Cut Your Monthly House Payment With These Tips

Housing prices, which surged sharply in 2020 and 2021, show no sign of falling back. Affordability is a problem for many buyers, but there are some ways to shave down that big monthly payment.

The root of the problem, according to a recent analysis by the National Association of Realtors, is an acute shortage of homes for sale. Contractors just aren’t building enough new housing units to meet all the demand. And, as you may recall from your high-school economics class, when demand exceeds supply, prices often rise.

Depending on where you live, last year’s price hikes ranged from, “Wow, that’s a lot,” to an eye-popping, “Who can afford that?” Housing analyst Redfin reported that, in Seattle more than 4,658 homes sold for at least $100,000 more than their listing price in the first six months of 2021 compared to just 378 homes a year prior.

Trying to fit a larger mortgage into your budget can be tough, but there’s one place where you can save. Remember that your monthly payment isn’t all mortgage — it’s PITI (Payment, Insurance, Taxes and Interest). You can’t do much to lower the payment, but buying in a district with lower property taxes can help, and smart shopping can help you lower your interest charges and home insurance costs.

While there are many ways to lower your insurance expenses, some aren’t very desirable. Here are some dos and don’ts when it comes to your homeowners policy — and one “maybe.”

DON’T

·      Don’t settle for less coverage than you need. Consider the house itself along with the contents and any planned upgrades. If you’re buying new furniture, that needs consideration too.

·      Don’t choose a poorly rated insurer. Insurer ratings typically reflect the assets the carrier has to settle claims. But there are other criteria to consider, such as how often they deny claims and how quickly they pay. Your local We Insure agent can guide you toward top-rated insurers.

·      Don’t confuse market value with insured value. The market value of your home is what it would sell for. If your house is destroyed, what you need from your insurer is enough to rebuild, which may be more OR less than the market value.

·      Don’t set it and forget it. Review your policy each year. Or call your local We Insure agent for a complimentary homeowners insurance review.

·      Don’t fail to consider flood insurance. Floods cause an estimated $6 billion in damage in the U.S. each year. Evaluate your flood risk and insure appropriately.

MAYBE

·      You could consider raising your deductible. A higher deductible will usually decrease your premium, but be sure you can afford to pay it in the event of a claim.

DO

·      Do bundle coverage. Consolidating home, auto, life and other insurance coverage with one carrier can help you save significantly. Your We insure agent can help you.

·      Do make sure you’re getting every discount you qualify for. Discounts vary among insurers, but additions like a security system, a new roof and stormproof windows and doors can cut your payments.

·      Do maintain good credit. A better credit score usually qualifies you for a lower premium.

·      Do shop around. Insurers are constantly adjusting rates, adding or subtracting discounts, modifying their geographic preferences and making other changes.

Your local We Insure agent can give you a fast and free, apples-to-apples competitive quote for homeowners insurance from an assortment of top-rated insurers in your area. They can help determine what coverage you need and the potential discounts you may be entitled to.

Don’t be discouraged in your hunt for a new home. It may take a while to find the right house at the right price, but when you find something that’s a good fit for your needs and budget, talk to your local We Insure agent. You may be surprised by the money-saving ideas they can bring to the table.

Sources

https://cdn.nar.realtor/sites/default/files/documents/Housing-is-Critical-Infrastructure-Social-and-Economic-Benefits-of-Building-More-Housing-6-15-2021.pdf

https://www.redfin.com/news/seattle-homes-sold-above-list-price/

https://www.usatoday.com/story/money/economy/2018/07/24/worst-floods-in-american-history/37070093/