Eight game-changing moves to reduce your monthly housing costs
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Housing costs eating too much of your monthly budget – You are not alone. Most families find that mortgage or rent payments are a large part of their income. This makes it difficult to save money for other goals. The good news is? These high costs are not inevitable. Here are eight ways you can lower your mortgage payments and put more money in your pocket every month.
1. Strategic Refinancing – When it Makes Sense
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Look for interest rates at least one percentage point below your current rate. This is usually the threshold where savings outweigh closing costs. Don’t ignore specialized programs such as FHA Streamline Refinancing. They often require less paperwork and are approved with even limited equity. Ask your lender to “recast” your mortgage if you have recently received a windfall or made a significant payment towards your principal. They will recalculate the payments on the lower balance, without having to go through the hassle of refinancing. House Hacking: Make Your Home Pay for Itself
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The spare room could be worth a lot of money. Even a single bedroom rental can reduce the monthly mortgage payment by 20-30%. The initial costs to create a proper apartment could be thousands of dollars. However, the rental income you receive can change your housing finances over the years. In many urban areas, these units rent quickly and reliably.
Short-term rentals through platforms like Airbnb can be even more lucrative in the right location, though they require more active management. Renting out your house during local events or tourist seasons can cover the mortgage payment for several months. Energy Efficiency: Small changes, big savings
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Start with the simplest change that will yield immediate results: switching to LED bulbs throughout your home can reduce lighting costs by 75% and last years longer than traditional ones. A programmable thermostat can also help you save money without sacrificing comfort. It will automatically reduce heating and cooling when you are asleep or away. Many utility companies even offer these devices at a discount or provide rebates.
Drafty windows and doors are letting your money escape. Installing inexpensive weatherstripping or door sweeps in a single afternoon can make a significant difference to your energy bills and comfort, especially for older homes. Professionals can help you identify which efficiency upgrades will yield the best return for your home. Property Tax Relief: Do not overpay
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Many homeowners are unaware that they are paying excessive property taxes due to incorrect assessments. Look at your current tax assessment. Does it accurately reflect the value and features of your home? It is surprising how often there are errors in the assessment of your home’s square footage, number of rooms, or condition. You may be able to appeal if your assessment seems much higher. You may need to submit a formal request and provide evidence in support of your claim. The process can vary by location. Many areas offer homestead exemptions that can reduce your taxable values. Senior citizens, veterans, and people with disabilities often qualify for additional breaks, but you typically need to apply for these benefits – they’re rarely applied automatically.
5. DIY Home Maintenance: Simple skills that save
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Even if you master a few simple skills, it can save you from expensive service calls. Start with the basics of plumbing. You can save $100-200 on each service call by learning to unclog toilets, fix drains and replace faucet washers. Many hardware stores offer free weekend workshops to teach these skills, and countless clear tutorials are available online.
Simple electrical tasks like replacing outlets, switches, and light fixtures are well within most homeowners’ capabilities (just remember to turn off the circuit breaker first!). It’s important to know when you need professional help. Electrical, gas and structural problems are often beyond the scope of your abilities. Create a maintenance calendar to ensure that important tasks are not overlooked. Even one hour of maintenance per month can save you thousands over the course of time. Insurance Savings: More Than Just Shopping Around
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This is a mistake that could cost you hundreds of dollars each year. That’s a mistake that could be costing you hundreds each year.
Bundling policies with one company typically saves 10-25%, bringing your auto, home, and other insurance together almost always results in lower overall costs. A quick call to your current providers can reveal immediate savings opportunities.
Raising your deductible can substantially lower your premium. Consider increasing your deductible from $500 to $1000 or $2500 if you have an emergency fund. Many insurers offer discounts that you may not be aware of. You may qualify for a discount if you have a home security system, smoke detectors or water leak sensors. You might be surprised by what you qualify for.
7. Right-Sizing: The Right Home For Right Now
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As life changes, so do housing needs. Many empty nesters discover that they are heating, cooling and maintaining rooms which are rarely used. You may need to adjust your housing according to the stage of life you are in. Moving to a smaller house or to one that is in a less expensive location can save you money on your mortgage, rent, property taxes, utilities and maintenance. Downsizing can save you 30-40% in total housing costs. Could formal dining rooms that are rarely used be transformed into more functional spaces. Can adult children who live at home help with housing costs?
8. Assistance Programs: Help That Goes Unclaimed
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These programs are not just for those in dire financial straits. Many of them serve working families, first-time homebuyers, and those experiencing temporary setbacks. These aren’t just programs for those in dire financial straits, many serve working families, first-time homebuyers, and those experiencing temporary setbacks.
Local utility companies frequently offer weatherization assistance, providing free energy efficiency improvements to qualified households. Many middle-income households qualify for these programs, which have generous income restrictions. These services are free and can be used to negotiate with lenders or identify assistance programs. Many homeowners who thought foreclosure was inevitable have found sustainable solutions through these resources.
Form an Action Plan
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Start by identifying the one or two approaches that are most relevant to your situation and take action this week. Start by identifying the one or two approaches most relevant to your situation and take action this week.
Consider which strategy would be easiest to implement first – perhaps checking for property tax exemptions you might qualify for or shopping for bundled insurance quotes. Early wins will motivate you to tackle more complex money-saving moves.
