Housing is the highest living expense for most people, so this is an area where saving money can have a huge impact.
- Consider Renting – This is controversial advice for those who believe the “American Dream” is home ownership. In some areas it’s become the American Nightmare as resetting mortgage rates are forcing people to lose their homes. In some places, like my home near San Francisco there is a wide gap between rents and mortgages. Nationally its on the high side, but the average house purchase is probably 3 times the national average. Rents, on the other hand, are still quite manageable with the increased salaries. And, you have a lot more variety if you choose to move around every few years.
- When Buying a Home Shop for a Mortgage – I did this very successfully by going to Bankrate and finding an insanely good rate from a lender I had never heard before. (It helped that I had great credit.) The website they had didn’t inspire confidence – it was a design that looked like it was made in 1995 and it was missing some basic information on it. I had the lender write up a Good Faith Estimate and went to FleetBoston, now Bank of America, to match that rate. I got a great rate with a company I trust. I don’t think Bank of America does this match any more, but it can’t hurt to go into any negotiation with a great rate even if you don’t intend to take it. One great way to get a shop for a mortgage is to get a bunch of quotes easily over the web by visiting Lending Tree.
- Learn to Negotiate -Whether you are renting or buying, there is usually a step in the process where you need to haggle with another person to get the best rate.Â In the next few months, I hope to pick up a book or two on negotiating and build this highly valuable skill.
- Think diminutively – You might recognize that as a twist on the popular Apple slogan of “Think Differently.” This idea is to try to think of ways to live in a small space. I’ve written about why to think small. I’ve also written about how to live small.
You certainly have to get a little creative with housing. It’s not like you are going to find a coupon for $30,000 off a new home in the Sunday paper