How to Save Money as a Homeowner

The true American dream of home ownership comes at an eye-popping price, though it does not need to be a financial nightmare. You can always save money as a homeowner by lowering your utility bills, exploring tax breaks, looking into refinancing your mortgage, reducing your homeowners insurance premiums, or boosting your credit score.

Continue to read to find ways to cut the costs of homeownership.How to Save Money as a Homeowner

1. Lower Your Utility Bills

According to the U.S. Energy Information Administration in 2019 the typical electric bill in the U.S. totaled $115 a month. That adds up to a whopping $1,380 a year to keep the lights on. And that doesn't include other money-draining utilities. What can you do to trim your household's utility expenses? Here are a few things you can do:

  • Install LED Lights & Dimmer Switches. Upgrading your lights and switches involves an upfront cost, but it can save you money on electricity and doesn't have to be replaced quite as often as traditional lights. Dimmer switches can help to save money by cutting back on the amount of light used.
  • Install a Programmable Thermostat. A programmable thermostat can automatically adjust heating or cooling in your house to increase efficiency and chip away at energy costs. You can save as much as 10% a year on heating and cooling by turning your thermoses back by seven to ten degrees from a normal setting for eight hours a day.
  • Monitor Water Usage. You might try to decrease the setting on your water heater or wash your clothes in cold water to lower energy costs. Fix any leaky faucets so you aren't sending money down the drain.

2. Look into Tax Benefits

Owning a home can have tax benefits that some owners might ignore or might not even be aware of. One of them is the mortgage interest tax deduction. Usually, you can deduct the annual interest you pay on a mortgage if you itemize deductions on your federal tax return. Eligibility for the deduction depends on the dollar amount of your mortgage and when you bought your home. It is possible to claim a deduction. On your federal tax return for state and local property taxes paid on your home.

3. Consider Refinancing

Greg Smith of the Re/Max Collection had this to say about considering refinancing:

"Refinancing your mortgage involves getting a new loan to pay off your original mortgage loan. Doing so may let you reduce the interest rate on your mortgage or drop your monthly payment by stretching out the repayment period. You might also refinance to get rid of the requirement for mortgage insurance or to convert your adjustable-rate mortgage to a fixed-rate loan." 

If you have a good or excellent credit score, you can take advantage of historically low interest rates and refinance your mortgage, which can lead to lower monthly payments and thousands of dollars in savings over time. Keep in mind, that refinancing may come with thousands of dollars in fees, which might partially offset savings you can realize from a lower interest rate or lower monthly payments. If you choose low-interest refinancing, deal with a repayment period that is shorter than the one you have now, you may have higher monthly payments.

4. Lower Your Homeowners Insurance Costs

Homeowners might be able to save money from their home expenses by lowering their homeowner's insurance bill. How can you decrease your homeowner's insurance premium? Here are a few potential ways:

  • Shop Around. Compare up to at least three insurance quotes from companies, and you may be able to find another insurer that can cover you for less.
  • Raise the Deductible. If you bump up the deductible from $500 to $1,000, you might be able to cut your premium. The deductible is the amount of money you pay out of your pocket when your insurer approves a claim.
  • Bundle Policies from the Same Insurer. If you are purchasing homeowners insurance from the same company that insures your car, you can score a lower premium, insurers call this "bundling."

How Your Credit Score Can Help You to Save Money

A good credit score of 600+ can open several avenues for you. Whether you get ready to sign a mortgage agreement or you are considering a refinance, an improved credit score can help you secure a lower interest rate and save you a heap of money over the life of your loan. A good credit score can also enable you to gain favorable terms, such as a low interest rate, for a home equity loan or home equity line of credit. This can wind up being a cheaper method of borrowing money to pay for a home improvement project or another household need than putting purchases on a high-interest credit card.

The Bottom Line

Owning a home can be one of the greatest achievements of your life, but also one of the most expensive. However, you have many tools in your financial toolbox to trim the expenses associated with owning a home. Keep your financial house in order. Let the professionals at the Coastal Realty Group guide you in finding your dream home in the many wonderful neighborhoods on the Forgotten Coast of Florida today!