Properties that have been on the market for over 30 days may offer more room for negotiation. Sellers might be more willing to lower the price or offer credits towards closing costs. Use this opportunity to negotiate not just on the purchase price, but also to request seller credits that can help offset closing costs or even secure a better interest rate.
4. Consider Properties with Potential for Conversion
Look for homes that have space you can convert into additional living areas. Unfinished basements, attics, or garages can be transformed into extra rooms or bathrooms. This potential for expansion can make a property more valuable in the long run, and it might be more affordable to buy and upgrade these spaces yourself than to purchase a fully renovated home.
5. Shop Around for the Best Mortgage Rate
Don’t settle for the first mortgage rate you’re offered. Interest rates can vary between lenders, so it’s worth shopping around. Local community banks and credit unions often provide competitive rates. By comparing offers and negotiating with lenders, you can find a rate that fits your budget better.
6. Utilize Employment Benefits
If you work in fields like healthcare or government, check if your employer offers any homebuyer benefits. For example, some employers or credit unions offer to waive loan fees for their employees. One recent buyer saved around $800 thanks to a fee waiver from OnPoint Credit Union for healthcare workers. Explore any benefits your employer might provide to save on loan costs.
7. Look for Cosmetic Fixers
Don’t be deterred by properties that need a bit of cosmetic work. Homes with outdated paint, damaged carpets, or minor cosmetic issues can often be purchased at a lower price. These are improvements you can handle after moving in, and they can add significant value to your home over time. With a little vision and effort, these cosmetic fixers can become great deals.
Bonus Tip: Improve Your Credit Score
A better credit score can lead to a better interest rate on your mortgage. Work on improving your credit score before you start house hunting. This can save you a considerable amount of money over the life of your loan.
By applying these strategies, you can find a more affordable home and make the most of the current market conditions. Happy house hunting!
If you have any questions about the real estate market, upcoming listings, or real estate in general, feel free to reach out to me by filling out and submitting the form below.
Disclaimer: The content in any of Shawn Yu (Shawn Realty) Youtube videos or this website shall not be construed as tax, legal, insurance, construction, engineering, health & safety, electrical, financial advice, or other & may be outdated or inaccurate. Shawn Yu/Shawn Realty is a licensed principal real estate broker/brokerage doing business in Oregon. To contact Shawn Realty for selling, buying investing in Oregon, please email shawn@shawn-realty.com or call 503-515-4499.
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