Saving on Home Loans

One of the biggest purchases you will make over your lifetime is the purchase of a house.  Some will argue that purchasing a house is an investment.  But, if it’s your primary house that you intend to live in, it’s not an investment.  Sorry, it just isn’t.  If you intend to rent the house out, that’s another story, but your primary residence is just a purchase.  Even so, it’s a very large purchase.  It makes sense, then, that we will want to find as many ways as we can to save money on the purchase of our home.

Saving before a home purchase

I’ll discuss how to save on your home once you’ve already purchased it a bit further down, but you’ll find yourself a good bit ahead of the game if you start thinking about how you can save money on your home purchase before you make the purchase.

  1. Improve your credit, improve your rate – The rate at which you borrow the money to buy your home is a big deal.  A half a point on the rate can translate to thousands of dollars more in interest over the life of the loan.  The best way to guarantee that you get the best rate available is to have excellent credit.  Depending on how far you improve your credit, you could shave as much as two or three points off the interest rate of the loan.  Not only will that reduce the payment you’ll make, but it will reduce the amortized amount of the loan by tens of thousands.  Want to know what makes an impact on your credit score?  Read the Beating Broke Guide to Your Credit.
  2. Compare home loans – I mentioned how this will likely be one of the biggest purchases of your life, right?  Well, why on Earth wouldn’t you compare the loans available to make sure you were getting the best deal?  You’ve got to compare those loans!  Different lenders will have different policies, rates, and even lengths of loans.  Not only will failing to compare the home loans available cost you money, but it could cause you a lot of stress over the life of the loan.
  3. 20% down or more – If you’ve got the savings for it, put at least 20% down on the home.  Why?  Well, it reduces the amount of the loan, for one.  The less you have to borrow the better, right?  More importantly, 80% is the normal cutoff for when a lender will require you to add Private Mortgage Insurance to the loan.  It can add a hefty bit to the monthly payment, and it doesn’t go anywhere but into the insurer’s pocket.

Saving after a home purchase

  1. Refinance – This may not be for all of you looking to save, but with the current rates, it bears looking into for some of you.  Refinancing a higher interest rate mortgage into a lower interest rate loan can save you thousands over the life of the loan.  Refinancing into a shorter term mortgage can also save you thousands, but beware that the mortgage payment is likely to be higher due to the shorter amortization period.
  2. Make extra payments – If refinancing isn’t in the cards for you, make sure that your lender will accept extra payments to principle and then start making them.  Reducing the principle will reduce the interest, and by simply making an extra payment a year, you can shave years off of your mortgage.

Whether you’re looking at buying a home, or already have, saving money on the biggest purchase of your life is always worth looking into.  A few minutes on the phone with your lender can sometimes save you more than you would cutting lattes every day.  With the higher number of defaulting mortgages recently, many banks are much more willing to help you save money on your payments and pay the loan off early.  They like getting their money back too!

What other ways have you used to save money on your mortgage?  What’s the most extreme example that you’ve heard of?

My Container Garden: The Season is Over

This spring, frustrated by the lack of any good growing space in our yard, we decided to give a container garden a try.  We bought up a whole bunch of pots to put everything in, got some good potting soil, and planted away.  Once we were done, we planted a couple pots of tomatoes, a couple pots of cucumbers, a longish pot of green beans, a pot of green peppers, a longish pot of carrots, two pots of onions, and two large pots of potatoes.

Last weekend, with the low temperatures in the forecast dipping below the 32 degree mark, we decided it was a good time to pull up the root vegetables, and pick anything that was ripe.  Considering the few silly things we did, and the terribly hot summer we had, I think we did O.K.

Container Garden Harvest

In the picture, you can see some of what we pulled up last weekend. I wasn’t quick enough on the camera trigger to get pictures of the carrots or peppers before they got taken into the house. Also not pictured are any of the cucumbers, beans, or tomatoes we’ve harvested throughout the summer, or any of 10 or so potatoes that we pulled out from the bottom of the potato bag in August.

Overall, I’d have to say that I was slightly disappointed with the harvest.  None of the onions grew to very good size.  What cucumbers we did harvest were all seeds and no flesh.  The heat really played havoc on most of the plants in the containers.  There were several weeks where the plants really needed to be watered every night, but we were either gone, or didn’t get home in time to do it.  I also made the mistake of planting a few too many plants in some of the containers, and I think they got crowded which stunted their growth.

The quality of what we got, however, was pretty good.  Fresh potatoes taste nothing like what you get from the store, they’re so buttery and sweet.  The onions, while small, were very good as well.  My wife made a salsa with some of the tomatoes and onions, and it was very, very good.

I’ve already got a pretty good mental list of the things that I’ll be changing next year.

  • We get such a short growing season here, that I either need to start the seeds much earlier in the house, or just spend the money and buy greenhouse plants when it’s time to plant.
  • I’ll have to be careful to reduce the number of plants in the pots as well, to cut back on the crowding issue we had.
  • I’m also thinking about building a few planters attached to the deck so I don’t have to buy any more pots.  Of course, I could try and find some second hand pots as well.
  • The soil we use may have to change a bit as well.  The stuff we bought this year, while good potting soil, just didn’t seem to keep it’s consistency very well.  Part of that may have been the need for more watering.
  • I’ll be changing the mix of plants that I plant as well.  The cucumbers didn’t seem to take to containers all that well, so I might cut those in half.  I’d also like to add a few more tomato plants, and a few more varieties of peppers.  We only planted green peppers this year, but I’d like to try some jalapeno, and maybe another variety of hot pepper.

How did your garden turn out this year?  Do you plant in a garden or in containers?


I Feel So Small

Occasionally, I feel so very small.  I’ll try and explain. (Also, excuse me a bit, as this is only vaguely about money and finance, but please read to the end.)

I recently attended the Financial Bloggers Conference.  It’s a conference of people, like me, who run and write (or just write) blogs that are finance related.  Mostly, we write about personal finance.  Whether it’s by design or not, each of the FINCONs I’ve been to have had a very distinct “feel” to them.  The first had an emphasis (at least in my perception) of building the blog, and ways in which we can monetize our blogs to make them self-sustainable.  This year, the theme, as I perceived it, was all about voice.

Perhaps that can be attributed to Adam Baker (of Man Vs. Debt) and his opening keynote.  Throughout the speech, he spoke about defining the why.  Writing for the why.  Living out the why.  What is the why?  It’s the purpose.  It isn’t the product, and it certainly isn’t the site.  It’s the reason that we write what we write.  It’s the reason that we come back night after night to write articles for our sites.

For me, the “why” of Beating Broke is to share the knowledge I have.  It’s to share the knowledge I learn.  It’s to have an outlet that allows me to reach a few people and, hopefully, help them make their financial lives better.  I write articles about finance to make your financial life better.

During Adam’s keynote, I realized that I was surrounded by 450 or so other writers.  Each with their own unique voice, talents, and experiences.  The realization of that, and the realization of how many people there are out there that don’t even use the internet makes me feel so small.  I’m such a tiny, tiny, drop in a sea of information.

Later, I sat in on a panel of some of the pioneers in the financial blogging community.  During that panel, they spoke about how the community has grown, and how much the community’s influence has grown.  Another keynote speaker, Liz Weston, spoke about how our influence is growing.  She touched on how what we do, sharing information online, has become more and more accepted and acknowledged as a source of information.  Again, surrounded by the community of bloggers that I am a part of, I felt so small.

If you’re reading this, it’s because you have become a part of the Beating Broke community.  It’s a small community in the middle of a much larger community.  But, it’s a community with one overarching “why”.  We exist to make financial lives better.  We do it by making our financial lives better and then sharing that with others.

So, today, I’m going to ask you to share.  Share the community with someone else today.  Invite someone else into the community.  You’ve got plenty of options on how you do that.  With all the social media available, it’s becoming pretty easy.  Send an email, write a tweet, share on Facebook, or any number of other ways to share.  But, share.  We become better by helping others become better.

Share your favorite blog, blog post, or any bit of information today.  Invite them into the community.

And, finally, if you’re a part of the community, I want to help make your financial life better.  If you’ve got questions, please feel free to ask them.  Leave a comment below.  Or use the contact form to send me a note.  I’ll do whatever I can to get you an answer.

img credit:C! on Flickr