Remodelling Your Home: Government Programs That Help

Federal, state, and local government incentive programs for home remodeling are aimed at helping homeowners improve the value of their homes, which in turn supports the economy and helps strengthen communities. These are official programs that provide tax relief, low-interest loans, and other incentives, but they can be hard to find. For example, you may find a notice of a program on a postcard for a property tax increase. Currently, three major programs may be available in your area.

What They Are: Home improvement property tax exemptions.

What They Do: These programs allow for total or partial exemptions from your local property taxes when remodeling your home.

Eligibility Requirements: Eligibility varies by county or town, but typically any owner of one property can qualify. The property usually must be owner-occupied but not always.

Counties rarely itemize which remodels are allowed; instead, they define them in broad terms, such as “material, actual, and permanent property improvements that increase value.”

Downside: Relief from property tax is only temporary.

Who Offers Them: Written into state law, these programs are administered by tax assessors and counties or towns.

What They Are: FHA 203(k) Rehab Loan programs.

What They Do: Typically, when purchasing a home that needs remodeling, your first mortgage covers only the cost of the purchase, not the subsequent remodeling. Concurrently obtaining a remodeling loan may mean long approval times, high-interest rates, and balloon payments. Also, lenders don’t like to approve remodel loans at this time because your intended house, in its current less-than-perfect state, cannot act as proper collateral. Through FHA rehab loan programs, the U.S. government will insure your loan, wrapping the purchase and remodel amounts into one package and insuring it all for the lender.

Eligibility Requirements: Requirements are broad, ranging from minor (which HUD defines as $5,000 or more) up to a home that will be razed and completely rebuilt.

Downside: Inevitable red tape. However, independent consultants can help streamline the process for you.

Government home programs are limited to upgrades that increase a home’s value. Incentives do not apply to luxuries or amenities such as spas or outdoor kitchens. They also come with a few common rules for eligibility:

You must apply before doing the work. Incentives are not available for past renovations.
Types of remodels are limited. Programs primarily support basic rehabs that increase property value. For example, some property tax exemption programs will not cover replacing a composite roof with another composite roof but will cover an upgrade from composite to a higher-value material because this represents a property value upgrade. Some incentives even apply to tearing down a house and building a completely new one.
Oversight is required. At least one inspection is required to make sure that the project exists and that it is proceeding according to plans.
Home Improvement Programs

What They Are: Home improvement programs (HIPs); typically low-interest or no-interest loans.

What They Do: Help you save thousands when counties or other local governments subsidize the interest on home remodeling loans. Interest may be completely or partially subsidized.

Eligibility Requirements: Various eligibility rules may apply, but generally:
- You must be rehabilitating an existing structure; it’s not for buying a new home and not for building another structure on your property.
- Your gross income may not exceed a certain limit.
- The loan is not used for luxury items, such as pools or decks.
Downside: Not all areas offer HIPs.

Who Offers Them: Learn about loans offered in your area by contacting the local county tax assessor. You may be directed to a private lender to obtain a home equity loan, or HELOC, subsidized by the county.

Essential Items You Need for a New House

Whether it’s the need to hang a clock just a few feet higher or the realization that you really can’t hold a flashlight and get that nut loosened under the sink, there’s always something catching you by surprise as a homeowner.

With the right items on hand, however, you can be prepared for every scenario — just like Hunter was, thanks to that ladder.

Here’s things you should buy for a new house:

#1 Tool Kit

You’ll need something to carry all those tools around from project to project. Create a tool carrier using a tool bucket liner and an old 5-gallon bucket. Or invest in a handyman belt filled with the basics to keep on hand in the kitchen.

#2 Wet-Dry Vacuum

You’re gonna be spilling stuff. Look for a wet-dry vacuum that can handle everything from paint to nails and small stones. “We inherited one of those with our first house, and it was an awesome thing to have for vacuuming the car and cleaning the garage,” Hunter says. Unlike the ladder, “we kept that Shop-Vac when we moved.”

#3 (The Right) Fire Extinguisher

“Whenever anyone I know moves, I give them a fire extinguisher as a housewarming gift,” says Nina Patel, a Silver Spring, Md., homeowner who, years ago, accidentally set her apartment on fire with a homemade candle. “I was able to put out the fire with a pan of water, but it was a panicked moment. I’ve had my own fire extinguisher ever since.”

But before going out and buying the first extinguisher you see, check out the U.S. Fire Administration’s guide. There are five different types of fire extinguishers with different uses, from extinguishing cooking oils to wood and paper. Choose the best type or types for your home.

#4 Extension Cord Organizer

Home ownership seems to breed extension cords that grow into a tangled nest. Save yourself time and hassle, and splurge on one of several cord management devices. Or make your own with a pegboard, hooks, and velcro straps to keep each cord loop secure. Either way, your cords will be knot-free and easy to find. And be sure to include a heavy-duty extension cord in your organizer that’s outdoor-worthy. You don’t want to really have to use that fire extinguisher.

#5 Big-Kid Tools

Odds are you already own a bunch of the basics: drill, screwdriver, hammer, level, tape measure, wrench, pliers, staple gun, utility knife, etc. But home ownership may require a few new ones you might not have needed before, including a:

Pry bar. Get one with a clawed end to pull nails and a flat end to separate drywall, remove trim or molding, and separate tile.
Stud finder. You can make as many holes in the walls as you want now. Use the stud finder to figure out where to hang those heavy shelves so they’re safely anchored.
Hand saw. Much easier (and cheaper!) than a power saw, you can get a good cross-cut saw for smooth edges on small DIY projects.
Ratchet set. Every bolt in your new house belongs to you, so you’d better be able to loosen and tighten them when needed. Crank that ratchet to get to spots where you can’t turn a wrench all the way around. Great for when you’re stuck in a corner.

#6 Confidence

“Especially for first-time home buyers. You’re inheriting the responsibilities a landlord would have if you were renting,” says Hunter. “Mowing isn’t a big deal, but maybe fixing a shingle or changing a faucet is.” But with a little self-confidence — and some YouTube tutorials — there’s (almost) no DIY project you can’t master.

#7 Headlamp

Take that flashlight out of your mouth and work hands-free. From switching out a faucet to figuring out what’s making that clicking noise behind the washer, there are plenty of homeowner tasks that require both hands and a little artificial light.

#8 Emergency Preparedness Kit

FEMA has a great list of supplies you should have in your kit, including cash, food, water, infant formula and diapers, medications, a flashlight, batteries, first aid kit, matches, sleeping bags, and a change of clothing. The agency recommends you stock enough for every member of your household, including pets, for at least 72 hours.

#9 Ladder(s!)

But not just any old ladder. Consider:

How high you need to go. If you use an extension ladder for a sky-high job, school yourself on safety tips, such as not standing above the support point.
Where you’ll use it. Make sure all four legs on a stepladder rest safely on a flat area. A straight ladder must be set up at a safe angle, so if a ceiling is too low, it might be too long for the room.
How heavy-duty it is. Check the ladder’s duty rating so you know how much weight (you, your tools, paint cans, etc.) it’ll support.

And don’t forget about the all-important escape ladder. The Red Cross recommends them for sleeping areas in multistory homes.

New Homeowner Checklist

The weeks leading up to a home purchase are super stressful. Between the home inspection and finalizing your financing, you also have to start packing up your entire life and maybe arranging for movers — or even selling your old house under a tight timeline. Then there’s the actual closing, when you sign your life away on about 500 different forms.

But after closing, the real fun begins. Now you’ve got this house to deal with. And if your home, like ours, is full of fixer-upper ~~flaws~~ charm… it can be very overwhelming.

Seven years ago this month, we bought our house — our first home. It was exhilarating, but also terrifying. We found that focusing on a few small, manageable-but-productive tasks during our first week of home ownership made us feel way more in control of things during a period that could have easily spiraled into existential despair.

In that vein, here’s a checklist of simple things you can and should take care of when you first move into your new house. (Also, I forgot to say: Congratulations!)

1. Clean (or book a cleaning).

Before you unpack, and ideally before the furniture arrives, clean like mad, or hire a house cleaner to do a one-time deep clean (check for deals on Handy, Groupon, or Angie’s List — you shouldn’t have to pay more than $100-$150). You don’t have to be a clean freak to appreciate that living in your own mess is very different from living in someone else’s.

Vacuum and wash carpets (rent a carpet cleaner if you need one), sweep and mop the floors, bleach the entire bathroom, clean the fridge and the oven and all the sinks, and wipe down all your cabinets, drawers, shelves, and closets.

2. Take a few days off.

The first week or two in your new home will be an adrenaline-fueled flurry of phone calls, fixing stuff, unpacking, and waiting — for deliveries, contractors, and Internet installers. Trying to squeeze all that in around your job will only make it more stressful.

You just bought a house — it’s a big deal, and something you’ll probably only do a few times in a lifetime. Allow yourself to take some vacation or personal days.

3. Do any improvements or repairs you can before moving in.

Whether you do it yourself or hire a pro, it’s infinitely easier to do work on a house when no one is living there. This is especially true for those projects best done without furniture in the way, such as interior painting, plastering, or sanding and refinishing hardwood floors.

And if your home needs some work behind the walls — such as updating knob-and-tube wiring or replacing rusted-out pipes — do it now, before you get settled in, if at all possible. You’ll be glad you did.

4. Change your address and set up utilities.

For starters, alert the post office that you’ve changed your address, so they can forward mail to your new home. However, that service only lasts for a few months, so you should also start changing your address on all of your important accounts, such as your workplace benefits, bank accounts, credit cards, car and health insurance, magazine subscriptions, and memberships.

Likewise, call up the gas and electric companies and tell them you’ve moved. In most cases they’ll just transfer your account to your new address. You can often do the same with your cable or Internet provider, too, if you’re moving within the same service area. Otherwise, investigate your local options and call to set up service while you’re home getting settled.

5. Change the locks.

Even if you like and trust the previous owner, there’s no way of knowing how many copies of your house key are floating around – or who has them. (That reminds me: Our electrician still has a key to our basement. Um, I should probably get that back.) A new door hardware set will only run you about $50, and it’s well worth the peace of mind.

While you’re at the hardware store, get a few extra copies of your new key made, and give one to a trusted friend, neighbor, or relative for emergencies.

6. Plan now for emergencies.

The time to be researching plumbers in your area is not when the toilet is broken and spewing funky sewage onto the bathroom floor. (Gross — see “Find your shut-off valves” above!)

Ask your new neighbors for the names of any tradespeople they’d recommend, including plumbers, electricians, and handymen, or get an Angie’s List membership and start researching highly rated contractors in your area. (You can also sign up and introduce yourself on NextDoor, a neighborhood social media site, and ask for recommendations.)

Also, look up the numbers for poison control and local emergency services (if it’s not just 911) and put them on the fridge. Check all your smoke detectors and replace the batteries if you need to — you can also ask the fire department to come by and inspect them. Finally, find all of your emergency exits, and make a family fire plan that also designates a meeting point outside.

7. Use your home inspection report to plan future upgrades.

Your home inspector should give you a comprehensive report indicating the condition of all the major systems and structural parts of your home. Ours probably had like 50 items that “needed attention,” and this originally formed the basis of our long-term home improvement game plan.

From there, we made some lists: The stuff that was fairly easy to accomplish — or simply critical — went on the short-term, right-away list. Make sure there are some gimmes on there to help you build momentum! The stuff that can wait may have to wait.

8. Get a small safe or filing cabinet.

Even if you’ve never had one before, you’re probably going to need a filing cabinet or small safe now. File your closing statement and all the paperwork from your home purchase — that’s important stuff, and you’ll need it come tax time at the very least.

And that’s just the beginning of a lot of paperwork you’ll be filing from here on out. Keep receipts and instruction manuals for any new appliances you buy, your insurance and property tax bills, and any estimates or receipts from contractors as you make improvements.

9. Find out where your shut-off valves are.

One of your first lines of defense when it comes to common homeowner emergencies — burst water pipes, for instance — are shut-off valves. Turning off the water (or gas, or electricity) is like being able to slam on the brakes when you’re driving.

First, there are shut-off valves for small, localized problems: If the toilet is overflowing, look for the valve coming out of the floor or the wall behind the toilet and turn that to the right to stop the water flow. If your sink or faucet is leaking uncontrollably, the shut-offs will usually be under the sink (one for cold and one for hot).

Likewise, there should be a gas shut-off valve near your stove or dryer if either one uses natural gas. Find and familiarize yourself with all of these local shut-offs.

Then — and most importantly — find your main shut-offs, which control the gas and water coming into your house from the street. They’re usually found in the basement, toward the front of your house, but not always. Learn where these are ahead of time so you’re not clumsily searching for them in a panic as a geyser of a busted pipe is gushing water all over your kitchen.

Your circuit breaker acts as a shut-off for your home’s electricity. Individual circuits will control the electric flow to certain rooms or appliances — one breaker switch might shut off all the overhead lights, while another might control the refrigerator and the microwave outlets. Get familiar with the circuit breaker, and note where the main shut-off switch is to turn off all power in an emergency (if water is leaking into a live light fixture, for instance).

10. Create a seasonal home maintenance checklist, and start using it.

There are some maintenance tasks you’ll have to do to your home annually or semi-annually to keep it in good shape. And depending on the season you move in, it’s probably time to get started on some of them.

It’s really more of a two-season checklist than a four-season one; nobody wants to do stuff like this in the scorching summer heat or from underneath a foot of snow, so I tend to break down the tasks into spring and fall:

Spring/early summer home maintenance checklist

Install window A/C units (or check central air units): Trust me, the time to lug these things down from the attic and wrestle them into place is before the first scorching hot day, not right in the middle of it. Clean the filters before firing them up for the season.
Test your smoke detectors: Fire safety folks recommend doing this whenever the clocks spring ahead or fall back. Change any dead batteries.
Clean your gutters: Leaves and other debris from fall and winter may have choked up the works, and you want them free and clear before April’s heavy rains. If you have a one-story house, this is easy to do yourself; if your home is two or more stories or you’re afraid of heights, it should only cost about $60-$100 to have a pro come and do it.
Fertilize or plant new grass: The time to plant and fertilize grass is early spring: With the nights still cold, grass grows but weeds don’t. If you get a nice thick lawn growing by May, it can naturally crowd out the more unsavory stuff like crabgrass and dandelions. (If you don’t mind some chemicals, you can use crabgrass preventer or weed-blocking fertilizer — but usually not with new grass seed.)
Clean out your dryer vent: Your lint screen may be full of fuzzies each cycle, but a lot of it is still getting into that space-age silver tube. Clean it out with a vacuum or a long, bendy brush once a year to improve your dryer’s efficiency (and so it doesn’t catch fire).
Clean ceiling fans: They can get pretty dusty up there sitting idle all winter long.
Stain or paint the deck: Every other year or so, you’ll need to add another coat of stain to your deck’s floorboards (the railings and spindles can usually go five years or more). On a dry spring day, give it a good cleaning, and then strap a roller brush to a broom handle and slap another coat on there to protect the wood.

Fall/early winter home maintenance checklist:

Store hoses and turn off the water to outside spigots: You don’t want water freezing in your garden hose or faucet and breaking the pipes. In the basement, just follow the pipe from the faucet to the nearest shut-off valve, and turn it clockwise or so it’s perpendicular to the pipe.
Chimney sweep: You should get your main boiler or furnace chimney swept every couple of years — buildup in there can cause a chimney fire. And if you have a wood-burning fireplace or wood stove, get that cleaned out every couple of years or every time you go through a cord of wood, whichever comes first.
Boiler/furnace clean-out: Before heating season begins, you should get an inspection and the recommended annual maintenance on your boiler or furnace. If you get oil delivery, your oil company should take care of this for you. With gas, you’ll need to call your own plumber or heating technician. Since we have a pretty new gas steam boiler, our plumber told us we could do it ourselves: Just flush out all the water that’s in there (draining into a bucket and dumping it outside or down a drain), and then fill it back up. Repeat that a couple of times and you’re good to go.
Batten down the hatches: Move patio furniture into the garage (or at least take the cushions inside), cover up the grill, and remove and store your window A/C units (or cover up your central air unit). Move snow shovels, deicer, and other snow gear to an accessible spot in the garage or shed.
Tune up your snowblower: Snowblowers take a beating each winter — the metal parts get soaked, they get road salt inside them… it’s easy for them to get rusty and crap out on you. But you want yours ready to perform well when that first foot of snow falls. This year I plan on taking mine for a tune-up in the fall so it’s all set to go — you can often find a deal on Angie’s List, and you shouldn’t have to pay more than $100 for this type of service.

11. Throw a housewarming party.

Your first few weeks in a new house are going to be filled with the adrenaline and excitement that comes with such a big life change. Now, trust me on this: You need to tap that energy and get everything done that you can before the adrenaline wears off.

Don’t lose steam. For most people, whatever isn’t unpacked after about two months just stays in boxes and gets shoved in a closet. If you haven’t put pictures up on the wall after a couple of months, you’re going to be looking at empty walls for a long time.

Once you stop going all-out in move-in mode, it becomes really, really hard to get going again. After all, it’s exhausting, and you deserve the rest!

That’s why throwing a housewarming party is a great idea after you move in. It gives you a defined deadline to get the place in order, and puts just the right amount of motivational pressure on you to keep at it.

It’ll force you to confront those stray boxes and make tough decisions about what to do with them. It’ll push you to get the walls painted and decorated and to assemble that IKEA desk that’s been sitting in a box for two weeks. If you don’t do it now, there’s honestly a good chance you’ll be using that box as your desk six months from now.

It will allow you to share your excitement and hard work with the people you care about – not to mention, you might get a nice gift or two. (Tools make great house-warming gifts.)

And finally, accept that once the party arrives, you’re allowed to relax. You’re done. This is your home now, and this is what home looks like. You’ll make many more improvements to it, but for now, enjoy it.

12. Go to IKEA.

Let’s face it: Unless you’re downsizing, you might need some new home furnishings to fill out your new place. And for most of us 99 percenters, that means an IKEA run.

Maybe you’re moving from a small galley kitchenette to a large eat-in kitchen, or your old couch was too big or too ratty to move. Whatever the case, if you need to fill some empty rooms, the Swedish home goods superstore is a good starting point.

What do I mean by a starting point? You’ll have made a LOT of big decisions in the past few months, and you may not be ready to commit to an $1,800 living room set the same week you move in. You may do better living in the house for awhile before you make those kinds of design choices.

Meanwhile, IKEA furniture is cheap, functional, and attractively designed, so you usually can’t go wrong getting basic items here. What’s more, IKEA items hold their value surprisingly well — at least in a college town like Boston — so you can start with stuff that’s fairly cheap and functional and upgrade at your own pace.

Pick up a basic Ecktorp sofa to buy yourself some time — a steal at $450 — and then, when you do find that perfect living room set, sell the sofa for $300. (Or head straight to Craigslist or other places you can find used furniture and home goods.)

Finally, do not go to IKEA on a weekend if at all possible! Browse the catalog first to research the stuff you want to see in person, and then make a targeted trip around 7pm-8pm on a weeknight. You can zip through in under an hour without the mobs of people in your way, saving you time and certain rage.

And make sure to go with an empty trunk! When we went to buy our sofa, we brought the kiddo. Despite the flat-pack design, the sofa wouldn’t fit with her car seat in the back, even with half the back seat folded down (I don’t know why I thought that would work).

So I had to leave my wife and kid at IKEA and race home with the sofa. The worst part was that they were still inside the store and had no idea I was doing this — there’s no cell service in there. So I sped home, dumped the sofa in the driveway, and raced back, anxiously hoping that I got there before a) they went looking for the car or b) a toddler meltdown ensued.

The good news is, it’s IKEA, and it takes anyone a couple of hours to get through the store, much less someone with a dawdling toddler. They didn’t even know I was gone. Whew.

How to Save Money as a Homeowner

Your house gives you so much: security, pride, shelter. With all that on the line, it’s easy to assume the costs of keeping it up just are what they are. But wait. There are plenty of expenses you probably make to keep your home in good order that are simply a waste.

Here’s how to save money each month without putting a dime of home value at risk.

#1 Cut Back on Laundry Detergent

Never mind the barely visible measurement lines in the cap: You typically only need a tablespoon of detergent. And, clothes actually get cleaner when you use less, because there’s no soap residue left behind.

#2 Clean Your Light Bulbs

What? Who does that? Well, smart people. A dirty bulb emits 30% less light than a clean one. Dust off both the bulb and fixture, and you might be able to cut back on the number or brightness of lights in each room without noticing any difference.

#3 Keep Your Fridge Full

Solid items snuggled together retain the cold better than air and help keep each other cold — requiring less energy overall. Leaving town for awhile and fridge is empty? Fill voids in the fridge or freezer with water bottles.

#4 Switch Your Bulbs to LEDs

By replacing just five of your most-used incandescent bulbs with uber-efficient light-emitting diode (LED) bulbs, you could save $75 a year on your energy bill.

And LEDs last 15-20 times longer than incandescents, so you won’t have to replace them nearly as often.

#5 Cut Scouring Pads In Half

Most clean-ups don’t require a full one.

#6 Use Power Strips

Appliances like coffee makers, TVs, and computers continue to suck power even when they’re off — which can cost you $100 a year. And did you know the AC adapter for your laptop keeps drawing power even if the laptop isn’t plugged in? Stop this slow money burn by connecting them to an easy-to-switch-off power strip.

#7 Use a Toaster Oven When Possible

Toaster ovens use 50% to 70% less energy than a full-size oven.

#8 Set Your Water Heater to 120 Degrees

Hot water heaters often come with a factory setting that’s higher than you need. You’ll cool your water heating costs by 3% to 5% every time you lower the temperature setting by 10 degrees.

#9 Insulate Your Water Heater

For $30 or less, an insulating jacket or blanket can shave 7% to 16% off your water heating costs for the year. Just make sure to follow the manufacturer’s directions to avoid creating a fire hazard.

#10 Use the Right Dryer Cycle

If you’re using a high-heat setting for each load, you could be using more energy than you need. Almost all fabrics can be dried with a lower heat setting, such as the permanent press setting. It uses less energy and has the added bonus of extending the life of your fabrics. Save the higher heat for items such as sheets and towels.

#11 Use Homemade Cleaners

Many commercial products rely on baking soda or vinegar for their cleaning power, so why not make your own? Most homemade cleaners cost less than $1.

#12 Ditch Disposable Sweeper and Mop Head

Stop throwing money away every time you clean! Refill your Swiffer Sweeper with microfiber cloths. Just cut to size and use them dry for dusting or with a little water and floor cleaner for mopping. Or switch to a microfiber mop with a washable head.

#13 Stop Buying Dryer Sheets

Another easy swap? Give up your dryer-sheet habit (about $7 for 240 loads) in favor of wool dryer balls (about $10 for six, which last more than 500 loads each). Of course, depending on your laundry preferences, you can always just go without either.

#14 Wash Clothes in Cold Water

Just switching from hot to warm water will cut every load’s energy use in half, and you’ll reap even more savings taking the temp down to cold. And don’t worry: Your clothes will get just as clean from cold water, thanks to the efficiency of today’s detergents (except in the case of sickness; you’ll want hot water and bleach then).

#15 Don’t Rinse Dishes

Two minutes of rinsing with the faucet on full-power will consume 5 gallons of water — the same amount efficient dishwashers use during an entire cycle. Shocking, right? And it’s an unnecessary step, since most newer models are equipped to remove even stubborn food debris. Just be sure to clean the dishwasher trap regularly to keep your dishwasher running efficiently.

#16 Keep a Pitcher of Water in the Fridge

You won’t have to waste time and money running the faucet, waiting for it to get cold enough for a refreshing sip.

#17 Set a Timer for the Shower

The average American takes an eight-minute shower and uses about 17 gallons of water. It’s easy to linger, so set a timer for five minutes. Or try this more entertaining idea: Time your shower to a song or podcast segment.

#18 Install Low-Flow Fixtures

In addition to water-conserving practices, low-flow showerheads, which cost less than $10, and other fixtures can drop your water use in the shower by 43%.

#19 Water Grass in the Morning to Save on Your Water Bill

Turning the sprinkler on midday is kinda like watering the air — especially when the mercury soars. Lose less to evaporation by watering during cooler hours (but avoid overnight watering, when too-slow evaporation can invite fungus growth).

#20 Hack a Water-Hogging Toilet

If you don’t have a water-conserving toilet, there are water-saving retrofitting kits that could yield about $110 in savings every year. Or place a half-gallon milk jug filled with water into the tank — in the corner and away from the flapper and ball-cock assembly. Every time you flush, you’ll save.

#21 Close Closet Doors

Each closet and pantry may hold a paltry amount of square footage, but you’re still heating and cooling it. Add up all the storage space, and you’ve got the equivalent of a small room. Shut the doors to keep the conditioned air out.

#22 Program the Thermostat

Program your thermostat to turn the heat down by 3 to 5 degrees when you’re not home and at night, and set it to bump the temperature up by the same amount when the A/C is cranking. You’ll save $10 to $20 a month and never feel the difference.

#23 Don’t Crank the Thermostat Up or Down Too Far

Varying the setting by 10 or more degrees when you’re gone for work or over the weekend is overkill. Your HVAC system will have to work overtime to get back to the ideal temperature, erasing your savings.

#24 Use Fans Year-Round

Ceiling fans can reduce your summer cooling costs and even reduce winter heating bills — but only if used correctly. Flip the switch on the base to make the blades rotate counterclockwise for a cooling effect or clockwise to help distribute heat in the winter. And in the warmer months, an attic or whole-house fan can suck hot air out and help distribute cooler air so you can give the A/C a little break.

#25 Caulk or Weatherstrip Around Doors and Windows

Caulk may not have the charisma of something like solar panels, but using it to seal air leaks around doors and windows will deliver immediate savings rather than a 14-year payback. You’ll spend $3 to $30 and save 10% to 20% on energy bills.

For gaps between moving parts that can’t be caulked, add weatherstripping.

#26 Add Insulation

This is a bigger weatherizing project than caulking or weatherstripping, but it could yield more than $500 in yearly savings. While your home should be properly insulated from the roof down to the foundation, prioritize the attic, under floors above unheated spaces, around walls in a heated basement and in exterior walls.

#27 Plant Shade Trees

Block the summer sun to lower cooling costs. Planting one shade tree on the west side and one on the east side of your home can shield your home from the sun during the summer months (but avoid south-side trees, which block winter sun). By the time they’re 15 years old, these two trees can reduce your energy bill by 22% , while adding value to your home.

#28 Cool with a Cross Breeze

On a breezy day, open a window on the side of your house that’s receiving the breeze, then open another on the opposite side of the house. Make sure the window on the receiving side is open a little less than the exhaust side to accelerate the breeze. You can also use a fan if there’s no breeze outside.

#29 Check Your Mortgage’s PMI

If your mortgage was for more than 80% of your home’s purchase price, you could be paying more than $50 a month, and as much as $1,000 a year, for private mortgage insurance (PMI). So as soon as you have at least 20% equity in your home, contact your lender to terminate the policy — they aren’t necessarily required to notify you when you reach that threshold.

Another option for ditching PMI? If your credit score or debt load has improved since securing your mortgage, look into refinancing with more favorable terms.

#30 Check Your Home Insurance for Savings

Your homeowners insurance should change as your life changes. Buying an automatic generator or installing security alarms could reduce your premium by 5% or more.

Bundling your home and auto coverage could save even more — up to 20% off both policies. But the point is to compare and do a price check to see if you can save.

Surveys have found you could be paying a lot more than what another insurer would charge for the same coverage. So you could save by going with a new company, or by using their quote to bargain with your current provider.

#31 Borrow Tools Instead of Buying

How often are you going to use that $600 demolition hammer once you remove your bathroom tile? Not so much? Rent it from a home-improvement store for a fraction of the cost. Be sure to do the math for each tool and project though; sometimes the rental price is high enough to justify buying it.

Or join a tool lending library or cooperative to borrow tools for free or much less than retail stores.

#32 Cut Back on Paper Towels

Two rolls of paper towels a week add up to about $182 every year! Instead, try machine-washable cotton shop towels. They clean up messes just as fast and cost less than $2 for five. Save paper towels for messes that need to go straight into the trash, like oil and grease.

#33 Stop Buying Plants for Curb Appeal Every Year

A pop of color in your landscaping perks up your curb appeal. But instead of wasting household funds on short-lived annuals, invest in perennials that will keep giving for years to come.

#34 Make Your Yard Drought-Tolerant for Long-Term Savings

Save $100 or more yearly by replacing water-hogging plants and grass with drought-tolerant and native species, and beds of rock or gravel. You’ll save time on maintenance, too.

#35 Use Curtains as Insulation

Another way to practice energy-saving passive heating and cooling? Open curtains on sunny windows in the winter and close them up in the summer.

Is Owning a Home the Right Choice?

Buying a home is the biggest financial decision many people make. Among the questions you need to ask yourself is why are you looking to buy?

“There is an emotional side to home ownership, particularly in the United States – it’s often baked into people’s vision of the future or part of the American dream,” said Tom Figgatt, president of Portolan Financial in New Orleans. “And it does feel good to own your own house; you can feel like it is a home and not just a temporary dwelling.”

But it’s not as simple as that. The benefits of home ownership don’t come without costs and limitations. Is renting a better option? The pros and cons of buying a house should be weighed up front.

Advantages and Disadvantages of Owning a Home

Before buying a home, it’s important to consider how such a purchase will affect your finances and your lifestyle. It makes sense to review all of the advantages and disadvantages of becoming a homeowner before making this big commitment.

What Are The Disadvantages of Owning a Home?

Equity doesn’t grow immediately: Most of the payments go toward interest in the early years of a mortgage, so you don’t gain equity quickly unless property values in your area skyrocket.
Illiquidity: Although houses have value, they typically don’t sell as quickly as stocks or other assets. While you’re trying to sell your home, you still have to keep making mortgage payments and maintain it.
High upfront costs: Closing costs on a mortgage can run from 2% to 5% of the purchase price, including numerous fees, property taxes, mortgage insurance, home inspection, first-year homeowner’s insurance premium, title search, title insurance, and points, which are prepaid interest on the mortgage. It can take about five years to recover those costs.
Less mobility: If one of the advantages of home ownership is stability, that means it will be more difficult to accept an attractive job offer requiring you to pick up and move to another city.
Maintenance costs: There is no property supervisor to take care of plumbing problems, and if the air conditioner goes out, you’re not only going to sweat until it’s fixed but you’ll be writing a check to get the cool air flowing again. The same is true of the landscape.
Property values can fall: That happened during the 2008 nationwide housing crisis, and more local conditions can cause this, too. Your building will depreciate over time, especially if you don’t maintain it.

What Are The Advantages Of Owning A Home?

Stable monthly payments: A fixed-rate mortgage means you’ll pay the same monthly amount for principal and interest until the mortgage is paid off. Rents can increase at every annual lease renewal. Fluctuating property taxes or homeowner’s insurance can change monthly payments, but that typically doesn’t happen as often as rent increases.
A good long-term investment: The Federal Reserve Bank of St. Louis reports that the average price of homes sold in the United States rose 28% in 10 years starting in 2009 and 10% from 2014 to 2019. Even if the value of the structure itself depreciates, the land on which it sits can become more valuable. You are investing in an asset for yourself rather than a property management company.
Building equity: Your equity is the difference between what you can sell it for and what you owe. Your equity grows as you pay down your mortgage. Over time, more of what you pay each month goes to the balance on the loan rather than the interest, building more equity.
Greater privacy: Also, since you own the property, you can renovate it to your liking, a benefit of home ownership that renters don’t enjoy.
Stability: People tend to stay longer in a home they buy, if only because buying, selling and moving frequently is difficult. Buying a home requires confidence you plan to stay there for several years.
Federal tax benefits: Mortgage interest is deductible, as is interest on home equity loans, property taxes and some closing costs when buying the home. However, Figgatt notes, tax law changes raising the standard deduction and capping deductions that can be taken on state and local taxes, make it less likely for younger people and those buying starter homes to enjoy those breaks.

Advantages and Disadvantages of Renting a Home

So, home ownership might not be for everybody, at least not in every stage of life. If renting a residence isn’t considered the American dream, not everyone in a nation of 330 million has the same needs or resources. So, before you buy, consider whether that is right for you right now.

Financial Disadvantages of Renting

No cosmetic improvements: If your home looks dated, you may just have to get used to it.
You can’t change the property: Would you like a deck for entertaining? Would you prefer a fenced yard? There’s nothing you can do about any of that in a rental except complain and see where that gets you.
Rent may increase: You may be comfortable with what you’re paying each month, but that could change when your lease comes up for renewal, typically in six months or a year.
You aren’t building value: When you leave your rental, all you take with you is yourself and the moveable property that belongs to you. It’s the property owner’s equity that grows, not yours.
No credit score improvement: While paying a mortgage on time improves your creditworthiness, you don’t get the same benefit from rent.

Advantages of Renting a Home

Low upfront costs: Except for a security deposit – often the cost of a month’s rent – you don’t have to write a big check or finance the costs required to get a mortgage. No HOA dues: Some homes are in developments with homeowner’s associations that require monthly dues on top of all the other expenses, and they aren’t optional. Not so with renting.
Rent payments may be lower: This certainly can be true if you’re renting an apartment, and it also may be the case when renting an identical house. If a mortgage is more than you can afford right now, renting makes more sense than being stretched too thin financially.
Repairs aren’t your responsibility: The property owner has to pay for that leaky faucet and anything else that breaks or wears out. So, you don’t have to factor those unplanned expenses into your budget.
Flexibility: If you want to relocate, having a mortgage can make that difficult. A house can take much longer to sell than you’d like, and if you move before it sells, you still have to make the monthly mortgage payments, so you’re paying for two residences while living in only one. Your obligation to a place you rent can’t exceed the length of the lease, and if the property owner can quickly find a new tenant, that can get you off the hook.

In assessing the pros and cons, Figgatt suggests you ask three questions.

1. Why are you looking to buy?

“If you’re looking at the purchase as an investment, it could work out very well, but high fixed costs mean the shorter the amount of time you hold the property for, the less likely you are to come out ahead relative to other investment opportunities out there,” he said. “Constantly buying and selling houses if you move frequently may be eating up wealth, not increasing it. And if you plan to rent the place out after you move, make sure you have a plan for managing the property – be ready to pay for that, too.”

2. Can you afford it?

“The down payment, closing costs and risk of sudden, very large expenses popping up combine to make it a very expensive proposition,” he said. “You need to save above and beyond your mortgage payment for infrequent yet major household expenses so that you keep it up properly. And making a smaller down payment and paying private mortgage insurance (which protects a lender in case you default on your mortgage) only increases the total cost of ownership.”

3. How long do you expect to stay in the house?

“It can be difficult to break even on a house if you stay in it for three years or less; the closing costs and commissions are significant, and expecting the house to appreciate in value enough within three years to make up for those costs may be setting your expectations too high,” Figgatt said. “And remember that your entire mortgage payment does not go towards the home’s equity. During the first year of your mortgage, depending on the terms, perhaps only about 30% of the principal and interest payments will actually go towards the principal of the home.”

How to Increase Your Home Value

Making your house more efficient, adding square footage, upgrading the kitchen or bath and installing smart-home technology can help increase its value.

Nearly two-thirds (65%) of U.S. homeowners believe the value of their home will continue to rise over the next 10 years, according to a NerdWallet survey conducted online by The Harris Poll among over 1,400 homeowners in August 2018.

That may be optimistic, considering that some factors that determine what a house is worth, like its location and the popularity of that market, are out of your control.

If, like 70% of American homeowners, you believe your house is your biggest asset, taking care of it is probably a top priority. The good news is, keeping up with repairs and making smart improvements are both proven ways to increase home value over time.

Whether you want to build equity or get top dollar when you sell, use the tips below to raise the value of your home.

1. Make it low-maintenance

Since many home buyers worry about buying a home that will need constant maintenance, replacing a major component before putting it up for sale — like the furnace, water heater or even the roof — may calm fears of an emergency repair in the near future and help get you a higher price.

Improvements that make things easy to clean and maintain may also increase home value. Consider replacing easily stained carpet with hardwood floors or replace high-maintenance wood siding with vinyl siding.

2. Make it more efficient

Energy conservation features can have a significant impact on home value, depending on what area of the country you’re in, Joanne Theunissen, chair of the National Association of Home Builders Remodelers, said in an email. Energy-efficient mortgages (EEMs) allow borrowers to take on additional debt to cover both the purchase of the home as well as energy-efficient upgrades. EEMs can also offer lower mortgage rates to increase purchasing power, according to Energy.gov.

Consider double-paned windows, enhanced attic insulation, LED lighting and efficient appliances as a way to increase home value and entice energy-conscious buyers.

If you’re willing to go bigger, put solar panels on the roof. Thirty-nine percent of agents surveyed recently by the National Association of Realtors said solar panels increased perceived property value. But since solar panels are a big financial and structural commitment, they only make sense if you’re hoping to increase value over the long term, not looking for a quick boost in resale value.

Schedule an assessment with a certified energy auditor or your utility company to determine where your home is wasting energy and which upgrades will save you the most money.

3. Make it more attractive

Curb appeal — how your home looks from the street — is your first chance to make a good impression, says James Murrett, president of the Appraisal Institute, a professional association for real estate appraisers. A home’s exterior needs to make a prospective buyer want to walk through the front door.

Make sure existing landscaping is well-maintained. If your yard seems dull in comparison with your neighbors, consider planting flowers or repainting the front door.

Once the exterior looks good, focus on the kitchen and bathroom. When these two rooms are outdated, they can keep a property from reaching its highest valuation, Lori Noble, a senior residential appraiser (SRA) in Charleston, West Virginia, said in an email.

And you don’t have to spring for heated towel racks or marble floors, either. A minor kitchen remodel recoups 81% of its cost in added value on average, versus 53% for an upscale kitchen remodel with stone countertops, custom cabinets and commercial-grade appliances, according to Remodeling magazine’s “2018 Cost vs. Value Report.”The same is true for bathrooms; a midrange remodel — new flooring and a few updated fixtures — delivers a 70% return on investment, while an upscale bathroom remodel — heated flooring, custom cabinets and designer fixtures — sees 56% on average.

4. Make it smarter

Safety-enhancing gadgets top the list of “smart” technologies buyers want in their new homes, according to a 2018 survey by Coldwell Banker. These safe and smart devices include thermostats, fire detectors, carbon monoxide detectors, security cameras, door locks and lighting.

While smart tech doesn’t always increase home value, it does add appeal, Tavia Galvin, a licensed Realtor in Arvada, Colorado, said in an email.

Those who see themselves as “techies” are more likely to pay more for these items, Martin said.

Unlike replacing the roof or renovating the bathroom, you can usually install these devices yourself for about $1,000 or less.

5. Make it bigger

“Square footage has a huge impact on value,” Angie Martin, director of operations at Hales and Associates in Overland Park, Kansas, said in an email. Price per square foot is one way she helps clients compare homes that are similar in style and upgrades.

Bigger homes often command higher values, and even if an appraiser doesn’t officially acknowledge the full value of added space, a buyer will likely notice.

Adding a room is the obvious way to make your house bigger, but you can also create additional living space by finishing the basement or building a deck.

How to pay for improvements that increase value

When thinking about how to increase home value, root your expectations in reality. Updates rarely recoup 100% of their cost, but they can make your family more comfortable and even help your home sell faster.

If you can’t pay for home improvements in cash, be sure to choose the right method of financing for you.

Cash-out refinance: This popular refinance option may be a good fit if you want to tap equity but don’t fancy a second mortgage. Of the 36% of homeowners who reported taking a cash-out refinance in the NerdWallet survey, over half (52%) used the funds for home improvements and repairs. A cash-out refinance doesn’t make sense if your equity is limited or current cash-out mortgage rates are higher than your existing rate.

Credit card: Putting home renovations on a credit card may be OK as long as you’ll be able to pay off the entire balance in a short amount of time.

Home equity loan or line of credit: These second mortgages turn your home’s equity into easily accessible funds. Home equity loans pay out in a lump sum while home equity lines of credit, or HELOCs, are a line of financing you can borrow against over time. Both home equity loans and HELOCs have interest rates, fees, monthly payments and tax advantages to consider.

Personal loan: If you don’t have enough equity for a home equity loan or HELOC, consider a personal loan. The interest rate will be higher than home-equity-based financing, but lower than a credit card in most cases.

Being a Homeowner: Pros & Cons

Homeownership has always been part of the American Dream. Because of that, many people accept owning a home as the right, even obligatory thing to do without considering the benefits and the risks. If you are contemplating buying a home, you should know and review the pros and cons of the investment you are about to make—as you would any investment decision—before signing on the dotted line.

Pros:

The Tax Cuts and Jobs Act’s Effect

The Tax Cuts and Jobs Act, passed in December 2017, made substantial changes to the parts of the tax code that have to do with homeownership. Unless a future Congress amends the law, all provisions will expire after Dec. 31, 2025. But for now, changes in that law have reduced the value of owning a home.

The law limits mortgage interest deductions to $750,000 of total mortgage debt, including for a first and second home and any home-equity or HELOC loans. The previous limit was $1,000,000 in mortgage debt plus an additional $100,000 in home-equity debt.

There is an exception allowing $1,000,000 in total mortgage debt if you bought your home on or before Dec. 14, 2017. This provision even applies if you refinance that older mortgage. Home equity loan interest is only deductible if the money is used for substantial improvements to the home on which you took out the loan. Previously, interest on up to $100,000 was deductible no matter how the home-equity money was used.

The law also set the SALT deduction limit to $10,000. Previously, all SALT payments were deductible, unless you were subject to the alternative minimum tax.

Other new provisions include restrictions on claiming casualty losses except for federally declared disasters. The moving expenses deduction no longer exist except for the active-duty military moving for reasons of work.

All these changes have lowered the value of owning a home—including the fact that, with the doubling of the standard deduction (another feature of the Act), fewer people will have enough deductions to file Schedule A instead of taking the standard deduction. So the fact that you are eligible for a tax deduction does not mean that it will end up being useful to you. The severe limiting of the SALT deduction will be particularly detrimental in lowering available deductions for people who live in highly taxed states.

Attractive Long-Term Investment

Appreciation represents the increase in home values over time. Real estate prices are cyclical, and homeowners shouldn’t expect the property’s value to increase drastically in the short-term. But if you stay in your home long enough, there’s a very good likelihood you will be able to sell your home for a profit because of appreciation later in the future.

Despite some dramatic dips, such as that in 2008-10, residential real estate tends to rise in value. According to the Federal Reserve Bank of St. Louis, the average price of sold houses in the U.S. rose from $340,400 in Q3 2014 to $380,300 in Q3 2019—a 10% increase in value over five years. Go back a decade, when the average home fetched $274,100 (Q3 2009), and you have a 28% increase. That’s not a bad return on an investment that also provides you with a place to live.

Consider a home that is rundown and dilapidated to the point that it’s uninhabitable. The land underneath the home may still be worth a significant amount of money—more than the residence, in this case,. A seller may consider selling it as is—with the structure still intact—or spending a little extra to demolish the home and sell the land at a higher price on its own.

Capital Gains Exclusion

Eventually, you will sell your home. When you do, the law allows you to keep the profits and pay no capital gains taxes. Well, not necessarily all the profits. There’s a tax-free profit of up to $250,000 for single homeowners and $500,000 for married couples. This is for your main residence only—not for a second home or vacation property.

There are a few requirements you need to meet in order to qualify for this exclusion. You must own the home for at least two years—24 months—within the last five years up to the closing date. The residence requirement dictates that you should have lived in the home for at least 730 days, or two years, during the five-year period leading up to the sale. The final requirement, the look-back requirement, outlines that you didn’t profit from selling another primary residence during the two-year period leading up to the most recent sale.

Tax Deductions

After appreciation, the benefit of homeownership that is cited most often is tax deductions or savings. When you buy a home, you can deduct some of the expenses of owning that home from the taxes you pay to the government. This includes mortgage interest on both your principal residence and a second home, which can amount to thousands of dollars per year.

Interest on home-equity loans or home-equity lines of credit (HELOCs) is also deductible if the funds are used to substantially improve your home.

You can also deduct up to $10,000 in state and local taxes (SALT), including property taxes.

Home equity represents the difference between how much you still owe on your mortgage and the market price or value of your home. Home equity and appreciation may be considered together. As noted above, your home is likely to grow in market value over time. Your equity also grows as you pay down your mortgage, with less of your payment going toward interest and more toward lowering the balance on your loan.

Building equity does take some time because it takes time to lower the principal balance owing on the mortgage loan—unless, of course, you make a large down payment or regular prepayments. One thing to keep in mind, though, is that the length of time you have your home is a big factor in how much equity you build and the appreciation you can realize. The longer you keep it, the more equity you obtain.

As you pay down your mortgage and reduce the amount you owe, without realizing it, you are saving as the value of your home is increasing—just as the value of savings account increases with interest. When you sell, you will likely get back every dollar you paid out and more, assuming you stay in your house long enough. Over time the average 6% return (interest rate) on your savings should more than
cover your outlay.

Another plus: Home equity provides flexibility to get a loan that is tied to the amount of your home equity. Many investors follow their home equity and home appreciation simultaneously. If an investor believes their home value is greatly appreciating they may put off a home equity loan to have a better opportunity to realize seller’s appreciation.

Cons:

Illiquidity

Unlike stock, which can be sold within a matter of days, homes typically take much longer to unload. The fact that you may have access to $500,000 in tax-free capital gains doesn’t mean you have ready access. Meanwhile, you still must make mortgage payments and maintain the house until you sell it.

High Upfront Costs

The cost of investing in a home can be high—there’s more to your expenses than the property’s selling price and the interest rate on your mortgage. For starters, you can expect to pay anywhere from 2% to 5% of the purchase price in closing costs. Some of the most common closing costs include an application fee, appraisal fee, attorney fees, property taxes, mortgage insurance, home inspection, first-year homeowner’s insurance premium, title search, title insurance, points (prepaid interest), origination fee, recording fees, and survey fee.

Experts say you should plan to stay in your house at least five years to recover those costs.

Pride and Financial Responsibilities

One often-cited benefit of homeownership is the knowledge that you own your little corner of the world. You can customize your house, remodel, paint, and decorate without the need to get permission from a landlord.

Ownership comes with responsibilities, however. You must pay your mortgage or risk losing your home and the equity you’ve built. Maintenance and upkeep are your responsibility. You can’t call the landlord at 2 a.m. to have a leaky water pipe repaired. If the roof is damaged, you must repair it—or have it repaired—yourself. Lawn mowing, snow removal, homeowners insurance, and liability insurance all fall on you.

Potential Depreciation

Not all homes grow in value. The housing crisis of 2008 resulted in many homeowners being underwater, which means owing more on your mortgage than your home is worth. It doesn’t take a housing crisis for home prices to stagnate or drop. Regional or local economic conditions can result in home values that don’t keep up with inflation.

Remember, as well, that the actual structure you live in will depreciate over time. This can be due to wear and tear on the property, or a lack of maintenance and repairs.

The Bottom Line

A home is an investment that comes with many investment benefits but also risks, which makes it an investment that is not for everyone. Weighing the investment benefits against the risks is important. A rational comparison of pros and cons can help you decide whether to put your money into a home investment or potentially find better returns elsewhere.

How to Lower Your Homeowners Insurance Costs

The price you pay for your homeowners insurance can vary by hundreds of dollars, depending on the insurance company you buy your policy from. Here are some things to consider when buying homeowners insurance.

Don’t confuse what you paid for your house with rebuilding costs

The land under your house isn’t at risk from theft, windstorm, fire and the other perils covered in your homeowners policy. So don’t include its value in deciding how much homeowners insurance to buy. If you do, you will pay a higher premium than you should.
Review the limits in your policy and the value of your possessions at least once a year

You want your policy to cover any major purchases or additions to your home. But you don’t want to spend money for coverage you don’t need. If your five-year-old fur coat is no longer worth the $5,000 you paid for it, you’ll want to reduce or cancel your floater (extra insurance for items whose full value is not covered by standard homeowners policies such as expensive jewelry, high-end computers and valuable art work) and pocket the difference.
Shop around

It’ll take some time, but could save you a good sum of money. Ask your friends, check the Yellow Pages or contact your state insurance department. (Phone numbers and Web sites are on the back page of this brochure.) National Association of Insurance Commissioners has information to help you choose an insurer in your state, including complaints. States often make information available on typical rates charged by major insurers and many states provide the frequency of consumer complaints by company.

Also check consumer guides, insurance agents, companies and online insurance quote services. This will give you an idea of price ranges and tell you which companies have the lowest prices. But don’t consider price alone. The insurer you select should offer a fair price and deliver the quality service you would expect if you needed assistance in filing a claim. So in assessing service quality, use the complaint information cited above and talk to a number of insurers to get a feeling for the type of service they give. Ask them what they would do to lower your costs.
Buy your home and auto policies from the same insurer

Some companies that sell homeowners, auto and liability coverage will take 5 to 15 percent off your premium if you buy two or more policies from them. But make certain this combined price is lower than buying the different coverages from different companies.
Make your home more disaster resistant

Find out from your insurance agent or company representative what steps you can take to make your home more resistant to windstorms and other natural disasters. You may be able to save on your premiums by adding storm shutters, reinforcing your roof or buying stronger roofing materials. Older homes can be retrofitted to make them better able to withstand earthquakes. In addition, consider modernizing your heating, plumbing and electrical systems to reduce the risk of fire and water damage.
Improve your home security

You can usually get discounts of at least 5 percent for a smoke detector, burglar alarm or dead-bolt locks. Some companies offer to cut your premium by as much as 15 or 20 percent if you install a sophisticated sprinkler system and a fire and burglar alarm that rings at the police, fire or other monitoring stations. These systems aren’t cheap and not every system qualifies for a discount. Before you buy such a system, find out what kind your insurer recommends, how much the device would cost and how much you’d save on premiums.
Seek out other discounts

Companies offer several types of discounts, but they don’t all offer the same discount or the same amount of discount in all states. For example, since retired people stay at home more than working people they are less likely to be burglarized and may spot fires sooner, too. Retired people also have more time for maintaining their homes. If you’re at least 55 years old and retired, you may qualify for a discount of up to 10 percent at some companies. Some employers and professional associations administer group insurance programs that may offer a better deal than you can get elsewhere.
Maintain a good credit record

Establishing a solid credit history can cut your insurance costs. Insurers are increasingly using credit information to price homeowners insurance policies. In most states, your insurer must advise you of any adverse action, such as a higher rate, at which time you should verify the accuracy of the information on which the insurer relied. To protect your credit standing, pay your bills on time, don’t obtain more credit than you need and keep your credit balances as low as possible. Check your credit record on a regular basis and have any errors corrected promptly so that your record remains accurate.
Stay with the same insurer

If you’ve kept your coverage with a company for several years, you may receive a special discount for being a long-term policyholder. Some insurers will reduce their premiums by 5 percent if you stay with them for three to five years and by 10 percent if you remain a policyholder for six years or more. But make certain to periodically compare this price with that of other policies.
Look for private insurance if you are in a government plan

If you live in a high-risk area — say, one that is especially vulnerable to coastal storms, fires, or crime — and have been buying your homeowners insurance through a government plan, you should check with an insurance agent or company representative or contact your state department of insurance for the names of companies that might be interested in your business. You may find that there are steps you can take that would allow you to buy insurance at a lower price in the private market.
When you’re buying a home, consider the cost of homeowners insurance

You may pay less for insurance if you buy a house close to a fire hydrant or in a community that has a professional rather than a volunteer fire department. It may also be cheaper if your home’s electrical, heating and plumbing systems are less than 10 years old. If you live in the East, consider a brick home because it’s more wind resistant. If you live in an earthquake-prone area, look for a wooden frame house because it is more likely to withstand this type of disaster. Choosing wisely could cut your premiums by 5 to 15 percent.

Check the CLUE (Comprehensive Loss Underwriting Exchange) report of the home you are thinking of buying. These reports contain the insurance claim history of the property and can help you judge some of the problems the house may have.
Raise your deductible

Deductibles are the amount of money you have to pay toward a loss before your insurance company starts to pay a claim, according to the terms of your policy. The higher your deductible, the more money you can save on your premiums. Nowadays, most insurance companies recommend a deductible of at least $500. If you can afford to raise your deductible to $1,000, you may save as much as 25 percent. Remember, if you live in a disaster-prone area, your insurance policy may have a separate deductible for certain kinds of damage. If you live near the coast in the East, you may have a separate windstorm deductible; if you live in a state vulnerable to hail storms, you may have a separate deductible for hail; and if you live in an earthquake-prone area, your earthquake policy has a deductible.

Homeowner Tricks: Save Money on Mortgage Payments

Whether you’re new to homeownership or have been making mortgage payments for years, it never hurts to find ways to slash your costs. Here are three tips that can help you save thousands.

1. Pay your mortgage every two weeks instead of once a month

The typical 30-year loan comes with 360 payments, or 12 payments per year. But if you take your monthly payment, divide it in two, and pay that amount every two weeks, you’ll wind up making the equivalent of one extra monthly payment each year while saving yourself a huge chunk of interest in the process. And that single extra payment won’t hurt much, unlike a big lump-sum payment, especially if you work your new payment schedule into your monthly budget.

Say you’re looking at a 30-year, $200,000 mortgage at 4%, which would normally translate into 360 monthly payments of about $955 each, or roughly $11,460 a year. If you were to switch to a biweekly payment schedule, you’d pay $477 every other week, or roughly $12,400 a year. But in doing so, you’d actually save yourself over $23,000 in interest over the life of your loan.

2. Refinance to a shorter term

One drawback of refinancing a mortgage is that it often resets the clock on your repayment schedule, which can not only cost you more money than necessary in interest, but drag out the repayment process so that you’re less likely to have shaken your housing debt by the time you retire. For example, say you’ve been making payments on a 30-year loan for five years, and then you refinance to another 30-year loan at a more favorable rate. While you’ll lower your monthly payments, you’ll also be five years older when you finally get that mortgage paid off.

On the other hand, if you refinance to a shorter term (say, from a 30-year loan to a 15-year loan) to take advantage of a more favorable rate, you’ll save money on interest and avoid extending the amount of time you’re saddled with mortgage debt. Of course, this strategy only works if you can actually afford a larger monthly payment. (Remember, while you’ll benefit from a lower interest rate, your actual payment will still be higher if you switch from a 30-year loan to a 15-year mortgage.) But if your earnings have increased substantially since you first signed your loan, and you have room in your budget for higher monthly payments, you’ll come out ahead in the long run.

Homeownership is an expensive prospect, so it pays to take steps to lower your costs. These tricks will help you spend less on your mortgage and keep more of your money where it belongs — in your pocket.

3. Accelerate a 30-year loan when you can’t afford a 15-year term

One major advantage to getting a 15-year mortgage, as opposed to a 30-year loan, is that you’ll generally be eligible for a much lower interest rate. For example, last week, 30-year fixed mortgage rates averaged 3.97%, while 15-year fixed rates averaged 3.23%. The downside, however, is that because you’ll be paying off your loan in half the time, despite the lower interest rate, your individual monthly payments will be considerably higher.

If you’re looking to benefit from some of the interest savings of a 15-year loan but are afraid to commit to a more sizable monthly payment, a good solution is to get a 30-year loan and simply pay it off faster. You can accomplish this by doubling your monthly mortgage payment when you have extra cash available or by making extra lump-sum payments toward your mortgage as you’re able.

Say you have a 30-year, $200,000 fixed mortgage at 4% interest, and you use a performance bonus you receive at work to make a $5,000 payment toward your mortgage during the second year of your loan. That move alone will save you close to $10,000 in interest and shave more than a year off the life of your loan.

If you want to attempt to pay off your mortgage early, just make sure your loan doesn’t come with prepayment penalties. Otherwise, you’ll be charged a fee for the privilege of wiping out your mortgage debt sooner.

Our Most Essential Homeowner Tips

Congratulations! You’ve just purchased your first home. Buying a home is a smart investment and offers a lot of benefits for you and your family. But owning a home also comes with a few disadvantages, like not being able to call your landlord when something goes awry.

But don’t worry. We have some homeowner tips and tricks that will help you prepare for those surprises and maybe even save you a few dollars down the road.

Use these new homeowner tips to make your transition to property owner a little smoother.

1. Invest in New Tools

Now that you’re a homeowner, it’s time to get yourself a toolbox. From measuring for a new couch to hanging curtains and photographs, you’re going to need tools even if you’re not planning any big DIY projects.

Best tools for new homeowners:

Ladder
Measuring tape
Hammer
Stud finder
Electric drill

Owning these tools will make following the rest of these new homeowner maintenance tips easier.

2. Create a Homeowner’s Binder

You may have noticed during the purchasing process that there is a lot of paperwork involved in owning a home. Before you move into your new home, create a binder for important documents, such as mortgage and home insurance paperwork.

After your move in, use the same binder to store all of the guides and warranties for your new appliances. Store receipts for any home improvement and moving expenses here as well. You’ll want to hang on to these for your taxes. You can also start collecting contact information for reliable contractors in this binder.

3. Wait to Start Any Large Projects

One thing every homeowner should know: home improvement projects are expensive. Avoid completing unnecessary projects. Unless your new home is not livable, hold off on any major construction projects until you’ve lived in the home for at least six months.

Waiting a few months to make any huge changes will allow you to get a feel for your home and put your priorities in order. After a few months, you may learn that the floor plan doesn’t bother you as much as expected, but you’ve discovered you can’t live with the current bathroom configuration. Waiting will also give you time to save for the cost of any upcoming projects.

It is a good idea to complete small projects such as painting or removing carpet before moving into your new home.

4. Pay Attention to Your Energy Usage

Owning a home means paying your own utility bills. Pay attention to how your home is using energy and use the information to reduce your carbon footprint and save money. You’ll be surprised how small changes can affect your electric bill.

Homeowner tips and tricks for reducing your energy costs:

Move your refrigerator away from your oven.
Schedule a home energy audit.
Lower your water heater’s thermostat to 120 degrees.
Switch out lightbulbs for energy-efficient LED lightbulbs.

5. Learn How to Identify Potential Issues in Your New Home

One of the best homeowner maintenance tips is to detect minor problems before they become huge issues. After purchasing your home, take some time to learn about some of the common issues homes face, especially if you’ve purchased an older home or one that was unoccupied for a period of time. Being able to identify a potential problem early on could save you money later.

Learn to recognize:

Basement leaks and flooding.
Signs of a roof leak.
Foundation issues.

If you can catch these issues early, you can prevent further damage to your home and save yourself a lot of headaches.

6. Start an Emergency House Fund

You never know when something is going to go wrong, or how much it is going to cost. A great homeowner tip is to start an emergency savings account as soon as possible.

The longer you live in your home, the more likely you are to experience a surprise plumbing, heating or roofing issue. Start saving early to take a little stress out of this typical homeowner experience.

7. Make Friends With Your Neighbors

As many homeowners know, having bad neighbors can make your living situation less than pleasant. Work to be a good neighbor right away by introducing yourself and making friends as soon as you move in. Building a relationship with your neighbors will help you learn about your neighborhood, find reliable contractors and maybe even allow you to borrow tools when you need them.

Knowing your neighbors will also make it easier to address any issues that arise later, such as property line or noise concerns.

8. Change Your Air Filter Regularly

This probably sounds obvious, but it is an often overlooked homeowner maintenance tip. When you move into your home, change your air filter right away. Mark the date on your calendar and change it every 90 days moving forward. Consider changing it every 60 days if you have pets or if you suffer from allergies.

Changing your air filter not only helps keep your air clean, but it also reduces dust in your home and extends the life of your furnace.

9. Know How to Turn Off Your Water Valve

Picture this: You wake up in the middle of the night to find a busted pipe filling your basement with water. It takes you five minutes to locate your main water valve and two more minutes to turn it off. That’s seven additional minutes of water flowing into your basement.

It’s a good idea to locate this valve when you move in and learn how it works to save yourself time during an emergency. Learn how to shut off your power and gas lines while you’re at it.

Another homeowner tip is to turn off your main water valve whenever you leave on vacation. This will prevent flooding if something should go wrong when you are out of town.

10. Complete One Project at a Time

Don’t work on multiple home projects at once. You may want to get all your improvements finished as soon as possible, but this isn’t the answer. Not only will you exhaust your finances, but you will also make your new home unlivable and add unnecessary stress to your everyday life.

Instead of starting all your projects at once, learn how to plan a home remodel that won’t make you miserable.

Property Tax Exemptions

FHA Rehab Loans

Basic Requirements

Home Improvement Programs