I recently read the book "Save Big". In this book, Elisabeth Leamy shows you how to cut your top 5 costs and save thousands! Today, I am going to go over Section 1 in this book, Houses, Home of Savings.
Chapter 1: Buy a House ASAP.
- Use your housing payment for two purposes, nest and nest egg, by buying a home as soon as you can afford it. Your house is your home and an investment.
- Lock in your housing payment by buying instead of renting (monthly mortgage payments do not go up, but rent does).
- Use somebody else's money to make money on real estate. Normally, home values go up. The bank is not getting a return on the value of your house, you are!
- Make sure you are settled and secure before you buy.
Chapter 2: How much should you spend.
- Don't rely on the mortgage industry to tell you what you can afford. Usually, they will approve you for a loan that you can barely afford. Always try to borrow less than the maximum loan you could take.
- Start a special house account to save up a 20 percent down payment.
- Make your mortgage payment equal to your rent payment.
- Turn your house savings account into your house maintenance account after you buy a home.
- Use your mortgage interest tax deduction to prepay your mortgage.
- Buy below your means.
Chapter 3: Doing the Deal.
- Negotiate to pay your agent 2 percent instead of 3 percent.
- Consider buying without the help of an agent.
- Learn the seller's needs and play to them. For example, if the seller needs extra time to move out of the house, agree but only if they agree to lower the price or pay some of your closing costs.
- Offer 10 percent less than what you want to pay.
- Ask the seller to pay some closing costs.
Chapter 4: Getting a Good Mortgage.
- Spring for a 10-, 15-, or 20-year mortgage if you can afford it. This will knock of thousands to hundreds of thousands of dollars in interest.
- Choose the right loan for your situation.
- Ask about FHA loans that only require 3.5 percent down.
- Don't pay points unless you plan to stay put.
- Get your rate lock in writing.
- Never take out a loan with a prepayment penalty.
Chapter 5: Choosing a Mortgage Professional.
- Get three full-fledged Good Faith Estimates.
- Don't tell a mortgage professional that you were referred to him - at first.
- Consider the interest rate and the closing fees before choosing a lender.
- Pay either a loan origination fee/broker's fee or a yield spread premium, depending which is more advantageous to you.
- Compare and contrast the lenders' Good Fait Estimates, using the breakdown in the book.
Chapter 6: Cut Your Closing Costs.
- Scan your Good Faith Estimates for junk fees and ask the lender to drop them before signing. Some junk fees are Title administrative fees, title document preparation fee, title examination, title insurance binder and courier fees.
- Ask you lender to sign a letter guaranteeing its remaining closing fees will not go up more than 10%.
- Shop around for title insurance and services.
- Make sure standard government charges are not padded.
- Bring all your key documents with you to closing.
Chapter 7: Appeal your Property Taxes.
- Find out when to expect your tax assessment, then work fast so you don't miss the deadline.
- Work backwards from the assessment ration to figure out if the tax assessor has overvalued your home.
- Get the property worksheet and sales list that the government used to assess your home.
- Gather your own comparables that prove your house is worth less or others are worth more.
- Work your way through the system from a written appeal to a hearing and beyond.
Chapter 8: When to Refinance.
- Apply the Refinancing Rule of 5's to decide whether to refinance. New interest rate .5% lower, add 5 years or less to the length of your loan and be able to recover your closing costs in 5 years or less.
- Reduce your loan term when you refinance, if possible.
- Divide your closing costs by your monthly savings to see how long it will take to recover your costs.
- Do not fall for a "no-cost" refinancing. It will cost you. A lot.
Chapter 9: Pay off your Mortgage Early.
- Use your mortgage interest tax deduction to prepay your mortgage.
- If you are paying PMI, cancel it as soon as possible and use that amount to prepay your mortgage.
- Don't pay some service to prepay your mortgage for you.
- Check with your mortgage company to see if it has any rules about how your prepayment must be made in order to be credited accurately.
Chapter 10: Sell your House yourself.
- Look up comparable homes and see what they sold for.
- Attend open houses to scope out your competition.
- Interview real estate agents or hire an appraiser to help price your house.
- Discount your house slightly to make it alluring to potential buyers. You will still be saving since you will not be paying a realtor.
- Welcome buyer's agents but try to pay them less than 3%.
- Hire a real estate attorney and ask your lender to help.
for 15 minutes before putting them in the oven.
or a slice of bread on the area. Make sure you throw it away somewhere safe so kids do not accidentally find it and play with it afterwards.
. If they do, they normally ask that you bring a bag and shovel. Since it is free, you will be doing the work of loading it into your vehicle.
cold than an empty one. Plus, if your electricity goes out, your freezer will stay cold longer!
