While many first-time home buyers assume that buying a house is a straight-forward process, the reality is there’s a long list of expenses associated with it. And if you’re working with a limited budget, you have to be extra cautious. Want more articles like this? Create an account today to get BiggerPocket's best blog articles delivered to your inbox Sign up for free 5 Strategic Ways to Save Money Your home is probably the most expensive possession you’ll ever own. Most people are aware of this, but few first-time buyers are familiar with the additional costs and ongoing expenses that come with purchasing a house. If you want to save money and make home buying less expensive, there are some simple yet strategic actions you can take. 1. Buy Near an Up-And-Coming Area One of the best investment decisions is buying near, but not in, a hot neighborhood. Sometimes it’s just not practical or affordable to buy in the hottest communities, but looking nearby might be the best move. You can often save 20-30 percent on the purchase price. And most importantly, you’ll see faster appreciation rates. To save even more money, consider purchasing a house near a hot neighborhood that also needs a little bit of work. You can then update and renovate a little bit at a time. This saves you money up front and allows you to control your costs. Related: The Key to Saving Money in Real Estate: Property Maintenance 2. Avoid Standard Commission Real estate agents do a lot to help their clients find the perfect house, negotiate a fair price, and walk through the legal aspects of closing. In return, they generally receive a 3 percent commission ($9,000 on a $300,000 house). There are, however, ways to save in this area. One unique option is to use a service like SimpleShowing, which actually refunds the buyer 1.5 percent of the purchase price at closing. Depending on how much house you’re buying, this can result in huge savings. 3. Negotiate Closing Costs If you aren’t careful, closing costs are where you’ll get hit. Zillow estimates that closing costs will run the average buyer somewhere between 2 and 5 percent of the home purchase price. On a $200,000 home, that’s $4,000 to $10,000. Closing costs include things like lender fees, appraisals, title fees, attorney fees, escrow fees, interest, termite inspections, radon testing, etc. What most buyers don’t know is that they can negotiate many of these costs. In doing so, you may be able to save a couple thousand dollars right away. 4. Eliminate PMI If you borrow more than 80 percent on a home, you'll almost always be required to pay private mortgage insurance (PMI). This will typically cost you 0.5 â 1 percent of the total loan amount (per year). If you can avoid paying it, you should. “A down payment of 20 percent is the most obvious way to avoid paying for PMI,” personal finance expert Steve Gillman writes. “If this is tough with the homes you’re considering, Realtor.com suggests simply shopping for lower-priced homes for which you can make a 20 percent down payment. Multiply the down payment you have by five to arrive at the highest price you can pay while avoiding PMI.” Related: 3 Smart Ways to Make an Extra $1,000 a Month Through Real Estate Investing 5. Shop Around for Home Insurance Just as you can with any other type of insurance – such as life or auto – you can shop around and compare prices for home insurance. While every home-insurance product is different, you may be surprised to learn just how much discrepancy there is in price. Just make sure you’re getting enough to protect your investment. Don’t Be House Poor Just because you can buy a house, doesn’t mean you should. Furthermore, just because you qualify for a large loan, doesn't mean you have to spend up to the loan limit. It’s one thing to own a nice house. It’s totally different to own a home and be financially comfortable in it. Spend what you can and do your best to avoid being house poor. You’ll experience much greater satisfaction and peace of mind. What tips do you have for saving money on a home purchase? Share them with us below!