Before the holiday rush kicks into high gear, let's talk about one of the smartest things you can do as a homeowner: a year-end financial check-up. Taking an hour or two now to review your home-related finances can save you a significant amount of money and set you up for a less stressful, more prosperous new year. Think of it as a bit of preventative care for your largest investment. Here are five straightforward steps to get your home finances in order before the calendar flips.
1. Dive Into Your Mortgage Statement
It’s easy to let this document go unread, but your year-end mortgage statement is packed with crucial information. First, check your escrow account. Your lender uses this to pay your property taxes and homeowners insurance. If your taxes or insurance premiums went up this year, you might have a shortage, meaning your monthly payment could increase next year. If you have a surplus, you might even get a check back! Knowing this now helps you budget for 2026 without any surprises. It's also a great time to see how much you've paid toward your principal and consider whether making an extra payment before year-end makes sense for you.
2. Re-evaluate Your Homeowners Insurance
Did you finish the basement this year? Add a new deck? Or invest in a home office setup? If you've made significant upgrades to your home, your current insurance policy might not be enough to cover them. Give your insurance agent a call for a quick policy review to ensure you're not underinsured. This is also the perfect, no-obligation time to shop around. Get quotes from a few other providers—a little bit of research could potentially save you hundreds of dollars a year on your premiums.
3. Get Ahead of Property Taxes
Property tax bills often arrive in the fall. If you don't have an escrow account, make sure you have a plan to pay this on time to avoid steep penalties. More importantly, take a close look at your home's assessed value on the bill. If the value seems unusually high compared to similar homes in your neighborhood, you may have grounds for an appeal. A successful appeal could lower your property tax bill for years to come. Check your local assessor's website for the deadlines and procedures—you’d be surprised how many homeowners save money this way.
4. Prep for a Smoother Tax Season
Future-you will thank you for this one. Start a folder (digital or physical) right now for all your home-related tax documents. This includes your mortgage interest statement (Form 1098), records of property taxes paid, and receipts for any energy-efficient upgrades you made (like new windows or solar panels), as these may qualify you for valuable tax credits. Having everything in one place makes tax time infinitely less stressful and ensures you can maximize the homeowner deductions you're entitled to.
5. Set Your Home Goals for the New Year
Now for the fun part. What do you want to achieve with your home in 2026? Dream a little! Maybe you want to finally tackle that kitchen remodel, pay off your mortgage five years early, or simply build a healthy home maintenance fund. Write down one or two key financial goals for your home. Breaking them down into small, actionable steps—like setting up an automatic monthly transfer to a "Renovation Fund"—makes them feel achievable and sets you on a clear path to building more value in your home.
Your Year-End Home Finance: Quick Checklist:
[ ] Review Your Mortgage Statement: Check your escrow balance for any shortage or surplus and review your principal balance.
[ ] Assess Your Homeowners Insurance: Call your agent to update your coverage after any renovations and get new quotes to ensure you're getting the best rate.
[ ] Check Your Property Tax Bill: Verify the assessed value is fair and be prepared for payment deadlines.
[ ] Start a Tax Folder: Gather your Form 1098, property tax records, and receipts for home improvements.
[ ] Set 2026 Home Goals: Define one or two financial goals, whether it’s saving for a project or making extra mortgage payments.
