Owning a home can be a significant expense for many new and experienced home buyers. There are many ways that homeowners can save money, including by refinancing their mortgage, canceling private mortgage insurance, keeping up-tp-date with your home insurance policy, taking advantage of the homestead tax exemption and maintaining their home regularly. Understanding each of these options can significantly decrease the cost of owning a home.
1. REGULAR MAINTENANCE
Proper maintenance of your home can save you money in several ways. For one, regular maintenance can prevent small problems from becoming larger and more expensive to fix. For example, if you regularly clean and maintain your gutters, you can prevent water damage to your roof and fascia boards.
Maintenance can also help your home operate more efficiently, which can save you money on your utility bills. For example, if you regularly clean and maintain your HVAC system, it will be able to heat and cool your home more efficiently, which can save you money on your energy bills.
In addition, properly maintaining your home can also help to maintain or increase its value. A well-maintained home is more likely to be attractive to potential buyers, which can make it easier to sell and potentially increase the sale price.
2. CANCELING PRIVATE MORTGATE INSURANCE (PMI)
Private mortgage insurance, or PMI, is a type of insurance that protects the lender in the event that the borrower defaults on their mortgage. Typically, PMI is required when a borrower makes a down payment of less than 20% of the purchase price of the home. If you have PMI and want to cancel it, there are a few steps you can take:
1. Call your lender to see if you are eligible to cancel PMI. Most lenders will allow you to cancel PMI once you have reached a certain point in your loan repayment, such as when you have paid down your loan to a certain percentage of the value of the home.
2. Check your credit score and financial situation to make sure you are in a good position to cancel PMI. Lenders may be more likely to cancel PMI if you have a good credit score and a history of making timely mortgage payments.
3. Contact your lender and ask to cancel PMI. You will need to provide proof that you are eligible to cancel PMI, such as evidence that you have reached the required point in your loan repayment or that your home has appreciated in value.
4. If your lender does not agree to cancel PMI, you may have the option to refinance your mortgage. This could allow you to obtain a new loan without the need to include PMI.
When interest rates begin to decrease, refinancing your home can be a great way to save money. These may include lowering your monthly mortgage payments, obtaining a lower interest rate, and potentially even reducing the overall amount of interest you will pay over the life of your loan. Additionally, refinancing can allow you to access equity that you have built up in your home, which can be useful for consolidating debt, making home improvements, or even funding a large purchase. Finally, refinancing can provide you with an opportunity to change the terms of your loan, such as the length of the loan or the type of mortgage, which may be beneficial depending on your individual circumstances.
4. HOME INSURANCE
1. Review your coverage regularly. As your circumstances change, your insurance needs may change as well. For example, if you make improvements to your home that increase its value, you may need to adjust your coverage to ensure it is adequate. Regularly reviewing your coverage can help you make sure you are not paying for more insurance than you need.
2. Bundle your home and auto insurance. Many insurers offer discounts for customers who have multiple policies with them, such as home and auto insurance. Bundling your policies can save you money on both types of coverage.
5. HOMESTEAD TAX EXEMPTION
The homestead tax exemption in Florida is a tax benefit that is available to homeowners who use their home as their primary residence. This exemption allows eligible homeowners to exempt a portion of the value of their home from property taxes. In Florida, the amount of the exemption varies depending on the value of the home and the school district in which it is located, but it can be as much as $50,000 off the assessed value. To qualify for the homestead tax exemption in Florida, homeowners must apply for the exemption with their county property appraiser’s office by March 1st of the year for which they are seeking the exemption.
Reducing expenses and increasing financial security is something everyone can get behind. By decreasing energy consumption, refinancing their mortgage, canceling PMI, taking advantage of the homestead tax exemption, and maintaining their home regularly, homeowners can save money and improve the value of their home.