Buying a new home is exciting, but can also be a little nerve-wracking. Homeownership is a long-term investment that can set you on the path towards financial security. Instead of paying rent to a landlord, your monthly payments are put directly towards your mortgage. Whether you are a first-time homebuyer or a seasoned homeowner these little tricks and steps can help you save.
- Be Smart About Homeowners Insurance
Don’t stick with the first quote given to you, you can shop homeowners insurance to make sure you’re receiving the best price possible. You may receive a discount if you use the same company as your car insurance or are over 55 years old. There are little improvements you can make to your house to be more appealing to the insurance companies. Depending on your location, adding safety measurements against natural disasters can help lower costs. Certain insurance companies will also lower insurance costs for adding a high-security alarm system or sprinklers in case of a fire.
- Pay Attention to Your Energy Bills
Energy bills are a monthly recurring expense, if you can reduce the cost just a little bit, the savings will accumulate over the long term. Use darker or thicker blinds on your windows to block the sunlight, which slowly heats up your house and makes the air conditioner work harder. Switch to LED lights, they put out less heat and use less energy. Install ceiling fans to keep the air moving, the rooms will feel cooler. Your bill will naturally be higher in the summer if air is running, and in the winter if the heater is on. Check your bill each month for any spikes or slow raises, it may be an indicator of a water or heating leak.
- Document Any Energy-saving Measures You Take
Did you install energy-efficient appliances or windows? Many states offer tax incentives and your utility company may even give you a rebate for energy efficient purchases. Interested in renewable energy? Installing solar panels or a solar hot water system won’t only save you money on your energy bills, but you can deduct 30 percent of the cost from your taxes.
- Maximize Tax Deductions
A qualified tax professional can save you more money as a homeowner. The upfront cost may seem intimidating, especially if you’ve always done your taxes yourself. Homeowners can make deductions such as mortgage interest, real estate taxes, home improvement (if a home equity loan was used), and points that you paid when purchasing your home.
- First Time Homeowner? Check for Incentives
There are federal, state, and even county assistance for first-time homeowners. You may be eligible for tax-credits and low or interest-free loans (up to a certain amount). Did you or your spouse serve? Check for a VA loan. Do you work as a teacher, law enforcement officer, or firefighter? Try the Good Neighbor Next Door program. Could your credit score use a little help? FHA will protect the lender in case you default.
Becoming a homeowner is a rewarding step for financial security. Unlike renting, there is more to being a homeowner than paying rent and utilities. Home mortgages can be for up to 40 years! If you’re going to pay for a house for 15, 30, or 40 years, the savings, no matter how small, really add up. The little ways you will save as a homeowner can make a difference in the long run.