Moving home is a big moment. A big moment that could take months, or even years. There’s the money, there’s the packing, there’s the renovating. It’s all a lot. And to add to the stress, it’s an expensive thing to go through. It’s easy to see why you would want to find places to save money wherever you can. If you are having trouble making ends meet, or would just rather find some places to save, take a look at our guide to keeping the numbers low while moving.
Boost your mortgage borrowing power
Already we’re off to a bad start because this is all about building up the numbers. If you do the right moves, you might find your mortgage loan grows, allowing you to buy a more valuable home. We all wish we were wealthy enough to buy the home we want, but sometimes we need a little help. Tally’s article covers how to become wealthy, offering you a path to a more comfortable way of life, but until that happens, we have some tips to help you get a bigger mortgage.
For one thing, gather any and all sources of income you can find. It might not have occurred to you the different sources of income you can present to your lender, and it will go a long way to convincing them that you can afford a bigger loan.
So, pull out everything. Income from investments, profits from rental properties, alimony, child support, social security, profits from a side business or part time job, all of it. Although, the latter two come with the asterisk that you have to have been earning from them regularly for the past two years.
You can also boost your loan by getting rid of any debt you have. A lender is going to look at your debt-to-income (or DTI) ratio first, which is the minimum amount you are putting away to cover your debt. Typically, if you have less than 36% a lender will feel comfortable giving you a loan, however some are known to go higher. But what would be best, would be to entirely wipe the debt if possible. It’s a win-win of no longer dealing with the monthly repayments and being offered a bigger mortgage. If you have the cash from assets or investments, that would be ideal, but the world isn’t that kind to all of us, so you can look into a balance transfer card or refinancing an auto loan.
Also, paying more than 20% on your down payment will allow you to forgo the Private Mortgage Insurance that will be folded into your monthly repayments. And remember, the more you pay up front the less you will have to pay monthly.
Redo your budget
No doubt, through the whole process of buying or finding somewhere new to rent, you will have looked at what you are spending and asked yourself what you can afford. Now that you know what you can afford and you have it, it’s time to re-evaluate that budget.
You should do this after, perhaps a couple of months in, because at that point you will have a good idea of what your utilities will cost and from there you can build your new budget. You can fold your new home mortgage or rent rates into the budget and evaluate what you are spending on your monthly bills.
Next, head online and visit some comparison websites. You don’t want to miss out on a better deal just because you didn’t ask, so run everything through a comparison website: your insurance, your utilities, etc.
Rethink your subscriptions and direct debits. Has your lifestyle changed, affecting something you no longer use in your new home? Is your original gym too far away? Compare your written budget with what is coming out of your bank account in terms of food, fuel, and luxuries. Is there anything you can cut back on?
Consider paying annually for any policies or subscriptions you have. A lot of annual payments turn out to cost less, because paying little by little is more convenient to customers. If you don’t like the idea of paying annually, the middle ground available is to put what you would be paying in a savings account and don’t touch it until it’s time to pay, but that would take an impressive amount of self-control.
Reuse, recycle, renovate
If the appeal of your home was that she was a bit of a fixer-upper, you’re going to want to save where you can. Even if the place was immaculate, chances are you’ll want to make it yours, and so you’ll need to learn some DIY skills.
And that is the key here. Where you can, do it yourself. The other side of a tradesman’s professional finish is that it will cost you, so if that is your deciding factor, do what you can with what you’ve got.
Luckily, between TikTok and YouTube tutorials, you will already have half the tools you need to renovate your home, cutting out half the cost. We can all paint a wall, after all. You’ve already made a drastic change with that alone. But don’t think too much about your own skillset. You won’t be good at it if you don’t try for one thing, but also, you’re capable of more than you are aware of. You know how to screw and hammer; therefore, you know how to fix pieces together. You’re already on your way to a shelf. From there you could get an entire bookshelf.
The real big spender comes when you are buying your materials. Take a look at the sale aisle of your local hardware store to get the best deals if you are flexible on what you’re looking for. Reuse where you can, using leftover cabinets and wood wherever possible. Visit salvage yards and buy/sell/trade websites for cheap materials.
If you find yourself needing furniture, don’t get in the car to Ikea just yet. They might be cheaper than the rest, but the quality really reflects that. Instead, head to your biggest furniture charity warehouse. Buy pre-owned furniture and simply show them some love to get them good as new. Older furniture, not from Ikea, will last longer and be far more sturdy, and are usually discarded simply due to a change in tastes. But if you appreciate solid wood, vintage styles, or simply something you can renovate yourself, you can buy furniture for pennies.
A simple update to any piece of furniture would be a quick sanding and a varnish, taking early millennium beech wood to a deep mahogany, for example. But there are a lot of things you can do with your furniture to keep it up to date. The trend nowadays is to make it stand out, and give it a little bit of personality, turning something you store your items in into a statement piece in the room. You can paint your furniture whatever color you wish and give it a bit of detailing or wax for a rustic look.
And remember that your home doesn’t need to look like a showroom within a week. Take your time, and buy when you can, changing when you can.