Home value can be affected by factors beyond your control, but you can still manage the ongoing costs of homeownership. These include:
Mortgage payments: Choosing a longer mortgage repayment period (30 years instead of 15 years, for example) yields smaller monthly payments. So does a bigger down payment. After you purchase a home, you may be able to reduce payments by refinancing or negotiating a lower tax assessment.
Insurance: Compare homeowners insurance rates from different insurers to find the best price and coverage. Choose a policy that’s tailored to your needs rather than simply picking standard coverage. Buying homeowners insurance from your current auto insurance company may earn you a discount. Some home improvements, like a new roof or security system, may also yield lower insurance premiums.
Utilities: Stop energy waste by boosting home efficiency. Make your energy bills more affordable by switching to LED lightbulbs, properly insulating or replacing old appliances with energy-efficient ones, for example. If you’re not sure where to start, ask your utility provider about a home energy audit.
Mortgage insurance: Private mortgage insurance, or PMI, is typically required for conventional loans when the down payment is less than 20%. You can ask your lender to remove PMI as soon as you reach an 80% loan-to-value ratio, and making additional loan payments will get you to the sweet spot sooner. Also, if you think your home’s value has increased substantially since you bought it, you can pay for an appraisal to see if you’ve achieved 20% equity. If so, you may be able to refinance and cancel PMI. If you have an FHA loan with mortgage insurance, cancellation is still possible but may have different requirements. Talk with your lender to explore your options.
Home improvements: Repairs and upgrades can increase your home’s value, and choosing DIY home improvements can help reduce costs. Smaller projects, such as a minor kitchen remodel or a new front door, often have the best return on investment.