Aside from cutting back your electric and water use, there are other convenient ways to lower your monthly home expenses. You could be saving as much as thousands a year on some of your larger home expenses. Discover how you may save hundreds of dollars without spending much time!
REFINANCE
Refinancing can allow you to secure a lower interest rate on your home loan. In most circumstances, refinancing lowers your monthly payments as well as decreasing the amount of interest you repay. This allows you the option to invest the saved money wisely, possibly paying off your mortgage faster. Either way you cut it, refinancing can be a valuable option for many homeowners.
For example, if you bought your home at a 3.5% interest rate on a $300,000 mortgage, you would end up paying the mortgage company not only the $300,000 you borrowed also an additional $184,968 over a 30-year period. If you refinance your home and now have a 2.5% interest rate on a $300,000 mortgage, you will instead pay $126,731 in interest over a 30-year period, saving you $58,237 at the end of your repayment period.
Example of Refinancing
BEFORE
Mortgage: $300,000
Interest Rate: 3.5%
Interest Payment (over 30 years): $184,968
AFTER
Mortgage: $300,000
Interest Rate: 2.5%
Interest Payment (over 30 years): $126,731
Refinance Savings of $58,237
MORTGAGE INSURANCE
If you don’t put a 20% down payment at closing, you are required to have a Private Mortgage Insurance (PMI) until you have at least 20% equity in the property. If you are paying PMI, talk with your mortgage company about their requirements for having it removed, if it’s even possible with your loan type. If it is possible, it may require that you pay down your mortgage by 20% of the original loan value, or you can get a new appraisal to determine that you currently have 20% equity. Doing one of these things often will remove the PMI from your mortgage.
REASSESS YOUR HOME INSURANCE
It’s always a good idea to assess your homeowners insurance annually. If you’ve made any significant improvements to your property, purchased expensive belongings (personal property), or had a significant increase in your home value, you may need to increase your coverage. But if you don’t need to increase your coverage, you might discover a deductible that better fits your needs while saving you money on your premium.
HOMESTEAD
Though homeowners cannot be exempt from paying property taxes, they can apply for a Homestead Exemption in Florida if they live in the property as a primary residence. If approved, homestead state laws prevent the homeowner from having large increases to their valuation and property taxes. Homestead deduction also provides a $50,000 reduction from your home’s value before taxes are calculated. This means over the years, thousands can be saved depending on the fluctuation of property taxes.
PREVENTIVE MAINTENANCE
Maintaining areas of your home not only can prevent you from having to make a costly repair later, but can reduce your monthly bills.
Here is a list of maintenance that can save you a surprise bill later:
- Change your AC filters every month
- Be sure you have adequate attic insulation
- Monitor your weather-stripping around windows and doors
- Seal any exterior cracks in your home’s siding
These small measures can keep your AC from having to work harder or prevent other foreseeable damages. Which means a lower monthly bill and more years on your unit’s lifetime.
Not sure where to start? Talk to one of our experienced agents to help you navigate what options are available to you.
