Setting financial goals is a crucial part of maintaining a healthy relationship with money. For a homeowner, this is especially evident. Owning a home is a huge, important investment, and all homeowners should be aware of the smart financial money moves they should be making.
Without realizing it, your home could play an important role in achieving your financial goals. The following tips can help you make smart money moves when it comes to your home!
Focus on the loan principal
When you make a payment on a mortgage loan, you are paying both principal and interest. By making an extra payment, you have the ability to shave around seven years off of a 30-year mortgage.
When making the extra payment, be sure to specify that you are intending on putting money toward the loan principal. This is especially important to do when nearing retirement since eliminating the largest monthly bill will lessen the financial stress when receiving a fixed income.
Consider refinancing your mortgage terms
Mortgages are available in different terms – including 10, 15, and 30-year loans. Refinancing can possibly lower your interest rate on the overall loan. If interest rates were significantly lower when you originally obtained your mortgage, you may not see a great difference in interest payments; if the interest rate is lower today, your interest payment may be much lower than before.
Be aware that while refinancing may save you money in interest since you are compressing your mortgage into a shorter term, you will likely have a higher monthly principal payment. You will save money in the long run but will be paying more on a monthly basis.
Compare insurance rates
You can generally find savings if you bundle insurance together, such as homeowners insurance and auto insurance. Depending on your provider, you can bundle all of your insurance needs with one company and receive a discount. Raising the amount of your deductible can also save you around 25% on insurance premiums.
Some insurance companies also provide discounts for home improvements, including security systems and changes made to protect against natural disasters. Shopping around yearly for homeowners insurance can ensure that you are receiving the best deal for the current state of your home.
Review your property tax assessment
Property taxes are determined by county assessors. Since market values are constantly changing, property taxes increase and decrease from time to time. This means that your home’s value may be higher or lower than the county’s current assessment.
If you believe your home is not worth what the county has previously assessed it for, and feel you are paying too much in property tax, you can challenge your taxes with local grievance firms.
Check out what homes in your neighborhood are being sold for so you can get an idea of the tax rates in your area. Property values are available to the public and can be found online. Once you have decided to challenge the property tax assessment, contact a local grievance firm to assist in your tax challenge.
Invest in remodeling your home
It is no secret that remodeling has the ability to increase the value of your home. Not only can you create an environment that is personalized to your taste, but updated renovations also create a higher value property.
Remodeling a home does not come cheap, so be sure to renovate areas that will provide the greatest return on investment. Explore funding options, including but not limited to home equity loans and personal loans. Depending on what you need, many funding options are available and can be compared with the help of a reliable lender.
Consider investing in an income property
In today’s era, rental properties and Airbnb’s are quite common for both renters and landlords. The possibility of creating an extra income through a rental property can become a reality in 2019. With solid credit scores, low debt, and consistent income, purchasing a second property to generate additional cash flow is a great way to increase financial security.
Low market rates make taking out a second mortgage possible for many people. You can generally find better deals on properties during the off-season when they are not in demand and are lower in cost.
Formulating a better financial game plan for 2019 can help you achieve your money goals. Creating targets and tracking progress is key to becoming successful, and your home can be used as an important tool in building financial wealth. Follow these tips to utilize your homeownership to your advantage.