Top Ten Ways: How to Save Money on Your Home

Homes are places to live - but also investments

Paying a mortgage for most people is way better than paying rent. But that doesn't mean that all the associated costs that we get from home ownership are equally embraced. There are lots of costs in owning and running a home. Here are my top ten tips for controlling those costs.

#1 - Get MassSave out to your home ASAP. MassSave is structured on an interesting concept. Get the utility companies to pay a fee into a general fund that is then used on home consultants and processes to save that homeowner money. How much does it cost to have MassSave out to your home for an energy audit? NOTHING. And you'll almost certainly get free light bulbs out of it. I got over $70 in light bulbs (that will probably save me $10/month) for free, plus $1500 in discounts for certain upgrades on my equipment. They'll also come out -again, for free - and plug up holes in your house, and weatherstrip doors and windows. There is generally no cost to the homeowner for the basic service, and the savings add up every year.

#2 - Get good at yard work. Having the pros come to your house will help your lawn looks its best - but that cost comes at a price. A few years of doing it yourself can add a lot to the bottom line, even after you've bought all the tools for the job. Of course, lawn and leaf clean up is another story - the cost/value matrix is more favorable here for those who have a lot of leaves and not a lot of time.

#3 - Learn to paint. Buy nice brushes, good quality paint, and you are halfway to being a successful painter.
Learning how to paint yourself saves money AND can
build equity.
Learning how to be a good painter can keep your house looking fresh, and it's a fairly easy skill set to pick up, with inexpensive tools to help do the job. With a cost that can be $300-900/room, a little practice painting can make your house more valuable, and save on expenses. I don't recommend complicated paint jobs for homeowners, like painting cabinets and changing from oil paint to latex paint, but room colors and the exterior painting is pretty easy.

#4 - Check your assessment. Make sure you aren't over assessed. It doesn't happen often, but when it does, those tax dollars are coming from you unnecessarily. Keep an eye on your assessed value, and make sure you know what your biggest asset is truly worth.

#5 - Refinance. If there's a drop in rates and you can take advantage of a re-fi, you should.
Controlling both PMI and Financing
Costs is a huge step to improving
Anything more than 1/3 of a point should be considered, or anything with a 6-9 month payback after charges.

#6 - Drop PMI. With home prices going up, many people will be able to shed their PMI payment. My clues as to how the system works will help you drop it as soon as you can. With PMI payments often hundreds of dollars a month, shedding it as quick as possible can be very helpful.

#7 - LED Bulbs. Prices are dropping every six months now, and these bulbs are game changers when it comes to electricity consumption. Buy 'em during sales when they are less than $10 a bulb, and put them in the highest use areas first. Here's why!
These little bulbs can add up
to big savings.

#8 - Pre-pay 65% of your oil in August, when prices are low. Right now, I see oil prices at almost 20% cheaper than they were in February last year. Pre-paying for oil can save you hundreds of dollars if you time it right. No caps, no contracts - all of which are pretty expensive right now for the protection they offer.

#9 - Stay on top of water damage. Don't ignore wood that needs paint, or places where you know the flashing isn't working. Wood that gets wet rots, and the more it rots, the more it costs to fix it. This is a cost that grows exponentially over time - so don't ignore it.

#10 - Bid, Bid, Bid. Time to get some work down? I know Joe the plumber is a good guy, but just to be sure, call four of his plumber friends and compare estimates.
Get those bids in writing!
Be clear about what you want,
and have them be detailed about what
you get.
It is common for contractor charges to vary as much as 100%, and while I'm not a fan of picking the lowest bid (in the 'too good to be true category'), multiple bids gets you a chance to meet the person who'll stand by the work, and learn about the problems your job may entail. You work hard for you money - and so do they - so keeping the dialogue open in the beginning is huge to control costs AND getting what you want the first time.

Should I be Pre-approved for A Mortgage Before I look for a House?

In this post, we're going to address several topics.

1) What does it mean to be pre-approved?

2) Should I look at houses before being pre-approved?

3) What do I need to do with my pre-approval before writing an offer?


What does it mean to be pre-approved for a mortgage when buying a house?

Regrettably, pre-approvals take many forms. Ideally, a pre-approval will examine the following.

1) Income! Not a look at what you THINK you make, but what you make. Hello, Tax return.
2) Credit. Credit is more than just a score people! But scores matter
3) Debt-to-income. The level of debt-to-income that you have is probably the most important indicator of what you can afford. But most people stop looking after they get the score, which is related to - but not a copy of - the debt to income (or DTI for short).
4) Ways to improve your loan status - by increase credit scores, fixing DTI, and solving other issues.
5) Understand your leverage options. 96.5? 95%? 90%? There are big differences in loan programs, and you should be aware of the different costs and problems you will have as the leverage goes up or down.
5) Cash-on-hand. It takes cash to buy a house! If you haven't had your cash position discussed, you may not be able to do what you think you can do.
6) Other issues: H1B visas can be harder to finance in certain situations. Condos or Condexes could be a problem.
When you've reviewed all these items, you truly have a pre-approval. More importantly, you are aware of where you might be "tight", and what you might do to improve it.

If you have a pre-approval already, did you examine all these items? No? I thought not. But you will need to if you then proceed to get a mortgage. And in this environment, there are more than a few snakes in the grass that could turn your home buying dream into a nightmare, if you're not prepared. We'll talk more about this in the last section.

Should I look at houses before being pre-approved?

Sure! No law against that yet! Let's get out there and look. One problem though: What if you see something you like? Then what do we do? Hmmm. Well we have to go get a pre-approval, but that takes time, and the less time it takes the less thorough it is, and the more risk you are taking on! So you can go looking, but you should really get a pre-approval - a COMPLETE one - as soon as you think you might move. Here's some good news. You don't have to committ to a lender when you get a pre-approval, so you can shop around later. Rates and programs change all the time, so there's no point in worrying about that just yet.  Think of the pre-approval process as a lender interview. You don't have to hire them, if you find a better deal elsewhere, but its good to have one relationship out there.

What do I need to do with my pre-approval before writing an offer

The question here is truly, "How do I get ready to make an offer on the credit side?" Here are the things you need to consider.

1) Credit improvements. Credit scores qualify you for different "levels" of programs, and those levels have different rates. So if your composite score is 710, you might be able to get a loan at 4.25%. But if it's 720, you might be able to get a loan at 4.0%. Folks, 4.0% is a lot better - and you only need 10 little points. Many lenders are very good at this type of credit clean up, BUT it can take time - up to a month or more - and that is not time we have when we are writing offers and buying houses! (Typically you only have a month to get a loan, and you'll need every day of it). Also, if you are doing it "in process" you don't know that you will be successful, and that can create serious problems. The best thing to do is get that score fixed before you find the house!

2) Explore your leverage
I've had many buyers set on getting FHA loans at 96.5% Loan-to-Value (or LTV). But guess what? Loans at 95% are often easier to get, and have better rates and costs. All you need is 1.5% more. On a $300,000 house, 1.5% is $4500. It's a lot, but it's often doable, especially if the better program saves you $4500 every year! Many times you can avoid PMI at 90% with certain lending programs.  That can save you serious dough! If you're close to getting a better mortgage with a slightly bigger down payment, it's good to know how much you'll need - and when you'll need it. Banks don't like "unexplained" deposits to show up at the last minute, so calling your buddy at the last minute isn't going to work! Figure out how to get there - ahead of time - and the process will be much less stressful.

3) Watch your income! Self-employed? These are harder loans to do - so make sure your lender knows that's the case.

Once you've done these things, you're ready to write that offer. And the mortgage process won't freak you out as much. And that's a good thing.

**Notes: The Author is not a mortgage lender, but he plays one on TV.

Southborough Summer Nights Closes out with a Bang

Every Year for the past 10 plus years, Southborough wraps up the summer with a good old fashioned community event. This year the fireworks were surprising good. It doesn't happen without the sponsors, and I looked for a list to link to but didn't see one.

Anyway, there's a nice write up here:

And a great picture of two very fun loving children.

Picture courtesy of the community Advocate
and the Heisler siblings...

Most Expensive Towns in Metrowest

Make your Home Purchase Dollars go Further

I've noticed that a lot of new buyers are coming in the market - but with the rise in prices, finding something has gotten decidedly tougher for everyone.

Here are the towns that I track most closely on the blog. But if you're looking for a town that's not here, just ask! I'll tell you where you stack up.


And for Comparison:


Commentary on the changes in the two reports

  • It's worth noting, that the ORDER of the towns doesn't change much. Buyers are smart - if one town gets expensive, sooner or later they'll find the town that is more bang for the buck, and they'll buy property there until it's an even trade off again.
  • Everyone is higher - real estate truly is a rising tide that lifts all boats.
  • Natick has extended it's lead over everyone - making me think that prices are due to stall.  But you Knew that already, right?
  • This chart doesn't tell you who's changed the most on a percentage basis though. For that, you need to go here!