Paying for all your housing expenses can be overwhelming sometimes. From utilities to repairs to mortgage payments, expenses add up. Thinking about specific ways to lower costs can make a big difference in improving your monthly finances.
House Hack
House hacking is real-estate term for renting out part of your property or other properties to tenants. With the income from their rent money, you’re able to pay off your mortgage. House hacking is one of the simplest and most effective ways to cut housing expenses.
It can be especially effective if your home has a separate mother-in-law home or even a basement suite. While it may be slightly uncomfortable for a couple years, choosing to rent out the upper portion of your home while you and your family live in the basement or vice versa can make a big difference in lowering costs.
Refinance Your Mortgage
Refinancing your mortgage is another good option when it comes to lowering costs. Specifically, you can lower your monthly mortgage payment through a refinance if you’re currently paying a high interest rate. But, because refinancing is quite a process, the rule of thumb is that you shouldn’t refinance unless you can reduce your interest rate by 2 percent. But if you can, go for it!
When it comes to refinancing, you typically start by checking your credit. If your credit has improved since you first took out your loan, your likelihood of finding a better rate goes up. You’ll then want to spend some time figuring out your target rate and shopping around for different lenders who fit within that range.
Consider Moving
While moving may initially seem like a massive change to make when it comes to cutting housing expenses, it can actually be a great way to cut costs. In all reality, where you live has a huge effect on how expensive your expenses are.
In the long-run, choosing to move to a different state could save you hundreds of thousands of dollars from purchasing a home to paying utilities to paying for everyday living expenses.
Housing expenses can eat up a big portion of your paycheck each month. Figuring out how to lower those costs can sometimes seem difficult when mortgage rates seem set in stone or when making big life changes seems out of the question. But when you really start to crunch the numbers, making some of the changes talked about in this article can result in a lot more money in your bank account than buried in your house.
For more financial tips, schedule an appointment with Mike today!
