How You Can Lower Your Housing Costs
The government recommends that your mortgage payments, taxes, insurance, and utilities take up no more than 30-percent of your gross income. Where some seniors are running into problems is when they retire and have to switch to a fixed income that doesn’t match their previous earnings.
You might remember the days when housing costs only totaled 25-percent of your income. Those days seem to be long gone according to a recent census report. The Census Bureau found that over one-third of all homeowners had mortgages totaling 30-percent or more of their yearly income. A staggering 7.5 million Americans had house payments that ate up half of their yearly take home— or more. *
The government recommends that your mortgage payments, taxes, insurance, and utilities take up no more than 30-percent of your gross income. Where some seniors are running into problems is when they retire and have to switch to a fixed income that doesn’t match their previous earnings. Some retirees are finding that housing costs have risen beyond their expectations dashing their dreams of relocating.
You may not have any control over the housing market, but there are other ways to save:
Refinance. If mortgage payments are your main issue it may be time to refinance. A lower interest rate offers monthly savings although you will be required to spend some money upfront. If you plan on staying in your home for several years then refinancing could give you the relief you seek.
Reassess. Recent ups and downs in the housing market mean the value of your home may have declined. While this sounds like bad news it can be beneficial if you believe the decline happen after your last property tax assessment. Your county office likely has a form you can fill out to get the reassessment started. Reassessing could have a negative effect as well so, be certain to research home prices in your neighborhood before you proceed.
Retrench. Also known as downsizing, many couples decide to pare down their belongings and move into a smaller home. Retrenching can allow you to move into a nicer area then you normally could afford. Smaller homes are also much easier to maintain and repair. Savings in the form of lower utilities and better home insurance rates will put even more money back into your pocket.
Reduce. Speaking of utilities, one way to save on housing is to lower other costs like heating, electricity, and cable. Weatherproofing, lowering your hot water temperature, and installing a digital thermostat can yield noticeable utility savings. Have your HVAC serviced regularly and consider replacing inefficient appliances with energy star items. Old fashioned conservation will make a dent as well. Turn off lights when not in use and rethink your cable, internet and phone utilities.
