Refinance Your Primary Mortgage

Refinancing your mortgage will typically be the best option, as it can save you hundreds of dollars per month if you’re refinancing from a high interest rate to a lower rate. Let’s look at an example, lets figure that I took out a $250,000 mortgage loan 5 years ago with an interest rate of 7.25%. At this loan amount and this interest rate, my monthly payment will have been approximately $1,705.00 per month. As of the time of this post, I’ve seen interest rates for 30 year mortgages as low as 5.75% – the interest rate will depend on your lender, your credit score, payment history, etc. so you’ll have to talk to a mortgage broker prior to getting a firm rate quote, but for the interest of our example, we’re going to figure that we can get a loan at a rate of 5.75%. For simplicity sake, lets compare a $250,000 loan at 5.75%. At this interest rate, our monthly mortgage payment will be approximately $1,459.00. This is a savings of $259 per month. A couple things to remember are that:

1. In this example, we figured that we’ve had our original loan for 5 years. If that were the case, we wouldn’t still need a $250,000 loan, we’d actually only need a loan for about $235,950 (let’s figure $236,000 for simplicity). Plugging that amount into a payment calculator will yield a monthly payment of $1,377.00 per month, yeilding a savings of $358 per month.
2. You’ll have to take into account loan processing fees. Typically you’ll be paying processing fees, points, etc. which could end up being a couple thousand dollars. When I refinanced, I wrote a check for all of these fees ($2,900 in my case), however I believe that you can have these fees rolled into the cost of your new payment.

Depending on your situation, your current mortgage interest rate verse current market interest rates, closing costs and actual savings, it is always best to consult a trusted professional to see if refinancing would be a good choice for you and your situation, however as you can see from the above example, refinancing offers a great way to decrease you monthly payment.

Reassess Your Property Taxes

This option will not necessarily save you as much money, but nonetheless can definitely be a money saving option. If you bought your house in the last 3-6 years, chances are that you paid more for you house than it is worth now… especially if you live in California. Let’s take a homeowner in California for this example, and lets figure, for simplicity, that this homeowner bought a home 5 years ago for $500,000 and property taxes are currently 1%. This will mean annual property taxes of $5,000 per year, or about $417 per month. Lets now figure that this home is now only worth $350,000. If this home were purchased at this amount, property taxes would be only $3,500 per year or $292 per month. Should the homeowner get their property taxes re-assessed and adjusted, they’d be saving approximately $125 per month.

So how do you go about getting your property taxes adjusted? There are many private companies out there that assess property values and adjust your home value with the county assessors office to lower your monthly/annual property tax payments.

Again, I recommend consulting a trusted professional before trying to have your property taxes adjusted because in some cases, property values will have increased, resulting in higher property taxes, in these cases, it obviously would make more sense to keep the current property tax and assessed home value in place.

5 Simple Tips to Save Money on Energy

1. Minimize the electricity usage – grab a book! As days in the winter are shorter than days in the summer, we tend to spend more time inside. During this time, make sure that lights are only turned on in rooms that people are in, and rather than turning on the TV, or browsing the internet, grab a book.
2. Run ceiling fans in reverse. If you have a ceiling fan, look for a switch on the base of it and select the reverse option. Running ceiling fans in reverse will help circulate the warmer air that gathers at ceiling level back down toward your living space.
3. Don’t turn that heater on! Look for other ways to stay warm while inside, if you have a fireplace, start a fire. If you don’t have a fireplace, grab a blanket and cozy up on the couch, or grab a sweater.
4. Stop any cool air drafts. If your windows and doors aren’t properly sealed, you can be wasting tons of energy on cooling costs, as your heater pumps away, it is being directly offset by cool air leaking in from underneath doors and around poorly sealed windows. Place weather stripping or rolled up towels at the base of doors, and make sure all windows are properly caulked and sealed.
5. Turn down your water heater. Many water heaters are set to about 140 F by installers, try lowering this 10 degrees, if you don’t notice a difference, try lowering it 10 more. Dropping your water heater from 140 down to 120 can help save 5-10% on heating costs.

5 Timely/Costly Tips to Save Money on Energy

1. Install Energy Star appliances. Though costly up front, Energy Star appliances can save you from 10-20% on your energy costs.
2. Install storm doors and dual pane windows. Storm doors are thickly insulated and help keep cool air out and warm air in, likewise, dual pane windows will do the same thing.
3. Install a programmable thermostat. By installing a programmable thermostat, you can guarantee yourself that you won’t forget to turn the heater off. You can set it to 60 degrees from 8am to 6pm (while you’re at work). That way, you have a little piece of mind that you didn’t leave the heater on while you’re at the office.
4. Re-insulate, and/or add additional insulation in walls and attic. If you’ve done all of the above and your house still doesn’t seem to hold heat, then your house may be improperly insulated. Installing new insulation in the walls and attic can help your house retain heat and save you money on heating costs.
5. Seal your air ducts. Make sure that all of the ducts that deliver air from your furnace are properly sealed. Any air escaping the ducts will be lost, thus increasing your energy costs.