Owning a home is a costly endeavor in the United States and Canada. Your financial obligations don’t end with a closed deal and monthly mortgage payments. You still have bills to pay and other obligations apart from what you are already shouldering. Whether or not it’s your first time as a homeowner, it helps a lot to know how you can reduce your monthly payables. After all, financial futures remain uncertain, so it’s important to save as much cash as a hedge against inflation and economic disruptions. Here are a few tips to help you reduce your homeownership costs:
1. Choose a community carefully
Your financial future will depend mostly on your choices, especially when it comes to settling down in a community that fits your needs. For this, you should take the time to research the cities or towns you are moving into. This should involve looking at affordability indicators as well as average property taxes. Talk to a realtor or a financial consultant if you are looking to live somewhere that fits your financial requirements.
2. Shop for the best mortgage rates
Whether you like it or not, your mortgage obligations will account for the bulk of your homeownership expenses. For this reason, you will need to make sure that you end up with mortgage terms that won’t overburden you from the get-go. The best way you can go about this is to get pre-qualified and determine the best repayment terms.
You may have to work closely with a mortgage broker in the community you are moving into. If you are looking to live within and around Essex County in Ontario, you can look towards companies such as Axiom Mortgage Solutions for help in identifying a mortgage scenario that works best with your needs.
3. Qualify for property tax relief
Apart from looking for a location that’s affordable and with lower property taxes, you should know if you are qualified for a tax relief program. There are areas where you can apply for a reduction to your property tax payables, especially if these areas are looking to attract investors and invest in local development.
In New York State, for instance, homeowners who earn less than $250,000 annually can apply for property tax relief under the Circuit Breaker Tax Credit plan. Through this, you can claim income tax credits that range from $250 to $350 starting 2022 when you file your returns. Not all states have such a program, so it’s best that you refer to your local tax comptroller and see if there are any similar programs you can take advantage of.
4. Consider a mortgage refinance
In the face of higher interest rates, you can choose to refinance your home and reduce your monthly payments. Through a refinance, you could lower the interest you pay by at least two percent. You just need to make sure you have a healthy credit record and enough equity to take out a mortgage refinance. You should be able to pay your bills on time and make improvements that will raise the value of your property so lenders can approve better terms.
5. Do repairs and home improvement projects yourself
Over time, your home requires an increasing need for aesthetic and structural repairs. Home maintenance is part of your responsibility as a homeowner, but it can cost a lot to hire contractors for issues or projects you can do yourself. Unless you are planning for an extensive remodel of your property, you should be better off handling minor home maintenance on your own. There are tutorials and guides you can follow online, so take time to learn as much as you can about DIY maintenance so you won’t have to pay extra for labor.
6. Keep your water and energy bills in check
How much do you pay for utilities such as electricity and water? According to EnergyStar.gov, American households spend an average of $2,060 on utilities each year. If you think you are paying more than that, then it’s time that you make important changes to the way you consume energy and water.
First off, consider replacing older appliances with newer ones. Washing machines and refrigerators that have been around for more than ten years consume more energy, so you might want to invest in newer, more energy-efficient models. If you want to lower your monthly water bill, you might want to inspect your pipes for leaks, replace showerheads with low-flow ones, and observe water conservation practices.
In finding out optimal savings for utilities, you should be able to track your bills and figure out which appliances are using the most power and water. From there, you can reduce your expenses to the bare average, or even lower than that.
7. Get better home insurance premiums
Home insurance also eats into the bulk of your homeownership budget, so it might be best to get premiums that are manageable. In case you live in an area that’s vulnerable to crime and natural disasters and that you are covered by a government plan, you can opt for lower premiums through a private insurer. Just be sure to review your coverage and opt-out of features or components you don’t need. However, if you are covered by a single insurer for more than 10 years, it’s best to stay with that insurer so you can get special loyalty discounts.
8. Stick to a lifestyle you can manage
This might seem like an obvious way to pay less in bills and save more for the future, but altering your lifestyle choices is still the best way to reduce your expenses. Living within your means is the best advice you need to hear at this point, so be practical with your budget so you won’t have to worry over other financial obligations.
Buying a home is anyone’s dream, but you have to work extra hard and be disciplined and resourceful in order to keep it. With these tips in mind, you can remain in this dream for the long haul!