Home Costly Home

Take inventory and look for ways to cut the fixed costs of homeownership

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As a homeowner, hopefully you haven’t been swept up in the subprime tide that’s hit the housing market. But because the flagging economy is impacting everyone to some extent, you may be looking to cut expenses. The reality is that there are certain unavoidable costs that come with owning a home, but if you take a moment to analyze the money you’re spending, you’ll likely be able to squeeze out some extra cash to use elsewhere.

Tip 1: Consider refinancing.
If your adjustable-rate mortgage reset at a high interest rate, note that average rates for 30-year fixed conforming loans are now around 6%. As a starting point use the refinance calculator on Bankrate.com (www.bankrate.com) to see if it makes economic sense for you to refinance.

Tip 2: Protest your property taxes.
Local property taxes may have been set when the market was at its peak. Now that prices have fallen, protest your rate and potentially save thousands a year. For $6.95 you can order the booklet How to Fight Property Taxes from the National Taxpayers Union (www.ntu.org) for more guidance.

Tip 3: Check your PMI.
If you put less than 20% down on your home, you’re likely paying private mortgage insurance every month. But if the equity in your home has since risen above that 20% mark, you may no longer need to pay it.

Tip 4: Secure your home.
Sensible moves such as installing deadbolts, fire alarms, and setting up a security system can cut your home insurance bill by 5% for each item, depending on the company.

Tip 5: Raise your home insurance deductible.
Boosting your deductible by $1,000 can save you around a quarter of your monthly premiums, according to insurance information Website Insure.com.

Tip 6: Downsize. Empty-nesters don’t need that five-bedroom McMansion anymore, along with all its taxes and upkeep. Hold on to the memories, but sell the home. Get a more manageable condo, and pocket the difference.

Tip 7: Learn basic home-reno skills. Home Depot and Lowe’s offer all manner of workshops for do-it-yourselfers. Take them, and save the expense of calling a plumber or handyman. Visit www.homedepotclinics.com and the “Projects and Video Center” section on the Lowe’s Website, www.lowes.com, for more information.

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