This time of year, we all start setting goals for ourselves for the upcoming year. Some of us may vow to get in shape, eat healthier, improve our financial situation, or go back to school. These are all good goals to set for yourself. As a homeowner, you may want to achieve some other tasks this year. Here are some New Year’s resolutions for homeowners to consider…
- Make 1 extra mortgage payment each year. Surprisingly, just making 1 extra payment can make a drastic difference in the amount of time it takes to pay off your mortgage and the amount of money you end up paying. Consider putting a few dollars aside each week to make that 13th payment this year, and watch the principle start to dwindle. “The more payments you make in a shorter period of time, the less you end up paying in the long term, and the faster you’ll get rid of your mortgage,” says Ronit Rogoszinski, wealth advisor. “If you can put aside a couple of dollars every week and then end up plugging it into your mortgage, that’s awesome.”
- Pay off a second mortgage. As that tax refund rolls in, think about putting it toward that home equity loan. It’s easy to spend any extra income on other things, but if you can get your second mortgage paid off, you will have that money available each month! With current low interest rates, it may not seem to be much of an issue if your rate is variable. However, rates can rise at any time which will make that loan payment skyrocket.
- Refinance your mortgage. Check on current interest rates and see if refinancing would be beneficial in your situation. It’s especially a good idea if you can get out of a variable rate mortgage. “If you have a variable mortgage, absolutely try to make it fixed,” Rogoszinski says. “If that’s the only thing you do in the new year, then right there, you’ve done yourself a favor.” Even a slightly higher fixed rate payment will end up being a good move in the long run.
- Fight your property tax assessment. Be sure to carefully review your tax assessment and compare to home values in your area. If you believe your assessment is too high, you can fight it and possibly save hundreds of dollars. You may want to ask a real estate agent to assist you by gathering comps nearby. It might require a little bit of work, but if you are saving money, it will be worth it!
- Check on homeowner’s insurance discounts. Did you make improvements to your home last year like a new roof or updated electrical? If so, you may be eligible for some insurance discounts. Call your insurance agent for more information on this.
- Pay your mortgage payment and all other bills on time. Falling behind on your bills may result in a lower FICO credit score. It’s always a good idea to stay current if possible. The longer you go paying your bills on time, the better your credit score will be. Maybe you have struggled with this in the past, but heading into a new year is a great time to correct your bad habits. If you use online bill pay, it is very easy to set up automatic payments which will keep you from being late due to forgetfulness.
Now is the time to declare those resolutions and make this year the best one yet!