Home ownership is a great experience. Getting to like at a piece of land with a house on it and realize that it’s truly yours is satisfying. The safety you can feel in your own home is wonderful. The downside to home ownership is the cost. Housing prices continue to rise. Mortgages are designed to make the banks money.
Since owning a home is expensive, it helps when you can save some money. There are plenty of ways in which you can save money on your home. Many of them involve using the home itself to save you money! This can help when it’s time to pay property taxes, homeowners insurance and all the maintenance costs that are needed to keep your home in good repair. So if you have a home, see if some of these savings tips apply to you!
1 – Refinance Your Mortgage
Refinancing a mortgage is a simple, yet effective way to save potentially tens of thousands of dollars. The most common reason to refinance your mortgage is to move from a variable rate to a fixed rate mortgage to take advantage of low interest rates. This can save many thousands of dollars over the payment period of the mortgage. Typically, there are additional fees for refinancing. To save money, interest rates need to be refinanced at about 1% less than the current mortgage is ranked at. Anything beyond that will result in large savings.
2 – Take Advantage of Home Equity
As you pay down your mortgage, you gain equity in it. For example, If your home cost $500,000 and you still have to pay $375,000, then you have $125,000 in equity on the home. This equity can be used in different ways. There’s two ways to take advantage of this equity. The first is a home equity loan. It basically works as a second mortgage where you will get a lump sum up to your equity limit. From there, you will pay it back monthly. The second option is an equity line of credit. In this case, you can access the equity of your home whenever you want to. You may be wondering how taking out more loans can help you save money. Home equity loans and lines of credit often work on very low interest rates due to the safety of home equity as collateral. This means that you can pay off high interest debt and save hundreds or thousands in interest over the course of a year.
3 – Improve Before You Sell
If you’re considering selling your home, you should first look into home improvements that can give your home a huge value bump. In many cases, some cosmetic fixes can increase a house value by 300% of the cost of the fixes in the first place. Planting a well manicured garden, some fresh coats of paint and maybe redesigning a bathroom to be modern and beautiful are well known improvements. Research and talk to your real estate agent however. Not all improvements provide a large boost to the value of the home. The goal here is to gain some extra cash through your investment. It’s a true case of the adage “You have to spend money to make money”.
4 – Energy Efficiency
The last tip suggested that you improve your home before you are going to sell your home. This tip is about improving your home so that it will save you money over the long term. Depending on where you live, your heating or cooling bill can likely be reduced quite a bit. Weather stripping around windows helps. If you have the money, replacing them with energy efficient windows straight away makes a huge difference. Energy efficient appliances can also save money over the long term.
5 – Make Your Own Repairs
If you are someone who has some talent with your hands, making your own repairs or renovations can be both rewarding and incredibly money saving. If you have no talent for repairs, now’s the chance to learn. There has never been more information available to do it yourselfers! A quick trip to YouTube will provide you with step by step videos for almost any project that is possible. In addition, large hardware stores like Lowe’s will offer classes for beginners on any number of subjects. Learning some do it yourself skills will save you thousands on your home maintenance!