Living Happily on a Shoestring: Those Who Can, Should...

Photo by Szczel

by Christine Wilkinson

… put your money where your home is. Today’s column is geared to those not in my flailing boat*-- it’s for those of you who planned a lot better and still have that thing I used to call “disposable income.” And my article is two-tiered: 1) Refinance Now! and 2) Energize That Old Home!

I’ll never forget having to present at Back-to-School night (a surprisingly nerve-wracking task for a teacher, by the way) when my husband and I were working out the final details of our first home purchase. I was an utter wreck, but Chris Clark of MetLife Home Loans was just what I needed, an utterly cool cat mortgage guy, the most easygoing, get-the-job-done-right kind of guy. So I called him today to be sure I was getting my facts right for this article. He confirmed my hunch:  Refinance now if you can.

Then he started talking numbers and using unfamiliar acronyms, and I felt a little dizzy and distracted, so let’s I hope I have everything straight. As of today (9/30/10), if a person with good credit and an acceptable DTI (debt to income ratio) who needs a mortgage loan for $417,000 or less could refinance and lock in at a fixed rate of 4.25 percent. That's crazy good, right?! I remember feeling thrilled to lock in at 6 percent not all that long ago. (Please feel free to email me at slogalongblog at gmail dot com if you want Chris’s contact information.)

Now, on to Energizing! If you do have some money in reserve, there has never been a better time to put it into your home. You’ll get cash back from the government, significantly increase your home’s resale value, and slash your utility expenses. I am passionate about the green movement so I’ll try to make the main points under the Obama administration's Tax Relief Program simple. For the most part it works like this: The government will give you a tax credit for home repairs that qualify (not a tax deduction but a credit, which means you get every cent back at tax time). This offer applies to your existing primary residence; it does not apply to rental properties or new construction. Also, it does not cover installation costs.

For homeowners who buy/install approved products, the government will pay 30 percent of your costs up to $1,500. For example, if you pay $6,000 for energy efficient replacement windows, you will get $1,500 back (making your windows cost only $4,500). However, if you spend $4,000, you will only get $1,200 back (30 percent of the $4,000 cost, so now the total cost of your windows is only $2,800). Holy Mother of Savings!

Let me give you examples of upgrades/repairs that qualify: energy efficient windows and doors; solar water heaters; metal and asphalt roofs that reflect the sun; insulation and weather stripping; energy efficient heating, ventilating and air conditioning (HVAC); and biomass stoves (I have no idea what those are but they sound impressive). Find the guidelines here.

Want to save more than $1,500? For existing homes and new construction, the government will pay 30 percent with no upward limit (!) on geothermal heat pumps, residential small wind turbines, and solar energy systems.

If you have the money, please, go ahead and spend it! It gets the economy circulating, upgrades your home and you get a bargain in the process. Everybody wins (especially Mother Nature).

------

*flailing boat, and in the name of a bit of fun trivia:  Did you know that the expression “three sheets to the wind” has a nautical origin?  My grandmother said it all the time, and I finally Googled it this week to find out why in the world that would mean intoxicated. (I had the idea it had something to do with hanging laundry; I was seriously wrong.) A sheet was the name for the rope used to hold sails in place, and back in the day it took three sheets to tie a sail in place. If three sheets were untied, or “to the wind,” the boat would stagger off-course, much like a drunkard.Who knew?



Christine Wilkinson is a veteran middle school teacher, who holds a Master's degree in Education and is currently job hunting. Christine is also a freelance writer who has had articles published in the Raleigh News and Observer and most recently in the Washington Post. She has lived most of her adult life in the DC-Baltimore area, although she recently returned from a three year detour in the South (Raleigh, NC). She is married with a 7-year-old daughter, which prompts her to observe: "While I may be struggling in this economy, I lead a rich life blessed with a great family and amazing friends."

Christine welcomes your comments below.