Home Buyer’s Survival Guide
The real estate market is recovering, but stability is still not certain. Currently, it is the seller that has the upper hand. But that doesn’t mean that the buyer can’t have his way. By exhibiting some prudence, you can easily save some substantial money while acquiring new property or remodeling your home. Here are some tips:
Go for a Shorter Mortgage
Before the housing bubble burst, it was sort of a norm to pre-pay your mortgage so that you got out of debt. And so people religiously paid off their mortgages early to save thousands of dollars in interest payments, usually by doing things like adding in a 13th payment in a calendar year or doubling the principal payment.
But changes in spending and living habits necessitate new strategies, such as going for shorter mortgage terms. Specifically, mortgage rates have dropped, so the old method doesn’t make sense for people who have debt with higher interest rates. So if you are fortunate to have only a mortgage, along with money for extra payments, try to shorten the length of your mortgage by refinancing to less than 30 years. You obviously need to pay highest-rate debt first. Take advantage of the deduction in the mortgage, but give priority to paying off non-deductible debt first.
Upgrade your Property
While home improvements may be costly, they are necessary in some cases. But you can lower some costs, such as home insurance, simply by consulting your insurance company what upgrades can be made to qualify for additional discounts. The following put you up for a premium discount:
- Storm shutters
- Shatter-proof glass
- Reinforcing your roof for added protection against rain and wind storms
- Installing the newer tank-less hot water heaters to reduce the risk of a leaking water heater
- Renovation that includes new or significantly updated plumbing or electrical systems
In this way, you will be able to make long-term cost savings while increasing the comfort and safety of your home.
Speaking of Premiums…
Try signing up for an e-policy and e-bill delivery as some providers offer a premium discount on these services. Moreover if you also you sign up for automatic payments and pay the full premium, a “Paid in Full” discount of up to 5% maybe in order. Finally, if you’re at least 55 years old or retired, you may qualify for a discount of up to 10%.
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