Homeownership is often accompanied by an onslaught of expenses. Not only do you have a mortgage to worry about, but you likely have expenses like homeowners insurance, mortgage insurance premium payments, utilities, repair costs, and more.
Fortunately, there are many steps that homeowners can take to reduce their housing costs and cut back on expenses, such as finding cheap homeowners insurance, refinance options, eliminating mortgage insurance payments, and working with the best homeowner warranty companies. Here’s a closer look at eight of the best ways to cut costs as a homeowner.
Homeowners insurance is a common must-have among homeowners. In fact, many mortgages require you to maintain an adequate homeowners insurance plan. But these insurance plans are not one-size fits all and costs and coverage options can vary widely between insurers.
Finding cheap homeowners insurance that provides the coverage you need is one of the easiest ways for homeowners to cut down on their housing expenses. In addition to shopping around for the best rates, there are several ways you can reduce your insurance payments, including:
Raising Your Deductible: Similar to car insurance, you must pay a deductible in the event of a homeowners insurance claim. Your deductible is the amount you must pay before your insurer will begin to foot the bill. Raising the amount of your deductible can reduce your monthly homeowners insurance payments and help you save money.
Avoid Filing Small Claims: If you’re interested in cheap homeowners insurance, avoid filing small claims. Each time you file a claim, your insurance premiums may increase. Instead, save your claims for larger repairs, disasters, and expenses.
Increase Your Home’s Security: The best homeowners insurance companies commonly provide discounts for security devices, including burglar alarms, smoke detectors, and other safety features.
Bundle Home and Auto Insurance: Most cheap homeowners insurance plans are provided by insurers who also deal in auto insurance. Many of these insurance agencies will provide you with additional discounts when you bundle your home and auto insurance.
Avoid High-Risk Items: Did you know that you’ll pay more for high-risk items like playground equipment, swimming pools, and trampolines? That’s because these items have an increased risk of injury and a greater likelihood that you’ll eventually file an insurance claim.
Ask About Discounts: Many of the best homeowners insurance providers offer lesser-known discounts to homeowners who work in specific professions, choose paperless billing, or automatic payment options. Ask your insurer about any available discounts that you may qualify for to start saving.
Did you know you may be able to forgo homeowners insurance entirely with a home reappraisal? The average cost of homeowners insurance varies by location, coverage details, coverage amounts, deductibles, a home’s value, and so on. While there are many steps you can take to lower your payments below the average homeowners insurance costs, you may be eligible to forgo insurance requirements entirely.
Some mortgage lenders require you to maintain your homeowners insurance throughout the life of your loan. However, other lenders require you to carry coverage until you’ve paid a specific amount of your principal balance. If you’re already close to that amount, consider a home reappraisal. The value of a home can change substantially over time and those values could negate the need to carry homeowners insurance altogether.
Refinancing a home is a great way for homeowners to reduce their mortgage payments, interest, and other significant loan terms. But there are many types of refinance options available. The best refinance with cash out options can convert a portion of your home’s equity into money that you can use elsewhere in conjunction with refinancing a loan. That money can then be used towards your other household expenses, such as:
Making your home more energy-efficient to reduce monthly utility bills
Costly repairs or maintenance tasks, such as roof replacement or foundation repairs
Towards upcoming mortgage payments
Towards the cost of furthering your education to raise your monthly income
When calculating cash out refinance options, it’s important to look at multiple lenders and loan programs that you may qualify for. This includes government-secured loan programs, such as FHA cash out refinance loans. These loans are commonly easier to qualify for because the Federal Housing Administration guarantees a portion of your loan, reducing the risk to FHA cash out refinance lenders.
Most homeowners obtain a mortgage when they purchase a home. In most cases, lenders will require borrowers to pay mortgage insurance premiums to protect their investment. However, insurance premiums are not required in special cases, such as when:
- Using a VA home loan
- Providing a high enough down payment to forgo mortgage insurance premium payments
In most cases, homeowners can remove their mortgage insurance requirements after they have paid down at least 20 percent of the principal balance of their homes. However, this process is not always automatically applied, and homeowners may be eligible to remove the insurance ahead of schedule if they have made extra payments over the course of the mortgage.
If you are currently paying for mortgage insurance, be sure to contact your lender to learn when you can request the removal of your PMI and how you may do so. While some lenders allow borrowers to request the removal of mortgage insurance online, many require you to provide your lender with the request in writing.
Home warranty plans can help protect you from costly repairs to your home. In most cases, warranties are optional, but they can be incredibly beneficial and help you cut down on housing expenses in the long run. The best homeowner warranty companies offer a variety of warranty packages that cover the cost of repairs to your home.
Some insurers even provide options to insure items inside of your home, such as appliances or heating and cooling units. Should an unexpected expense come up, you can file a claim with your warranty provider to reduce your out-of-pocket expenses.