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Saving on Real Estate Costs Amid High Interest Rates: Tips from Journalist Mariana Coelho Dias
High interest rates are causing a burden for many families looking to purchase property, but there are strategies to help reduce costs. In this article, we'll explore the advice of journalist Mariana Coelho Dias, who specializes in real estate cost reduction strategies.
One of the key methods she suggests is renegotiating mortgage terms. This can involve seeking a lower interest rate through refinancing or obtaining discount points to reduce the rate permanently. Even a small reduction in interest rate can lead to significant savings over the life of the loan. For example, on a $300,000 30-year loan, a 0.5% reduction in interest rate can save over $5,500 in the first five years and nearly $33,000 in total[1][2].
Another strategy is amortizing strategically. By choosing an amortization schedule carefully, payments can be spread out more effectively, helping to manage monthly liabilities. Extending the amortization period can lower monthly payments, although it may increase total interest paid; paying down the principal faster, on the other hand, reduces overall interest costs. Adjustable-rate mortgages (ARMs) may also offer lower initial rates that can be beneficial in certain market conditions[2].
Reviewing homeowners insurance is another crucial aspect to consider. Regularly reviewing insurance policies allows homeowners to adjust coverage to reflect their true needs and market conditions, potentially lowering premiums. Given that insurance costs have been rising due to inflation, claims, and natural disasters, reviewing policies can help avoid overpaying. Renegotiating coverage terms, increasing deductibles, or shopping multiple insurers can all reduce premium costs[3][4].
In subsequent articles, Mariana Coelho Dias may delve into the importance of reviewing insurance policies in real estate, the benefits of amortizing a mortgage in more detail, and the impact of high interest rates on families. By combining mortgage renegotiation, optimized amortization strategies, and proactive insurance reviews, homeowners can mitigate the compounded financial impact of high interest rates and rising insurance premiums in real estate purchases.
[1] Source for mortgage savings calculation: https://www.myfico.com/credit-education/mortgages/mortgage-refinance/how-much-can-i-save-refinancing-my-mortgage
[2] Source for amortization and ARM information: https://www.investopedia.com/terms/a/amortization.asp
[3] Source for insurance cost information: https://www.iii.org/fact-statistic/facts-statistics-homeowners-and-renters-insurance
[4] Source for insurance review tips: https://www.iii.org/article/homeowners-insurance-how-to-shop-for-it-and-save-money
Financial strategists, such as journalist Mariana Coelho Dias, suggest amortizing strategically to effectively manage monthly liabilities and lower overall interest costs. Furthermore, reviewing homeowners insurance policies regularly can help homeowners adapt their coverage to their true needs and market conditions, potentially leading to lower premiums.
