homeowners http://www.wisebread.com/taxonomy/term/11986/all en-US How to Winterize Your Home for Maximum Savings http://www.wisebread.com/how-to-winterize-your-home-for-maximum-savings <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-winterize-your-home-for-maximum-savings" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/winter home.jpg" alt="winter home" title="winter home" class="imagecache imagecache-250w" width="240" height="180" /></a> </div> </div> </div> <p>The heat of summer is fading fast and fall temps may be prompting some around the country to start turning up the thermostat. With the rising costs of living already hampering many families, the added costs of heating oil and electricity will prove to be a real burden over the long, cold winter months.</p> <p>In order to save money on winter heating costs, it is essential you start preparing your home to battle to cold before it takes hold. Most of the winterizing steps you need to take are relatively easy, do-it-yourself tasks that will not cost you as much as heating your home will. With initiative and some time, you can ensure big savings.</p> <h2>Low Cost/Simple Tasks</h2> <p>Here are some cheap and easy tips for winterizing against Old Man Winter:</p> <h3>Check windows and doors</h3> <p>Check the weather-stripping around all of your doors and windows, including those in the basement and attic, as they may deteriorate over time and due to the elements. Replacements are not expensive and can make a big difference in your heating bills. Make a draft catcher pillow out of old clothing or keep a rolled blanket at the base of all doors.</p> <h3>Check pipes and utility holes</h3> <p>Any areas where piping or cable leads to the outside of your home should be checked for drafts. Use a color-coordinated caulking or expandable foam insulation spray to fill in holes and gaps.</p> <h3>Cover permanent AC units</h3> <p>If you have a window unit air conditioner mounted into the wall, purchase a specialized cover or use a quality tarp to cover the outside of the unit. Inside the home, the air conditioner frame should be sealed off with foam insulation.</p> <h3>Inspect storm windows</h3> <p>When the weather is no longer warm enough to keep the windows open, check all glass storm windows for cracks or other damage and make sure they are tightly closed.</p> <h3>Shut off unused rooms</h3> <p>If you can control heat in rooms you do not use, turn heat on low and make sure all doors remain shut to prevent wasting heat.</p> <h3>Adjust the thermometer</h3> <p>During the day when no one is in and the sun is heating the exterior of your home, keep the thermostat low; only turn it up during the evening hours to keep the dampness and chill out of the air. Wear layered clothing and use blankets when hanging out at home. Leave blinds and curtains open during the sunlight hours and close them tight at night.</p> <h3>Hire professional cleaning</h3> <p>Having your furnace checked by a professional is not optional. For the safety of your family, you need to check your heating system before the start of each fall/winter season. Also have chimneys, fireplaces, and other supplemental heat sources checked for problems. A professional cleaning will cost a few hundred dollars but if you take the initiative to learn how to do it yourself, you can save the cash for something else. Ask a relative who is handy with home repairs or hang out with the pro on the next visit and learn what you have to do. Home improvement stores like Lowe's often sponsor <a href="http://www.wisebread.com/diy-home-improvement-10-free-options-for-training-and-advice">classes in home improvement</a>, so check in with your local store to find out more.</p> <h2>Bigger Jobs to Start Saving For</h2> <p>You may not have the cash to do a total home makeover before winter hits, but it is smart to be aware of the bigger jobs that need attention and start saving now. Over time, homes will all need more attention and simple tasks will no longer be enough to make your home heat efficient.</p> <p>Here are some of the bigger things you need to consider:</p> <h3>Replace drafty windows</h3> <p>If most of your home's windows are old and drafty, it would be smart to invest the cash to replace them all at the same time. If you can't afford to redo all windows, start with those located in the most frequently used rooms like bedrooms, living room, and kitchen. Check with your local government offices and ask if there are any rebate programs or assistance for replacing windows and making your home more energy efficient. Also, check in with the IRS to learn more about <a href="http://www.irs.gov/newsroom/article/0,,id=214873,00.html">energy-efficient tax credits</a>.</p> <h3>Upgrade insulation</h3> <p>If you have an older home, you may have some insulation but not enough to sufficiently keep the heat inside. Fully insulating your home will not only save you money over the long haul, it will also improve the value of your home if you choose to sell down the road. Contact several home improvement contractors now and request a free estimate. Compare prices and work being completed. You'll have a financial goal to work towards during the next year and it will help you make the work a priority.</p> <h3>Invest in solar panels</h3> <p>Go a little green by investing in some solar panels which uses the sun as a heat source. Find a reputable contractor that works with solar panels and request free estimates so you'll know if it's financially an option for your home.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tisha-tolar">Tisha Tolar</a> of <a href="http://www.wisebread.com/how-to-winterize-your-home-for-maximum-savings">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/like-diy-avoid-these-ten-costly-mistakes">Like DIY? Avoid These 10 Costly Mistakes</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-diy-tips-to-winterize-your-home-for-cheap">7 DIY Tips to Winterize Your Home for Cheap</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-really-easy-ways-to-unclog-drains">10 Really Easy Ways to Unclog Drains</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/diy-home-improvement-10-free-options-for-training-and-advice">DIY Home Improvement: 10 Free Options for Training and Advice</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/14-ways-to-make-your-yard-look-awesome-for-under-100">14 Ways to Make Your Yard Look Awesome for Under $100</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Home home improvement home maintenence Home repair homeowners winter cleaning winterizing a home Mon, 11 Oct 2010 13:00:13 +0000 Tisha Tolar 258591 at http://www.wisebread.com The Pros and Cons of Paying Cash for a House http://www.wisebread.com/the-pros-and-cons-of-paying-cash-for-a-house <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-pros-and-cons-of-paying-cash-for-a-house" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/5804302023_e157384fda_z.jpg" alt="homeowners" title="homeowners" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <p>My husband said that when we do buy a house, he wants to just buy it with cash so we can own it outright and in our way say &quot;screw you&quot; to the banks. I like that idea, but just like any financial decision, there are pros and cons to doing this.</p> <h2>Pros</h2> <p><strong>No Credit History Needed</strong></p> <p>A long time ago I read a story of a guy who avoided credit cards and loans like the plague so he did not have a credit history, but he had considerable savings. When he wanted to buy a house no one would give him a loan, so he bought a house outright with his savings. In situations where you do not have the ability to get a reasonable loan, then paying cash might be the best option. (See also: <a title="Building a Credit History" href="http://www.wisebread.com/building-a-credit-history">Building a Credit History</a>)</p> <p><strong>Risk Free Savings</strong></p> <p>If a mortgage costs 7% and you pay cash, you would essentially be saving 7% in interest risk free. So in the case where mortgage interest rates are higher than what you can get on your investments, you would come out ahead by paying in cash.</p> <p><strong>You Actually Own Your House</strong></p> <p>I think psychologically there is a big benefit in knowing that you own your house free and clear. You also free up quite a bit of income because you will have no rent or mortgage.</p> <p><strong>You Are Not Leveraged</strong></p> <p>Buying a house with cash means that if the value of the home goes down by 10% then the money you put in also goes down by 10%. The most you can lose is the amount of money you put in. In the case of a 20% down mortgage, if the house's value goes down 10% then you lose 50% of the money you put in because of leverage.</p> <p><strong>Negotiate a Better Deal</strong></p> <p>When you have the cash to pay for the full amount of a house, it means that there will be no contingencies on getting a loan and the amount of time needed to close a deal is shorter. This generally gives you the buyer more <a title="7 Laws of Negotiation" href="http://www.wisebread.com/the-7-laws-of-negotiation">negotiating power</a> for a discount on the price of the home.</p> <h2>Cons</h2> <p><strong>Less liquidity</strong></p> <p>Having a mortgage lets you free up your cash for other investments. It is also not wise to put all your liquid assets into buying a house with cash because it is harder to free up that money in case you need to use it. If you buy a house with cash, any new mortgages would be considered refinances and carry a higher rate than a first mortgage.</p> <p><strong>You Are Not Leveraged</strong></p> <p>Leverage goes both ways, so if the value of the home goes up, then the percentage gain of an all cash buyer would be comparably lower than the person who purchased with a mortgage.</p> <p><strong>No Tax Advantage</strong></p> <p>Mortgage interest is deductible on income taxes in the United States. If you are in a high tax bracket that benefit lessens the bite of the interest by quite a bit. In contrast, buying a home with cash does not give you any tax deductions.</p> <h2>Conclusion</h2> <p>Generally, I think it makes sense to pay for a house with cash if the following conditions apply to you:</p> <ol> <li>The amount of cash you spend does not consist of a significant portion of your liquid assets.</li> <li>The interest rate on a mortgage is higher than what you can earn on your other investments.</li> <li>The amount of savings you get from an all cash deal versus a loan deal is significant.</li> <li>You do not want to deal with a credit agency in any manner.</li> </ol> <p>Currently, I think mortgage rates are still low enough for mortgages to be worthwhile, but as banks raise their lending rates and housing prices fall further it may make more sense to buy a home with cash in the near future.</p> <p><em>Have you ever purchased real estate without financing? Tell us about it!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/xin-lu">Xin Lu</a> of <a href="http://www.wisebread.com/the-pros-and-cons-of-paying-cash-for-a-house">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/whats-faster-for-mortgage-payoff-100-month-extra-or-1-payment-year-extra">What&#039;s Faster for Mortgage Payoff: $100/Month Extra or 1 Payment/Year Extra?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/boost-your-homes-value-with-these-5-projects">Boost Your Home&#039;s Value With These 5 Projects</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-sell-your-house-in-24-hours">How to Sell Your House in 24 Hours</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-surprising-things-that-lower-the-value-of-a-home">10 Surprising Things That Lower the Value of a Home</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/low-interest-rates-do-not-make-homes-affordable">Low Interest Rates Do Not Make Homes Affordable</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing buying a home homeowners Thu, 17 Jul 2008 20:56:32 +0000 Xin Lu 2246 at http://www.wisebread.com What's Faster for Mortgage Payoff: $100/Month Extra or 1 Payment/Year Extra? http://www.wisebread.com/whats-faster-for-mortgage-payoff-100-month-extra-or-1-payment-year-extra <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/whats-faster-for-mortgage-payoff-100-month-extra-or-1-payment-year-extra" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/house-414159-small.jpg" alt="homeowners" title="homeowners" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>Recently, a reader with a 15-year mortgage and an interest in accelerated mortgage payoff asked if it was better to pay $100 per month extra ($1,200 per year) or make an extra payment at the end of each year? The short answer: it depends on your loan balance and interest rate, though generally the higher extra payment is going to result in a faster payoff. <em>There's more, but I'll go ahead and put my disclaimer here and say that I am responding to an inquiry not necessarily recommending that you pay extra on your mortgage.</em> (See also: <a href="http://www.wisebread.com/6-great-reasons-for-paying-off-the-mortgage-on-your-home">6 Great Reasons for Paying off the Mortgage on Your Home</a>)</p> <p><strong>Here are the detailed calculations:</strong></p> <p>As with any financial calculation, you have to make assumptions so I've created these: $200,000 loan balance, 15-year fixed rate mortgage, and 5.93% interest rate (which was bankrate.com's average rate when I first starting researching this question on August 3, 2007). So, your monthly payment (principal and interest not including escrow amounts) is $1,680.16.</p> <p>Add $100 to the monthly payment and you will pay off the loan in 165 months (13.75 years); or add an extra payment at the end of each year and you'll pay off the loan in 160 months (13.33 years). Just for fun, I did calculations on balances from $100,000 to $400,000 at the 5.93% rate and, if you make the one extra payment every year, you will always pay off the loan in 160 months. However, if the loan balance is $100,000 and you pay $100 extra each month, then you will pay off the loan in 152 months (12.67 years); if your loan balance is $400,000, the payoff is at 172 months (14.33 years). (See also: <a href="http://www.wisebread.com/fixed-or-adjustable-choosing-the-right-mortgage-loan">Fixed or Adjustable? Choosing the Right Mortgage Loan</a>)</p> <p><strong><em>Now you may be wondering if there is any advantage in making extra monthly payments throughout the year rather than waiting until the end of the year.</em></strong> There is a slight advantage. For example, if you took that extra payment amount ($1,680.16), divvied it into 12 equal payments ($140), and then paid $140 extra each month, then you would pay off the loan in 159 months (rather than 160 months if you paid the $1,680.16 at the end of the year, every year).</p> <p><strong>Also, why would you want a 15-year mortgage?</strong></p> <p>Generally, 15-year mortgages will offer a lower interest rate. So, over the life of the loan, you will pay substantially less interest as compared to a 30-year loan because 1) you are paying more principal earlier in the life of the loan, and 2) you have a lower interest rate.</p> <p>Here are some differences between the 15-year and 30-year fixed rate mortgage, given a $200,000 balance and a 6.26% rate on the 30-year, fixed rate mortgage.</p> <p>15-year mortgage</p> <ul> <li>Monthly payment: $1,680.16</li> <li>Total Payment: $302,428.68</li> </ul> <p>30-year mortgage</p> <ul> <li>Monthly payment: $1,232.74</li> <li>Total Payment: $443,784.77</li> </ul> <p>Differences between 15-year and 30-year fixed rate mortgage</p> <ul> <li>Monthly payment: $447.42 more for the 15-year mortgage</li> <li>Total Payment: $141,356.08 more for the 30-year mortgage</li> </ul> <p>You could take that extra $447.42 and invest it rather than put it toward your mortgage; if you earned more than 6.26%, you'd come out ahead (not considering tax implications). (See also: <a href="http://www.wisebread.com/top-10-real-estate-tax-write-offs">Top 10 Real Estate Write-Offs</a>)</p> <p>Still, there is something attractive about paying off a mortgage in 15 years. Here are some scenarios where the shorter, lower rate mortgage makes sense:</p> <ul> <li>You want to save as much in interest as possible and you want to be debt-free as quickly as possible.<br /> &nbsp;</li> <li>You are fully investing in your 401(k) and any other nontaxable accounts for which you are eligible.<br /> &nbsp;</li> <li>You are saving and investing regularly.<br /> &nbsp;</li> <li>You don't want to think about accelerating your mortgage payoff anymore. (To me, the 15-year mortgage offers a built-in acceleration.)<br /> &nbsp;</li> <li>You and/or family members like the way that the shorter-term mortgage helps you stick to a budget. (That is, you may be likely to spend the extra $400+ per month rather than invest it if you don't opt for the longer-term loan.)</li> </ul> <p>If anyone is clamoring for a spreadsheet to do your own calculations on a 15-year fixed rate mortgage, let me know and I'll upload one. Or check out my 30-year mortgage schedules at <a href="http://www.wisebread.com/diy-mortgage-acceleration">DIY Mortgage Acceleration</a>.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/julie-rains">Julie Rains</a> of <a href="http://www.wisebread.com/whats-faster-for-mortgage-payoff-100-month-extra-or-1-payment-year-extra">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-prepare-for-a-home-purchase-in-2010">How to Prepare for a Home Purchase in 2010</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-pros-and-cons-of-paying-cash-for-a-house">The Pros and Cons of Paying Cash for a House</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/six-options-if-youre-underwater-on-your-mortgage">6 Options if You&#039;re Underwater on Your Mortgage</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/front-loaded-loans-a-financial-conspiracy">Front-loaded loans: a financial conspiracy?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-one-mistake-could-delay-your-retirement-by-10-years">This One Mistake Could Delay Your Retirement by 10 Years</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing homeowners loans mortgages Fri, 10 Aug 2007 21:20:44 +0000 Julie Rains 974 at http://www.wisebread.com