|Top Homeowner Costs and How to Avoid Them |
Homeownership can be extremely rewarding. It is one of the best ways to build wealth, create stability, and hedge inflation. However, a challenging aspect of homeownership can be dealing with unexpected expenses.
Here are a few costs that can creep up and how to avoid them.
-Utility bills. Ensure your home is adequately insulated and consider using smart appliances, like power strips and programmable thermostats.
-Homeowners insurance. Review your policy and shop around for better pricing options. While you’re at it, look into catastrophic insurance. If you live in an area prone to hurricanes, tornados, or earthquakes, flood insurance may be worth the investment.
-Up next is heating and cooling systems. Furnaces and air conditioners need regular maintenance. Change filters routinely and schedule annual tune-ups to save money in the long run.
-Yard maintenance. Incorporate drought-resistant plants and landscaping techniques to limit the amount of care that your yard will need.
Finally, always replace the locks when you move into a new home, but do it yourself! With just a few tools, you will avoid the expense of a locksmith.1
Important Credit Tips for Home Buyers
Whether you are a first-time home buyer, trading up or down, or a novice in the market, your credit should be your top priority when purchasing a home. It is crucial to ensure your credit is in order as it influences loan eligibility and amount, mortgage type, down payment needed, and private mortgage insurance (PMI) costs. There are several paid and free options to monitor your credit. However, federal law allows you to get a free copy of your credit report every 12 months from each credit reporting company.
After reviewing your FICO score and credit report for accuracy, follow these steps.
– Communicate openly with your lender about your goals, intent, and financial capacity.
– Your score does not tell the whole story. Explain any gaps to your lender, such as a layoff or emergency expenses.
– Finally, take steps to build and maintain strong credit. Pay each bill according to the required terms, keep your credit utilization down, and avoid applying for additional credit lines.
Follow these three steps, and you’ll soon find yourself on the path to homeownership!.2
Rent Prices Exceeding Mortgage Payments in Major Metros
A recent study by Zillow found that average rent payments are higher than typical mortgage payments. In 33 of the 50 biggest metros, the average cost of rent exceeds the average cost of a mortgage payment. Memphis tops the list with the average monthly rent of $1,507 and the average monthly mortgage of $948 ̶ a $556 difference.3What Can You Deduct from Your Taxes as a Homeowner?Owning a home can be expensive, especially in the current market. From the down payment and property taxes to the utilities and upkeep, the cost of homeownership adds up. However, some tax deductions may make ownership more affordable. Talk with your accountant about possibly taking advantage of homeowner tax deductions like mortgage interest, property taxes, or even home office expenses.4Sources: 1moneytalknews.com, 2washingtonpost.com, 3foxbusiness.com, 4forbes.com
This Market News Report courtesy of Jasmine Rassekh with Mortgage Capital Partners