As an owner, you are always looking for ways to save money and reduce costs. The same can be said about insurance on your property. Take advantage of 7 ways to save money as a homeowner, including refinancing a mortgage. (iStock)
As an owner, you are always looking for ways to save money and reduce costs. This may be even more true due to the disturbance in the economy and the widespread unemployment caused by the coronavirus pandemic.
If you are looking for ways to cut costs and keep your home costs low, then you should use an online marketplace like Credible. Credible can share tips that will save you time and money. Start by comparing mortgage rates to see if you can cut your costs.
How to save money as an owner
Check out these seven ways to save money as a homeowner, including taking advantage of current low mortgage refinancing rates.
- Take advantage of refinancing rates
- Review your home insurance policy
- Increase your franchise
- Shop around
- Consider grouping policies
- Try to improve your credit score
- Make sure you are not underinsured
1. Take advantage of refinancing rates
Interest rates remained low for almost a year due to COVID, which fueled substantial mortgage refinancing activity. However, as current political and economic factors evolve, Freddie Mac is reporting a fluctuation in rates. Even so, the Federal Reserve expects rates to remain relatively low for some time as the economy continues to recover.
Use Credible’s free online tool to easily compare multiple mortgage lenders and see prequalified rates in just three minutes.
Current rates (as of February 11, 2021):
- 30-year fixed rate mortgage (FRM): 2.73%
- 15-year FRM: 2.29%
- 5/1 year adjustable rate mortgage (ARM): 2.79%
You can consider refinancing if your current home loan comes with high interest and monthly payments that exceed your monthly budget. Or you may want to change your mortgage company, get rid of your private mortgage insurance (PMI), or use your home equity to finance a major purchase or renovation project.
To refinance with the best rates, you will need at least 10-20% of the equity in your home, a steady income and a good credit score. The refinancing closing costs can vary from 3 to 6% of the loan amount. This means that you can pay up to $ 6,000 in a $ 200,000 refinance. To find out if refinancing a mortgage is right for you, use Credible’s mortgage calculator to see how much you can save.
HOW TO DECIDE IF YOU SHOULD REFINANCE YOUR MORTGAGE
2. Review your home insurance policy
To cover home insurance costs, you must own a home. But as home insurance premiums have increased by almost 6% since 2018, according to the NAIC 2019 Insurance Department Resources Report, homeowners are looking for ways to cut costs on their insurance and save money over time.
Many insurers offer discounts. You can qualify for a discount if you keep your policy with the same insurer for at least three years, pay your premium annually (instead of quarterly), update windows and insulation, add a security system, fire extinguishers and smoke detectors , or even making energy efficiency updates.
Credible can help you choose your insurance. Click here to compare multiple home insurance quotes in minutes, through Credible partners, to potentially save your money.
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3. Increase your deductible
While you should never have a higher deductible than you can afford out of pocket, it is not uncommon to see your premiums decrease when you increase your deductible. Just increasing your deductible by $ 1,000 can save up to 25% on your premiums, according to the Insurance Information Institute.
4. Shop around
If you have taken advantage of the discounts available through your current insurer, you may want to check with other insurers to make sure you are getting the best rate. It is easy to compare mortgage lenders and get a quote in just minutes at Credible.
But cost is not the only thing to consider. Make sure you are comparing apples to apples and getting the same coverage as your current policy. So, if you find a better rate, see if your current insurer can reach or beat it.
THE 5 MAIN QUESTIONS ABOUT MORTGAGE REFINANCE ANSWERED
5. Consider grouping policies
Most insurers offer better rates for the home and car insurance package. Generally, if you group your insurance policies with the same insurer, you will probably have only one deductible, which may, but not always, be less than if you did not group.
If you want to see what kind of insurance options there are, go to Credible. Credible makes it easy to compare quotes, saving time and money.
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6. Try to improve your credit score
In most states, your credit score affects the cost of insuring your property. How much you save will vary from one insurer to another and is usually a factor when setting your rates. It is not uncommon that the higher your score, the better the overall insurance costs.
Enter your estimated credit score into Credible’s free online tools to determine what refinance rates you would qualify for on a new home loan.
7. Make sure you are not underinsured
While you want to explore all the options available to reduce your home’s insurance policy, you don’t want to cut costs so much that you don’t have enough insurance. There are no standards required by the state for homeowner’s coverage, but having insufficient insurance can make you liable for a significant amount if your home is badly damaged or if you need to rebuild it.
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