A home of ones own is a common aspiration, yet also a costly responsibility. Rental payments are swapped for mortgage payments, plus the associated costs of home ownership that include insurance, property taxes and on-going maintenance and repairs. In order to enjoy ones home to the fullest it makes sense to ensure that unnecessary costs are slashed and a proportion of the annual budget is set aside to cover maintenance.
The majority of people will find their mortgage is the highest monthly outgoing, thus it pays to always keep an eye out for a better deal. Mortgage costs can be reduced over the long term by making overpayments to the mortgage or reducing the term, to reduce the overall amount of interest paid to the mortgage lender. It is prudent to never become complacent with ones choice of lender but to comparison shop between better rates and remortgage if necessary, ensuring that no penalty fees are applied.
As well as considering the price of a property when house hunting one should also always ensure to find out the applicable property taxes to be paid, or council tax band in the U.K. These are recurring costs and once a property has been purchased must be met on an annual basis. Another annual cost which home owners face is property insurance. Again it pays to always comparison shop and check which home security measures would result in a discount. Maintaining a high credit score is an additional factor in obtaining lower insurance rates.
Home maintenance is part and parcel of home ownership. Ensuring the house is maintained in good condition can cut repair costs and increase the value of a home. A neglected home will lose equity and unanticipated repairs can result in debt if not prepared for.
According to Home Pulse, “The American Society of Home Inspectors recommends budgeting 1.5% – 4% of the home’s value for maintenance.” General wear and tear, leaks, cracks as well as appliance maintenance and repair, need to be considered. For those who aren’t natural handymen it may be worth considering a preventive maintenance program such as that provided by Home Pulse, to minimize and avoid costly repairs by having regular maintenance checks done by qualified technicians. Prevention can be cheaper than cure.
Many credit card providers offer an extension on a retailer’s warranty, so it is worth putting high ticket appliances on credit cards to take advantage of the offer. However the benefit will be lost if a credit card balance is carried, thus saving up for the item in full and then simply putting it on credit to gain the warranty is a good cost cutting measure.
One of the biggest costs facing home owners is energy usage. Although solar power is a wonderful alternative to other ways of heating the home, it can be an expensive option. However solar panel leasing an available choice to cut the costs which still leaves the home owner making a total saving on energy costs.
Naturally huge savings can be made by neglecting the home and only making makeshift repairs. The savings gained will be at the expense of the total value of the property, in addition to the safety of the homeowner. When considering a home purchase, if the price of the property stretches the budget and fails to allow for taxes, insurance and maintenance, it is a signal that the buyer is not yet ready to take on the responsibility of the homeownership.