7 clever ways to save money as a homeowner
As a homeowner, you’re always looking for ways to save money and shave costs. The same can be said about your homeowner’s insurance. Take advantage of 7 ways to save money as a homeowner, including a mortgage refinance. (iStock)
As a homeowner, you’re always looking for ways to save money and shave costs. This may be even more true due to the disruption in the economy and widespread unemployment caused by the coronavirus pandemic.
If you’re searching for ways to cut corners and keep homeownership costs down, then you should use an online marketplace like Credible. Credible can share tips that will save you money and time. Start by comparing mortgage rates to see if you can lower your costs.
How to save money as a homeowner
Check out these seven ways to save money as a homeowner, including taking advantage of the current low mortgage refinance rates.
- Take advantage of refinance rates
- Reexamine your home insurance policy
- Raise your deductible
- Shop around
- Consider bundling policies
- Try improving your credit score
- Make sure you're not underinsured
1. Take advantage of refinance rates
Interest rates have remained low for nearly a year due to COVID, which has fueled substantial mortgage refinance activity. However, as current political and economic factors evolve, Freddie Mac is reporting a fluctuation in rates. Even so, the Federal Reserve expects rates to remain relatively low for some time as the economy continues to rebound.
Use Credible's free online tool to easily compare multiple mortgage lenders and see prequalified rates in as little as three minutes.
Current rates (as of Feb. 11, 2021):
- 30-year fixed-rate mortgage (FRM): 2.73%
- 15-year FRM: 2.29%
- 5/1-year adjustable-rate mortgage (ARM): 2.79%
You may consider refinancing if your current home loan comes with high interest and monthly payments that exceed your monthly budget. Or, you may want to change mortgage companies, get rid of your private mortgage insurance (PMI), or use the equity in your home to finance a big purchase or remodeling project.
To refinance at the best rates, you will need at least 10-20% equity in your home, a steady income, and a good credit score. Refinance closing costs can range from 3-6% of the loan amount. That means you could pay as much as $6,000 on a $200,000 refinance. To learn if a mortgage refinance is best for you, use Credible’s mortgage calculator to see how much you can save.
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2. Reexamine your home insurance policy
Covering the expense of home insurance comes with owning a home. But as home insurance premiums have increased by nearly 6% since 2018, according to the NAIC 2019 Insurance Department Resources Report, homeowners are looking for ways to cut costs on their insurance and save you money over time.
Many insurers offer discounts. You might qualify for a discount if you keep your policy with the same insurer for at least three years, pay your premium annually (instead of quarterly), upgrade windows and insulation, add a security system, fire extinguishers, and smoke detectors, or by making energy-efficient upgrades.
Credible can help you choose your insurance. Click here to compare multiple home insurance quotes in minutes through Credible’s partners to potentially save you money.
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3. Raise your deductible
Although you should never have a deductible that’s higher than what you can afford out of pocket, it’s not uncommon to see your premiums decrease when you raise your deductible. Just raising your deductible by $1,000 can save you as much as 25% on your premiums, according to the Insurance Information Institute.
4. Shop around
If you’ve taken advantage of any discounts available to you through your current insurer, you may want to check out other insurers to make sure you're getting the very best rate. It’s easy to compare mortgage lenders and get a quote in just a few minutes at Credible.
But the cost isn’t the only thing to consider. Make sure you’re comparing apples to apples and getting the same coverage as on your current policy. Then, if you find a better rate, see if your current insurer can meet or beat it.
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5. Consider bundling policies
Most insurers offer better rates for bundling homeowners and car insurance. Generally, if you bundle your insurance policies with the same insurer, you’ll likely have only one deductible, which can, but may not always, be lower than if you didn’t bundle.
If you want to see what kind of insurance options are out there, head to Credible. Credible makes it easy to compare quotes, saving you both time and money.
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6. Try improving your credit score
In most states, your credit score impacts the cost of your homeowner’s insurance. How much you’ll save varies from one insurer to the next and is often a factor when setting your rates. It’s not uncommon that the higher your score, the better your insurance costs overall.
Insert your estimated credit score into Credible's free online tools to determine what refinance rates you'd qualify for on a new home loan.
7. Make sure you’re not underinsured
Although you want to explore all the options available to lower your homeowner’s insurance policy, you don’t want to trim costs so much that you're underinsured. There are no state-mandated standards for homeowner’s coverage, but being underinsured might leave you liable for a significant sum if your home sustains major damage or you have to rebuild.