Homeownership is a key milestone in the American dream that comes with many benefits, from financial security to civic participation. However, it’s important to consider whether or not buying a home lines up with your specific needs and goals.
If you’re considering homeownership, it’s important to keep these tips on hand to save money and reach your mortgage goals. Investing in a home warranty is always suggested as it can help you save thousands of dollars on home repairs. Other tips are as follows:
1. Pay Off Your Mortgage as Soon As Possible
One of the best ways to save money as a homeowner is by paying off your mortgage early. This could save thousands in interest and eliminate your monthly housing payment. You can reach your goal by making extra payments, refinancing to a shorter term or even applying cash windfalls to your balance.
However, before you start throwing all your extra money at your mortgage, consider how it might affect your other financial goals. For example, you may be able to save more for retirement, pay off other debt or boost your emergency savings by reducing unnecessary expenses like dining out or over-buying home decor items.
Also, before you decide to make a lump-sum payment to your mortgage, be sure to ask your lender what fees you might incur for paying it off ahead of schedule. These fees can include processing charges and a fee to send a discharge letter to the county records office that releases your property deed.
2. Keep a Close Eye on Your Home
As you make your way through the home buying process, it is important to keep in mind that owning a home is more than just a place to live. Homeownership also provides a sense of security and stability that renting just can’t match.
Homeowners tend to be more engaged civically, too. They vote more often, know more of their neighbors and volunteer more than renters do. Plus, homeowners have a tendency to stay in their communities four times longer than renters do.
But, with homeownership comes a lot of responsibility. You must remember that your mortgage payment, property taxes and homeowner’s insurance are all things you need to keep up with each month. Moreover, home maintenance and repairs are your responsibility, too. It’s not just a matter of calling Bob Vila when the air conditioner goes out, but also of mowing the lawn, fixing leaky pipes and replacing the furnace. This is why it’s so important to have money saved beyond your monthly mortgage payments, in case something unexpected happens.
3. Don’t Forget About Maintenance
Homeownership is a huge commitment and comes with many responsibilities. You must pay taxes, keep up with maintenance and insurance, prepare for emergencies, and more. However, there are benefits to homeownership that can make it worth the effort.
For one, homeowners tend to live in their homes longer than renters. This creates a
sense of stability and permanence that can provide security and comfort for families. Furthermore, homeowners can complete renovations that increase property value and customize the space to their needs. In addition, homeowners have the option to work from home if their job requires it, which can save on commuting costs and boost productivity.
To cut down on the cost of maintenance, homeowners can watch for hardware store sales and buy items like dishwasher filters or paint at reduced prices when they are discontinued or marked as “oops.” Homeowners should also keep their eyes peeled
for opportunities to save money on home improvement projects by purchasing repurposed materials or by working with contractors that offer cash back deals on certain products or services.
4. Don’t Forget About Taxes
As many homeowners will tell you, owning a home is more than just buying a place to live. It also comes with a number of other expenses including mortgage payments, property taxes and maintenance. Fortunately, the IRS offers a number of tax breaks for homeowners which can help ease some of those financial burdens.
These tax breaks range from deductions for mortgage interest to credits for energy efficient home improvements. Taking advantage of these tax breaks can save you thousands of dollars at tax time. However, it is important to remember that filing your taxes as a homeowner can be more complicated than simply plugging in your W-2 and taking the standard deduction.
Owning a home is an important milestone for many Americans. But trading in a lease for a deed doesn’t come cheap. That’s why it is important to keep these tips on hand to save money during the home ownership journey. And as always, be sure to consult a tax professional with any questions or concerns.