Question: For some time I have been wondering if I should consider getting a fifteen 15 year mortgage, as I do not want to be burdened with a mortgage in addition to condominium fees. Assessing how and when to consider such a change is confusing to me, and I would appreciate your advice on the advantages and disadvantages of the fifteen 15 year versus the thirty 30 year mortgage.
Answer: I must state at the outset that I am biased against the fifteen 15 year loan. While there have been many commentators who have praised what they perceived to be the benefits of a fifteen 15 year mortgage, in my opinion, such a mortgage ra>
Lets look at some examples. You want to compare a 300,000.00 loan to be amortized on a thirty 30 year basis as compared to a fifteen 15 year basis. Lenders typically will provide a lower interest rate if you take a fifteen 15 year loan rather than the thirty 30 years. So for comparison purposes, let us assume that a 30 year loan is 4 percent and a 15 year loan is 3.5 percent.
To amortize the loan over fifteen 15 years, your monthly payment of principal and interest Pamp;I is 2,144..65. On a thirty 30 year basis, the Pamp;I is 1,432.25. As you can see, this is a 712.40 cash savings per month on a thirty 30 year loan. On a yearly basis, this is a savings to you of 8,548.80. Thats a lot of money.
Keep in mind that the interest deductions for tax purposes will, by and large, be the same for the first few years, but as your principal balance goes down faster with the fifteen 15 year amortization, accordingly your interest payments will also be smaller.
Thus, the major benefit of the fifteen 15 year loan is that you will save a lot of interest over the life of your mortgage. You are also putting up, in our example, over 8,500 a year toward principal, thereby reducing your mortgage balance and building up your equity.
Equity is the difference between the market value of your house and the mortgage or mortgages which you owe. In good real estate market conditions, property values increase on a yearly basis as much as ten to fifteen percent. Even in bad times, we all hope that property values will at least keep up with inflation, although obviously there will be dips and decreases in market values on a periodic basis. Many homes impacted by the "mortgage crisis" several years have now rebounded.
And assuming that we anticipate growth over the next decade, the equity in your house will grow regardless of the amount of your mortgage. This equity is "dead equity" and in my opinion, you might as well be taking that extra 8,548.80 and burying it in your back yard. In effect, that is my analogy for the fifteen 15 year mortgage.
I would rather take the extra 8,500.00 a year and invest it somewhere. I could put it in a pension plan, I could invest it in the stock market, I could give it to my children, or I could spend it on a vacation with my family.
After all, what will you do with your house fifteen 15 years from now when your mortgage is paid in full? I know of too many people who are currently house rich and cash poor. When you are in retirement, you may not keep that house, or if you do, you want to make sure that you also have some sort of nest egg to be able to enjoy your retirement years. If you have put all of your money into your house, and then you retire, you may not be in the financial position to tap into that equity at that later date.
The Department of Housing and Urban Development HUD has just tightened up the loan requirements for a Reverse Mortgage, so you may not be able to count on that down the road.
Accordingly, in my opinion, take the extra 8,500.00 a year and invest it in a conservative, long-term investment for the next fifteen 15 years. Even without any computation for interest, this will grow in the next fifteen 15 years. That will be the start of this important nest egg for the rainy day.
However, the advice I give is obviously general. You are advised to discuss your specific needs, plans and tax considerations with your own advisors.
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Youve probably heard how important curb appeal is when youre trying to sell your home. The first thing buyers look at when they pull up to your home is the big picture -- the house, the yard, the trees, the flowers. Its the impression that counts, and all it takes is one thing to ruin the effect -- a cracked walkway, dead branches in the trees, leggy bushes.
As you look around at all the things you need to fix or update to sell your home, it can be overwhelming. Many sellers struggle with the costs, the decisions, and the time it takes to market their homes. Since most landscaping isnt permanent, you may think its not as important as other projects that need to be done, but you should strongly consider putting it in the marketing budget.
You can do some of the work yourself or you can get help. But here are five jobs you can do that help you make the most of your homes drive-up appeal.
1. Get rid of anything dead. Dead leaves, flowers, and trees do nothing for your curb appeal. Snip it, rake it and bag it. As you finish, youll see blank areas. Fill these in with fresh flowers, small bushes, potted plants or yard art. No Gnomes or flamingoes need apply.
2. Cut and weed the grass. If you mow your own lawn, make sure its freshly mowed every week. Pull or spray weeds so the texture of the grass will be more pleasing.
3. Replace or hide leggy bushes. Nothing makes a front entry look more dated than bushes with longer legs than torsos. Pull them out and replace them, or if its more expedient, plant boxwoods or other small bushes in front. You can also cover a lot of blank areas with mulch, wood chips or gravel.
4. Improve both hardscapes and softscapes. Decorative stone, tile, brick, concrete or wood can add a lot of appeal to the softer elements such as flowers, plants, grasses and ground cover. Landscaping doesnt have to end at the porch. Bring color and vitality to the entry with potted plants and flowers.
5. Light the way. Landscape lighting doesnt have to be expensive. Lanterns to line the walk, or the occasional uplight for the trees can have a glamorous effect on the exterior of your home. Lighting provides security as well as spotlights what you want to call attention to -- a beautiful tree, a flower bed or an architectural element of the house.
If youre not sure where to begin, go to your local supply with a sketch or photo of your home and ask for ideas. Explain that youre selling your home and you need help with curb appeal. You may get a lot of free advice thats really helpful.
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Earth Day always makes us recommit to eco-friendliness, but I dont think were alone in saying that many of our grand efforts can be short-lived. Thankfully, even if youre not ready to start compositing or devising an elaborate rainwater catching system, you can still have an impact. Another benefit to being nice to the Earth - green measures are also money savers Ready, set, go green
1. Change your light bulbs
What could be easier than swapping out a few bulbs? Choose compact fluorescent bulbs CFL to see the biggest change.
"They consume about 75 percent less electricity and last up to 10 times longer," said Better Homes and Gardens. "Replace one 75-watt incandescent bulb with a 25-watt CFL and save up to 83 over the life of the bulb."
You dont need to lay out some complicated assembly line to dispose of every piece of trash. Start small by setting aside your plastic bottles and glass containers. If you have a recycling bin, use it. And if you live in an area where you can get money back for your recyclables, by all means, take advantage of it.
Recycling glass alone can reduce ">
3. Ditch the bottled water
Remarkably, close to 90 percent of plastic water bottles are not recycled. A pitcher with a filter can make a huge differenceyou can conserve up to five gallons a day with this one little change.
4. Shorten your showers
Every two minutes you save on your shower can conserve more than ten gallons of water. If you live in California or another area being impacted by the drought, this is probably already on your mind. For everyone else, shortening a couple showers a week is a start.
5. Turn off computers at night
"By turning off your computer instead of leaving it in sleep mode, you can save 40 watt-hours per day," said 50 Ways to Help the Planet. "That adds up to 4 cents a day, or 14 per year."
6. Turn off everything with an LED
Why stop at the computer? "Anything that has an LED light emitting diode that glows even after you turn it off continues to draw energy," said Better Homes and Gardens. Your TV, cell phone charger, and printer are likely culprits. Unplug the offenders from wall sockets and plug them into power strips instead. When you leave a room, flip the strip switch to cut the flow of electricity. Unplug appliances and electronics that glow and you could save 200 a year."
7. Dont forget about video games
Getting the kids into the habit of flipping the games off when theyre done is another easy way to save energy and money.
"Youll win back about 100 per year," said Good Housekeeping.
8. Slash your junk mail
50 Ways to Help the Planet estimates that the average American gets 40 pounds of junk mail per year. That equates to 100 million trees Take an afternoon and go on an unsubscribing spree. Youll save some trees, some space in your mailbox, and your sanity
9. Stop paying your bills
Its estimated that almost 20 million trees could be saved every year if Americans paid their bills online and opted to receive e-statements. We would also eliminate more than two billion tons of carbon dioxide and other greenhouse gases, and 1.7 billion pounds of solid waste, said 50 Ways to Help the Planet.
10. Buy some new appliances
Heres one more reason to go get that French door refrigerator youve had your eye on: it could help save the Earth and save you money.
"When its time to replace a household appliance, choose a product with an Energy Star label," said Better Homes and Gardens. "A household with Energy Star products uses about 30 percent less energy than the average householdan annual savings of about 570. You may even be eligible for a tax credit when you purchase an Energy Star product."
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With the sun shining down on your lawn this spring -- and the chance you could be facing days without rainfall -- youll probably be watering or turning on the sprinklers more often. Rather than watching your water bill dramatically increase, take this opportunity to look at how you can make your landscape water-efficient. Water-efficient landscapes can:
Reduce how much water you use outside by 20 to 50
Help you save almost 10,000 gallons of water per year
Decrease your bill by 30 to 70 per year
Here are some tips on saving water this spring and summer with your landscape. And dont worry, none involve a complete overhaul
1 Choose native plants.
Native plants are the better choice for your landscape because they:
Dont require a lot of watering
Are resistant to pests and diseases in the area
Dont need a lot of fertilizer
Rather than going wild and planting non-native species that could require a lot of watering and attention, focus on the plants that thrive in your climate. Check out local nurseries and speak to landscapers in the area who know what species to look at. If you really want to add exotic plants to your landscape, do not touch invasive species as they could hurt your natives and cause a headache by the end of the season.
2 Put plants into groups.
Once youve selected your plants, its time to group them together. If you put plants together by how much water they need, youll cut time and water use down. By putting the plants that need less water together, youll avoid under or over watering. Do the same with the plants that need a lot of water and plant them in the same area.
- Your thirstiest should go together, potentially near the house to take advantage of rainfall coming off the roof.
- Put plants that need drip irrigation or sprinkler water further out from thirsty plants.
- The furthest away from the thirsty plants will be plants that need little to no watering.
3 Mulch, mulch, mulch.
Mulch -- whether organic or inorganic -- helps save water by keeping soil cool, reducing evaporation and helping roots stay healthy. Mulch needs to be replaced on a regular basis, 2 to 3 inches at a time. There are two options to choose from:
- Organic mulches like compost, bark chips and pine needles. These break down and add nutrients at the same time.
- Inorganic mulches like landscaping paper, rocks and pebbles. These are permanent but can fluctuate more in temperature.
Youre usually better off applying organic mulches because of their added nutrients. You can also save some money by using your grass clippings as mulch after mowing.
4 Water efficiently.
Watering should be done efficiently and at appropriate times, so your plants get the most water absorption. You should water early in the morning when temperatures are at their coolest in the spring and summer. If you have new or transplanted flowers and shrubs, they will need less water. Never water in the middle of the day or at sunset--middle of the day is the highest evaporation time and dusk will encourage fungus and mildew growth overnight.
5 Minimize steep slopes.
If you have a steep slope in your yard, theres a chance all the watering you do will be pointless. The water will run away from your garden and down into the sidewalk. To avoid this problem, you have a few options.
6 Shrink the lawn.
Depending on the size of your lawn, theres a chance youre going to spend a lot of money on watering regardless. So why not look at making your lawn smaller? You might not need to have grass everywhere. Restrict it to areas where you actually need it -- the front yard or under a kids playground, for example -- or think about xeriscaping instead. Xeriscaping is a great idea in climates with very little rainfall, like the West and Southwest. Instead of green grass, a xeriscaped yard includes rocks, pebbles and sand. Its not a traditional yard in any sense, but its easy to maintain and you can still have flowers and shrubs sprinkled in.
For those who still want a lawn, you can plant types of grass that are more drought-resistant. These types include bermuda and buffalo grass, which use 20 less water than other types.
|Andrea Davis is the editor for HomeAdvisor, which helps homeowners find home improvement professionals in their area at no charge to ensure the best service in the shortest amount of time.|
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The Internet is a great tool for looking at homes for sale, but sooner or later, youre going to have to get offline and tour listings in person. That means youll have to find a real estate agent to get you past the lockboxes. Sounds simple? Not really. Here are six ways you could turn your house-hunting trip into an epic fail.
Calling the listing agent -- Listing agents represent the seller, not you. Some states allow an agent to serve both you and the seller if youre willing to sign a disclosure to that effect. Depending on what kind of agreement you sign, the listing agent cant advise you anyway and could be obliged to report back to the seller every word you said.
Listing agents also want to sell their own listings, or their brokers listings, so you may not get the full picture of whats for sale. You may not get to see their competitors listings until theyve exhausted showing you the in-house listings first.
Taking your kids along -- Kids get cranky, theyre distracting, they have to be fed, they wet their pants, and they break stuff. And letting them "pick their rooms" when you havent even made an offer is just stupid. It confuses them and opens you up to a lot of miserable "But Daddy, " questions later. Which you deserve.
Taking a slew of >- Its okay to take Mom and Dad to see homes, especially if theyre coughing up the down payment for you. But be an adult and do the first-viewings without them. You can select your own home, cant you? On the second pass, you can show them the ones youre most interested in, and invite them to weigh in with their opinions.
Keep in mind that the more people you bring along, the more opinions youll have to listen to. Theres no way to please everyone, so matter which house you pick, youll offend someone that you didnt choose their favorite.
Staying on your phone -- Millennials were born with cellphones in their hands, but you miss a lot when youre paying more attention to a screen than in screening houses. Texting means youre distracted, and making the most important purchase of your life is not the time to Instagram your friends. Taking pictures makes you look like youre casing the joint for a robbery, so save the selfies for when your offer is accepted.
Eliminating ugly homes too fast -- Fixer-uppers can be treasures, or dont you watch any HGTV? Dont diss homes because the paint or wallpapers outdated -- that can be easily changed. The beauty of ugly homes is that the price is usually low enough that you can afford to make your own updates. A little DIY could be good for you. Just think of the bragging rights youll have as your friends ooh and aaah over the changes you made.
Not trusting your REALTOR -- If you dont trust your agent, you picked the wrong one. You do stupid things like take your own car while viewing listings, missing out on valuable information your agent can share about the area, the home, and other homes for sale or that have recently sold. Youll also learn more about how your agent does business. Take notes. If you want to talk privately, simply ask the agent for a few minutes alone.
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Who says you have to stop with paint on the walls? A can of paint can easily transform a number of areas in your home, turning boring into beautiful. Its time to have fun with paint, all over your house and outside too.
Paint your cabinets
DIY paining your kitchen cabinets may not be a quick fix, but with a little time and patience, results can be well worth it. Make sure to review the steps and refrain from cutting corners, even when it feels like your arm is about to fall off curse you, sanding, for best results. See HGTV for a tutorial.
Paint your doors
And we dont mean white. Go bright, dark, or coordinate with your dcor. Either way, it will change your perspective every time you come and go.
Paint your furniture
See that ratty old dresser in your garage? Wouldnt it look so much better in peacock blue yes, it would? A fresh coat of paint can turn a old dusty >
Paint your moldings
Pick up a can of green/grey, glossy black, or even neon green to set off bright white walls, and turn those moldings into something that really frames the room.
Paint your trim
"Painting your trim is one of the best ways to make a dramatic impact in your homes appearance," said Bob Vila. "For best results, start painting from the corners, using a brush to work your way into small or tight areas.
Paint your ceiling
If you have a unique architectural element in your room like interesting angles or a tray ceiling, showing it off with a contrasting paint color or finish is a great way to call attention to it and add allure to the space.
Paint your floor
Whitewashed and rustic finishes are all the rage in wood floors today. If you have midtone or dark wood floors, consider a trip to the paint store and a few ok, a few more than a few hours of sweat equity.
"Painting older solid wood floors can give them new life without the expense and mess of refinishing them," said Houzz. "It can also make your floors a beautiful design element in their own right, particularly with interesting patterns."
For a how-to, check out their site.
Paint your concrete
Gray is on trend as an interior and exterior paint color, but when it comes to your concrete, it just reads boring. "Three coats of latex porch and floor paint plus a concrete sealer are all it takes" to take your patio from blah to bold," said Bob Vila.
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Used to be the kitchen was a hardwearing, hidden-from-the-rest-of-the-house space that was all about utility, nothing about attraction. Todays kitchens look as good as they live, especially when a few glamorous touches are thrown in.
"Luxe textiles and reflective pieces add excitement to contemporary interiors," said Houzz. And thats never been more true than in todays kitchen. Just witness the return of brass, now being seen in fixtures, finishes, and even appliances. For warmth and luxe factor, it doesnt get much better than the antithesis of cool stainless and brushed nickel.
Also see: Brass Is Back In Town
Check out these glamourpuss kitchens and tell us youre not ready to up the luxe quotient in your kitchen.
Glam doesnt mean overhauling your whole kitchen. Sometimes, one spectacular chandelier is all you need to transform a space from "Just OK" to "Holy cow." A gathering of modern Kelly green chairs doesnt hurt either.
If youre looking for one spot to start in glamorizing your kitchen, lighting is a good place to start.
"Chandeliers and pendants are the perfect accessory to not only brighten your kitchen but change the mood of the space," said House Beautiful. "Standard lights that come in most homes and rentals are uniform, change it up and give the most used room in your house some personality or an unexpected element."
It doesnt get much glam than a room full of Calacatta marble.
Dont want to update your counters or your lighting? Modern tin ceilings bring in a little shine from the top down.
Its all in the details. This kitchen featured in Domaine takes showstopping lighting and pairs it with a contrasting paneled island and uniquely detailed range hood.
Home Trend Design
You can also achieve glam status without baubles and reflective surfaces, as proven by this modern industrial kitchen, which happens to belong to actress Hillary Duff. The loft-like spaces hard edges are softened by the plush seating.
Speaking of plush fabricsa banquette can be utilitarian or it can be luxurious. Or, it can be both. The curvy lines of the table legs and chairs and the sleek modern light fixture overhead create the ideal space for dining and >
Looking for more ways to inject some glamour into your kitchen? House Beautiful has some tips.
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With the sun shining down on your lawn this spring -- and the chance you could be facing day...
> Full Story
The Internet is a great tool for looking at homes for sale, but sooner or later, youre going...
> Full Story
Who says you have to stop with paint on the walls? A can of paint can easily transform a num...
> Full Story