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Finance

How Natural Gas Can Save You Money

Posted on by How Life Works

Natural gas is one of the most versatile fossil fuels used in the United States with approximately 22% of energy consumption coming from natural gas. Most gas consumed in the U. S. is produced in the U. S., with some coming from Canada. More than 60% of U.S. homes use natural gas as their main source of heating. It burns cleanlier than other fossil fuels with demand increasing at about 6% each year.

Natural gas is a non-renewable fuel that’s odorless, colorless and tasteless. Then what’s that awful odor when you turn on a gas jet that some say smells like rotten eggs? It’s a chemical called mercaptan added before distribution as a safety device. Natural gas is moved from production fields to consumers and stored in large underground storage systems for use when needed.

Uses for natural gas include high efficiency furnaces and boilers, space and water heating, ranges, gas grills and fireplaces, spa and pool heaters. It’s also a major source of generating electricity.

Studies reveal many benefits of natural gas making homes more valuable and desirable. Natural gas furnaces last twice as long as an electric heat pump providing a more comfortable heat.

Water heating and clothes drying are done faster and more effectively with gas. When drying clothes, dry consecutive loads to take advantage of built up heat. Separate heavy clothes from light weight fabrics to reduce drying time and use the proper water level for your load size when washing.

Gas is safer to cook with since you can see the flame reducing the chance of getting burned. Adjust the flame to fit the bottom of your pan. If the flame goes beyond the bottom you’re wasting energy. Reach the desired temperature more quickly when heating food by using lids or covers.

Check and clean your furnace regularly to gain optimum benefits from natural gas. Have a professional tune up your furnace each year to save at least 2%. Turn off any pilot light if you’re going to not be using that appliance for a prolonged period. Caulk and seal doors and windows when drafts are detected to keep the cold out. Shut fireplace dampers and close doors and vents in unused rooms.

A gas radiator located near a cold wall is inefficient. Place a sheet of aluminum foil between the radiator and the wall to reflect the heat back into the room.

If you’re upgrading your appliances be sure and purchase the Energy Star models. With this program, you’re sure to get the most energy efficient appliance available. Rebates may be available when you switch from electric to gas on some appliances. Your dealer can usually help you with this.

More home builders and home owners are choosing to use natural gas, especially for heating. When you save money and increase your efficiency, you might say you’re cooking with gas.

Finance

How To Profit from the Real Estate Bust when Buying a Home

Posted on by How Life Works

Buying a home is probably the largest investment you and your family will ever make. Unless you’re wealthy, few people buy homes and pay cash. Rather, they make a small down payment and obligate themselves to a financial lender for a term of usually 30 years. In this case, the lender determines the interest rate and gives you a thorough financial background check.

There are at least two other ways to buy the home of your dreams and probably save money: assuming the existing mortgage or owner financing. Either method usually saves you time, trouble and money.

If you’re trying to assume a mortgage first make sure it’s assumable and transferable. Many mortgages have a due on sale clause that states if the owner sells all or part of a house the entire balance becomes due and payable on demand. A lender may be willing to overlook a non assumable mortgage is you’re able to make good any overdue payments and agree to do further business with the existing lender.

If a house is selling for $100,000 and the owner still owes $60,000, you could pay the owner the equity of $40,000 and assume the debt of $60,000 with the existing lender. This is good for the buyer if the existing interest rate is equal or lower than the current rates for a home loan. A second mortgage may be needed for the equity payment.

There are different ways to assume a loan. You can, as a buyer, assume the legal obligation for payments and usually pay an assumption fee of 1% of the loan balance. Or, you could take over the payments leaving the seller still legally obligated for payment if you default. If this happens, you lose the property and the seller’s credit is harmed unless he makes payments as scheduled.

Seller (owner) financing is good if a buyer can’t qualify for a traditional loan and if the owner has had trouble selling and is in a hurry to unload the house. In this case, it would be wise to find out the need for the rush selling or why the home has not sold previously.

For the agreed upon price you would begin making monthly payments to the seller usually at a lower interest rate than is being offered at institutions. There is little risk as the home is collateral. If you default, the seller regains possession of the house.

The seller may also need to have an additional stream of income each month instead of getting it in one lump sum. And, he could save on some of the capital gains tax. With owner financing, you as a buyer can avoid some (not all) costly administrative fees and private mortgage insurance (PMI).

Assuming an existing mortgage or obtaining owner financing are two great ways to become a homeowner and save money at the same time. No matter what the current status of the real estate market is or if interest rates are high or low, there are always creative ways to obtain financing.

Now that you’re armed with creative means for financing, it’s time to find that dream home; but finding the right place can be the toughest part of the journey. Fortunately, CheapHomesBlowout.com has listings of over 487,000 homes all over the country that are in foreclosure or have owners looking to unload them. They can help you find the home that you’ve been dreaming about at a price well below market value. Click on the link below for more information and to get started:

Finance

Plug in Points to See How Your Financing Will Pay Off

Posted on by How Life Works

One of the most innovative financial markets is the home mortgage loan sector. And, when you toss points into the mix it adds convolution to an already complicated process. Most buyers don’t understand the concept of points and hesitate to ask or go to the trouble to learn about the process. They become overwhelmed and can be at the mercy of whatever the lender offers.

It’s actually quite simple. Points are fees paid to a lender for a loan. The points are usually linked to interest rates with the more points you pay for, the lower the interest rate. You can view them as pre-paid fees. It’s sort of pay now with points or pay later with interest.

If you have the cash on hand to pay points and you still can’t decide if you should pay them to get a lower interest rate ask yourself what you would do with the money if not spent on points. If you’re buying a home you probably have many needs for the extra money but don’t be short-sighted. Invest for the long term.

Most lenders typically charge one point for the loan origination fee and additional points on loans that have interest rates under the current market rate. The lender gets some money up front in exchange for a lower interest rate. It’s a win situation for both parties. You can check the newspaper or the Internet for current rates and points being offered and their combinations, which are many and negotiable.

Some points will reduce the interest rate and some won’t. Discount points are based on how much money you borrow. One point equals 1% of the loan. For example, 1% of $100,000 would be $1,000. You can expect a reduction of about one quarter percent for each point paid. Paying points does not reduce the amount borrowed but how much you’ll be paying back. So, paying points depends on a lot of factors.

If you don’t have the cash to pay points then it’s a moot point. (No pun intended). The main thing to consider is how long you plan to keep your home. In other words, will you keep the home past the break-even point? That’s when your accumulated monthly savings exceed what you’ve paid in points to get the interest rate down.

Paying points is probably a good investment if you plan to keep the home five years or more. Points can be considered an investment when it continuously yields a savings the longer you stay in the home.

A chart can be prepared to show you the options and when the break-even point occurs. Ask the lender to quote points in dollar amounts so you can easily see how much you’re spending.

It’s thought the point system is used only in the United States. That’s probably a plus for the creators of our financial system which enables more families to purchase a home who otherwise would not qualify. Get the point?

 

Finance

Plug in Points to See How Your Financing Will Pay Off

Posted on by How Life Works

One of the most innovative financial markets is the home mortgage loan sector. And, when you toss points into the mix it adds convolution to an already complicated process. Most buyers don't understand the concept of points and hesitate to ask or go to the trouble to learn about the process. They become overwhelmed and can be at the mercy of whatever the lender offers.

It's actually quite simple. Points are fees paid to a lender for a loan. The points are usually linked to interest rates with the more points you pay for, the lower the interest rate. You can view them as pre-paid fees. It's sort of pay now with points or pay later with interest.

If you have the cash on hand to pay points and you still can't decide if you should pay them to get a lower interest rate ask yourself what you would do with the money if not spent on points. If you're buying a home you probably have many needs for the extra money but don't be short-sighted. Invest for the long term.

Most lenders typically charge one point for the loan origination fee and additional points on loans that have interest rates under the current market rate. The lender gets some money up front in exchange for a lower interest rate. It's a win situation for both parties. You can check the newspaper or the Internet for current rates and points being offered and their combinations, which are many and negotiable.

Some points will reduce the interest rate and some won't. Discount points are based on how much money you borrow. One point equals 1% of the loan. For example, 1% of $100,000 would be $1,000. You can expect a reduction of about one quarter percent for each point paid. Paying points does not reduce the amount borrowed but how much you'll be paying back. So, paying points depends on a lot of factors.

If you don't have the cash to pay points then it's a moot point. (No pun intended). The main thing to consider is how long you plan to keep your home. In other words, will you keep the home past the break-even point? That's when your accumulated monthly savings exceed what you've paid in points to get the interest rate down.

Paying points is probably a good investment if you plan to keep the home five years or more. Points can be considered an investment when it continuously yields a savings the longer you stay in the home.

A chart can be prepared to show you the options and when the break-even point occurs. Ask the lender to quote points in dollar amounts so you can easily see how much you're spending.

It's thought the point system is used only in the United States. That's probably a plus for the creators of our financial system which enables more families to purchase a home who otherwise would not qualify. Get the point?

 

Finance

What to Do When Your Water & Sewer Bill Soars

Posted on by How Life Works

Save water and you not only save money, but also conserve one of our planet’s most valuable, natural resources. It’s like getting paid twice. Water conservation is one of the easiest things to do if you have a little discipline, but it’s so easy to turn on the faucet and let the water run.

When gallons of water go down the drain, so does your money. You can actually save a third time, because most sewer charges are based on the amount of water used.

Let’s take a look at the amount of water used daily for a family of four: 

Bathing or showering uses the most at about 80 gallons. Showering accounts for 30 percent of total water usage in the home.

Laundry uses about half that; dishwashing 15 gallons; cooking and drinking 12 gallons; and, for the big surprise, four people can flush down over 100 gallons of water a day. Including miscellaneous use, the total rounds out to 250 gallon a day, or 7,500 gallons per month. That’s a lot of water.

What can you do to save?

Make sure your commode doesn’t leak. Listen carefully for the tiniest dripping sound. If it’s old, you might want to buy a new water-saving model. Or, place something plastic inside the tank to displace the amount of water being flushed.

Use only as much water taking a bath as you need. A full tub is fun, but not necessary. For showering, use a low-flow showerhead. Get wet, turn off the water, and soap. Turn the water back on and rinse. When shaving or brushing your teeth, don’t run water during the entire task. Running water while brushing for two minutes can waste up to four gallons of water.

Most washers use up to 60 gallons per load, so use load settings on the smallest setting possible. Permanent press cycles use a third more water than the regular cycle, so use that feature judiciously.

Run your dishwasher only when full. The amount of water used is the same regardless of how many dishes you wash. At the sink, use hot water only when needed. You waste a lot of water waiting for the hot water to reach the faucet

Lawns are more resilient than you think, so water lawns and gardens only when necessary. Use mulch around plants to hold moisture. Water either early or late to prevent evaporation during the heat of the day.

A soaker hose conserves more water than a sprinkler and gets to the roots better. Native grasses and plants require much less water. Use a broom or blower to clean your sidewalks. Don’t wash them down with water.

If you wash your car, don’t let the water run continuously. Get a hose brush that has an on/off water switch. Wash your car on the grass to water it with runoff from your car.

Repair drippy faucets. The smallest drip can waste over 300 gallons a month. Check both inside and outside faucets. If you can’t fix it right away, place a container to catch the drip water, and use it to water plants or clean floors. Encourage your family to be water misers and your bank account will remain more liquid.

 

Finance

How to Tell if You are Ready for a Home Loan

Posted on by How Life Works

Few purchases that an individual will make within their lifetimes will rival that of buying their first home. When making the move from being a renter to being a homeowner, there are a few things you may want to consider before taking the step into home ownership, some of which may not come to mind until after the process of purchasing your home has begun.

The first thing you should keep in mind is whether or not you can actually afford to purchase a home. Home ownership brings with it expenses which you may not have considered previously.

Homeowners are required to have homeowners insurance and they must pay taxes on their property on a yearly basis. Depending upon where the home would be located, you could be looking at paying both city and county taxes on your home each year.

Homeowner taxes are calculated based on the appraised value of the home, and since most homes appreciate in value, you’re looking at an increased cost of homeownership over time.

When you go to secure a home loan, the lender is going to look at your credit history as well as your employment history. If either of these two happens to be in less than perfect condition, it’s going to be more difficult to secure a home loan than it would if you had perfect credit and a long employment history at the same job.

The lender looks at your employment history as a security factor. The longer you’ve worked at the same job, the more stable they consider your income, which makes you less of a risk.

Your credit history is going to play a big role in whether or not you qualify for a home loan, as well as what type of terms you’ll get as far as interest rates. Again, the lender is looking for stability in your life, but this time he’s looking at how well you’ve paid your debts in the past. If you have a blemished credit history, you’re–at best–looking at higher interest rates, and–at worst–not qualifying for the home loan.

Most lenders are going to require you to come up with 15 to 20 percent of the purchase price of the home as a down payment. If you don’t have this much cash on hand, then you’re going to find it much more difficult to secure a mortgage for the home you have in mind.

If you have no problems in your employment or credit history, you may be able to find financing for your home for as little as 3 to 5 percent as a down payment. As you can see, it’s important that you have your credit history in good condition before attempting to secure a home loan. It also helps if you have a good track record of staying employed.

Purchasing a home is a big step in an individual’s life. Being a homeowner is also one of the most rewarding experiences you can have. If your employment or credit history isn’t perfect, then you’ll need to put off homeownership until you’ve taken care of past bad debts or have established more time at your current place of employment. You may have to put off getting your home for a year or two, but you can get a home loan once you’ve established yourself as a good candidate for homeownership.

 

 

Finance

Need Cash for Retirement – Consider a Reverse Mortgage

Posted on by How Life Works

Many people aged 62 or older are “house-rich and cash-poor”. In other words their mortgages are paid off but they are living on limited fixed incomes.  Reverse Mortgages offer a way to continue owning and living in your home, while at the same time getting extra cash to live on.

You can take your cash as a regular monthly payment, as a single large lump sum, or as a line of credit that you can draw down as you need it.   You can use the money for anything you want. The loan is guaranteed by the equity you have in your home.

The important points to know about reverse mortgages:

Reverse mortgages are loans.  The lender pays you while you continue to live in your home. The amount you are eligible to borrow generally is based on your age, the equity in your home and the interest rate the lender is charging.  You retain title to your home and you are still responsible for paying property taxes and upkeep on the home.

You can live in the home until you die.  Depending on your reverse mortgage, repayment of the loan is due if you die or if you move or sell your home, or if you reach the end of the predetermined loan period. Usually if you die, the lender does not take title to your home, but your heirs must pay off the loan. Generally they will do this by selling or refinancing the home.

Your home value will always cover what you owe. Your legal obligation to repay the loan is limited by the value of your home at the time the loan is repaid. You cannot be liable for more than the value of the home.

Reverse mortgages use up the equity in your home. The loan amount does goes up over time though. Interest is added to the principal loan balance each month, because it is not paid on a current basis.  You will have fewer assets to leave your heirs.

Reverse Mortgages are regulated by the federal Truth in Lending Act. This requires lenders to disclose the costs and terms of reverse mortgages. This includes the Annual Percentage Rate (APR) and payment terms. If you choose a credit line as your loan advance, lenders also must tell you of charges related to opening and using your credit account.

There are three types of reverse mortgage – FHA-insured, lender-insured, and uninsured. Each type has different costs and features and you should consult with family members, your attorney, or financial advisor before deciding which is best for you.

Reverse Mortgages can be a great way to add to your monthly income during your retirement years.

Check out the following great sponsored links for Reverse Mortgages:

Finance

How Paying More on Your Mortgage Can Save You Money

Posted on by How Life Works

It's the American dream to own your own home and dreamers will go to any lengths to accomplish this even if it means borrowing thousands of dollars to be paid back over a 30 year period. It's quite an obligation to make 360 payments month after month with the bulk of the money going toward interest, at least in the beginning.

The interest on an average home over a 30 year period can account for twice the cost of the home. Interest is working against you 24/7/365. Wouldn't it be wonderful if you could pay off your debt years sooner and save thousands of dollars?

You can. It just takes discipline and perhaps a little budget adjusting. It's no secret that paying the mortgage twice a month, instead of only once will save you thousands and pay off your debt years sooner. Some call it the bi-weekly mortgage plan.

For example: Let's say you paid $80,000 for your home and got a 7% loan for 30 years. If you divide the payment in half and pay it every two weeks you should save $25,000 in interest payments and reduce the term by 8 years.

Not bad for a little extra work. Of course, the higher the loan and interest, the more you save. You're paying less interest and more on the principal. The extra payments bring down the principal and interest faster.

Can just setting up a shorter mortgage term in the beginning accomplish the same thing? Essentially yes. But many people cannot qualify for a shorter term mortgage because of the higher payment. With the bi-weekly plan, you can take control yourself and enjoy the flexibility.

There are many companies who will set this up for you for a fee ranging from $100 to $400. Or, some will do it free but charge a transaction fee each time you make a payment.

Can you do it yourself? Yes, but talk to your lender and read the fine print in your contract. You may have a pre-payment penalty for paying off the loan ahead of time. Some lenders also tack on a service fee each time you make the extra payment.

Banks can also provide you with a bi-weekly calculator to let you determine how much you would save and how soon you would actually own your home. You'll also save on private mortgage insurance (PMI) by paying off the loan early.

By paying bi-weekly, you're actually paying one extra payment a year and that makes the difference. You can accomplish the same thing by making an extra payment whenever you can of any amount. When you do this, write a separate check with a note that states the money should be applied to the principal and not the interest.

Most financial institutions are happy to help you with saving money on your mortgage but it's up to you to get the financial ball rolling. For about the cost of dinner and a movie for you and your family each month you can be debt free years sooner and save thousands of dollars.