California Housing Isn’t Cheap. How to Afford Your Golden State Mortgage

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If you enjoy long walks down the Target home-goods aisle and spend your weekends removing shrubbery, you might be a homeowner.

If you do so while evacuating from wildfires, dodging earthquakes and paying 2018 prices for houses built in 1908, you’re definitely a California homeowner.

As Mark Twain — might’ve — said: “The coldest winter I ever spent was a summer in San Francisco.”

The feeling of buying your first home is draining to both your energy and your bank account. The house alone is a huge expense, and something unexpected comes up all. the. time.

That feeling is multiplied tenfold if you live in California.

How to Afford Your California Mortgage

Prices were high, even in 1981, when mortgage refinancing expert Casey Fleming bought his first house in Silicon Valley.

“To buy my first house, I brought lunches from home, never ate out, lived at my parent's house for a year or so and then borrowed money from my sister to get in,” he says. “Once in, I could not imagine how I was going to make my house payment.”

Little has changed. The struggle to afford all the little things that come with homeownership is REAL. Thankfully, you have some money-saving tricks up your sleeve you might not realize.

And none of them include giving up burritos at your favorite taqueria.

1. Get Paid to Turn off the Lights

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Another easy way California residents can earn extra money is by syncing your utility account to an energy-sharing program called OhmConnect and agreeing to help reduce energy usage by about an hour a week.

By cutting your electricity use, you help keep demand low and prevent unclean power sources from kicking in. So you’re earning money while helping the planet — not bad!

You’re eligible for the program is you use PG&E, SDG&E or Southern California Edison.

OhmConnect’s currently offering a $10 bonus for new users who connect their utility accounts. Plus, you can bank an extra $20 referral bonus for each friend you get to sign up.

That’s enough to merit at least one celebratory acai bowl.

2.  Get Cheaper Insurance

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Insurance is one of those things you get and forget. There are so many different types it’s hard to keep track of them and if you don’t keep up, they’ll quietly increase every year.

But you can do a lot of things — ranging from easy to extreme — to keep all your rates low.

When California homeowner Adrienne Fuller wanted to lower her car insurance rate, she took the extreme route and sacrificed her car.

“I had a newish Audi A3, and we sold it and got an older, used VW Golf,” she says. “Not as fun as an Audi, but more or less the same car, and it saves us a ton on insurance.”

If you need something a little easier to start out with, compare rates with Gabi.

Gabi says it finds an average savings of $720 per year for its customers.

It is a true apples-to-apples comparison at the same coverage levels and deductibles you currently have. Once you sign up, you never have to shop again. Gabi's software has your policy on file and keeps on monitoring for savings as your life changes.

For an easy way to compare rates on homeowners insurance, check out Lemonade.

Though life might hand you lemons, Lemonade gives you homeowners insurance starting at $25 a month.

Beyond a punny name and affordable rates, Lemonade is a certified B-Corp, which means it’s got the form of a business and the soul of a nonprofit.

Instead of profiting extra when it doesn’t have to pay out claims, the company keeps a set 20% of your premium for itself, and 80% goes into a pool for paying claims. Money left over after paying claims each year goes to a cause of your choice.

That means that even though rates are low, Lemonade doesn’t skimp when you need it most.

3. Reduce Your Credit Card Interest

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If credit card debt is giving you June Gloom all year long, try consolidating it.

A good resource is consumer financial technology platform Even Financial, which can help match you with the right personal loan to meet your needs.

Unlike traditional debt consolidation that just combines your debts and doesn’t decrease the interest rate, a loan from Even Financial matches you with a new loan like refinancing.

Pro tip: If you don’t get an interest rate you like, head over to Credit Sesame to get your “credit report card” and see what you can do to increase your credit score to qualify for a better rate.

4. Pay Less for Your Student Loans

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For some, a lower interest rate could be one of the best steps to paying off student loans.

Try getting a lower interest rate on your federal and private loans by refinancing with a company like Credible. Other companies offer similar services, but we like that the average Credible user saves about two interest points on their current federal loans.

Refinancing will generally mean replacing your laundry list of loans with one (or a few) loans that bring all of your student debt under one umbrella.

This could simplify your life with one monthly payment, instead of several. It may also lower your monthly payment, improve your interest rate and/or give you more time to pay.

It might seem like a small difference, but a lower interest rate can mean a lot of savings over time. It’s helping grad Ashley Williams save more than $18,000 in interest over the life of her loan!

5. Cash in on Your Spare Room

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You know what’s better than making extra money with a side hustle? Making extra money from things you already have — with little to no extra effort.

If you’ve got a mortgage, then surely — hopefully — you have a house. And that house probably has a guest room that sits empty most of the time. A popular California side gig is listing your room for rent.

Financial planner David Rae got roommates to help him afford his mortgage when he first purchased.

“I also bought a place with a granny flat — really helped,” he says. “Now I make enough to afford it easily.”

If you don’t want the commitment of a full-time roommate, listing your room on Airbnb is a simple and fun way to meet new people and try to make extra cash.

No seriously, we once found a guy in Mountain View making over $1,000 per month renting a tent in his backyard!

6. Get Financial Aid From the Government

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If you’re a low to moderate income homeowner and you’ve suffered financial hardship, such as unemployment, a death in the household, illness or disability, Keep Your Home California is available for assistance.

The state-run collection of programs allocates funds from the federal government’s Hardest Hit Fund to aid struggling homeowners in California.

Keep Your Home California recently received additional funding to ensure up to $100,000 in assistance per homeowner and continuation of programs through 2020.

Jen Smith is a junior writer at The Penny Hoarder and gives money saving and debt payoff tips on Instagram at @savingwithspunk.

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