The Best Ways To Decrease Your Home Living Costs
Saving money is something most of us strive to do, especially once you become a homeowner. The great thing about owning your own home is that you’ll know exactly what your monthly mortgage payment will be each month, which makes it easy to budget that category. However, you’ll find other areas that have more variability – and things that can sabotage your monthly budget, if you’re not mindful of your expenses. Fortunately, there are some simple ways to trim your spending and lower your home living costs.
Home efficiency
No matter the age of your home, there are often some energy-efficient upgrades you can make to help conserve energy and save money. Even the smallest project can add up to big savings over time.
Upgrade appliances: If you buy an older home, there’s a good chance the appliances are a bit outdated and may not be the most energy-efficient. You could begin upgrading appliances one by one to start conserving energy use. You may even be able to sell your older ones and use that money toward your new appliances.
Add a programmable thermostat: This is an easy and relatively low-cost project that you can do on your own. Being able to better control your heating and cooling can help you save a big chunk of change over time.
Install new light bulbs: Chances are, you may have some old incandescent bulbs hiding in your home’s light fixtures. As light bulbs continue to become more energy-efficient, it’s worth it to invest in some new bulbs that can help you save energy and money. Start with the bulbs you use most often for the biggest impact on your savings.
Lower hot water heater thermostat: Many water heaters are set at 140 degrees by the manufacturer; however, most homeowners find that a thermostat set to 120 degrees is sufficient. Not only can lowering the temperature save money, it can also prevent you and your family from being burned by too-hot water.
Sealing windows and doors: A lot of energy is wasted due to gaps around windows and doors in your home. Whether it’s hot or cold air slipping in between the cracks, it can have a negative impact on your energy bill. Pick up weatherproofing sealer at your local hardware store to help keep the outdoor air from seeping in.
There are some larger efficiency projects, such as installing double-pane windows or new insulation, which cost more up front but provide big savings over time. Projects like this may even warrant applying for an Energy Efficient Mortgage (EEM) to fund these updates. The EEM is a loan add-on, which means it’s in addition to a mortgage you get such as FHA, VA, etc. This also means it’s added on simultaneously with your mortgage, so it’s good to plan those energy-efficient updates ahead of time.
Mortgage refinancing
It doesn’t always make sense to refinance your home loan, but there are occasions where it can help you save big. In general, you’d want to refinance if it can lead to a better interest rate or term. If interest rates were much higher when you bought your home than they are currently, refinancing may be a good idea, since it may help you lower your monthly mortgage payments.
Mortgage recasting
Recasting is offered by some lenders and is the process of paying down a large part of the mortgage balance with one large sum or by making regular, extra payments — changing your existing mortgage loan. To recast your mortgage, the lender has to re-calculate your monthly payment using your lower loan balance, which means that you’ll pay less every month since the principal balance of your loan would be smaller.
The recasting process is fairly simple but if your lender offers this service they will usually charge some fee for doing so and you’d still need to qualify for recasting like you do with refinancing.
You can read more about the difference between recasting and refinancing your mortgage on the Atlantic Bay blog.
Unplugging
The term ‘unplugging’ is often used to describe taking a break from technology, but in this case, I literally mean to unplug your electronics when you’re not using them! Essentially, any electronic that stays plugged in is using phantom power – even when not being actively used. Separately, these things may not consume much energy, but when you consider how many things you have plugged in that aren’t being used, it can add up quickly. As you can see, you don’t have to drastically alter your lifestyle in order to decrease your living costs. A few simple changes here and there can lead to significant savings over time. If you’re interested in learning more about refinancing, your mortgage banker is a great resource.