Now that I am hopefully getting into the world of home ownership, I’m starting to look for all the ways that owning a home can save me money. There are some big expenses that come along with home ownership (like repairs and renovations) but hopefully I can offset those expenses with some of these money saving techniques.
Save Money on Taxes
Politically I’m not a fan of social engineering via tax loopholes, but as a responsible financial adult I’m going to do whatever I can to reduce my tax burden. Owning a home is one of the best ways to do that. Laws may change, but as of today any interest I pay on my home mortgage can be deducted, as well as the property tax I’ll be paying every year. In my first year of home ownership I expect to pay over $10,000 of taxes and interest combined, meaning it will reduce my taxable income substantially.
Build Equity In the Home
My mortgage will be about $730 a month. When I make my first payment $245 of that will be applied to the principal of the loan, meaning my debt decreases (and my net worth increases). Today I write a rent check and I’ll never see 100% of that money again. At least when I’m making a mortgage payment I’ll see a decent portion of that payment go directly towards equity in my home.
Get Insurance Bundle Deals
I’m currently shopping for homeowners insurance and every quote I’m getting is a home/auto bundle deal. It sucks that homeowners insurance is expensive, but at least it might make your auto insurance cheaper. I can’t do much about lowering my mortgage or property tax, but with a little bit of shopping for car and home insurance I can save myself a little bit of money. Tip: you may be able to get the same bundle deals as a renter if you purchase renter’s insurance.
Unfortunately I’m new to this whole home ownership thing and I don’t have a lot of great insight because I won’t even close on my house until December, and that’s only IF the financing goes smoothly. Do any experienced home owners out there have tips on other ways homeowners can save money?