Home Maintenance Random

What’s Your Number? |How We Plan to Save Money on Our Mortgage

June 3, 2015

Every month we deal with an annoyance known as PMI, and we’re ready to kick it to the curb! PMI stands for private mortgage insurance. This type of insurance is usually required by your bank if your down payment is less than 20% of the home’s sale price or appraised value. Basically, banks want you to have skin in the game when it comes to buying a home. If you’re down payment is less than 20%, they tack on PMI as a way to cover their backs should you default on the loan.  The terms of PMI vary, but generally, it costs about 0.25% – 2% of your loan balance per year, depending upon factors like: loan term, credit score, and credit score. For us, it’s a little over $100 a month.  Lenders are required to give the buyer written notice on how many month and years it will take for them to pay 20% of the principle. You can request an early cancellation of your PMI if your equity grows to 20% due to additional payments or home-price appreciation.

Home prices around here are currently way more than we paid 3.5 years ago, and we’re pretty confident that the updates we’ve done have given us enough equity to edge past that 20% mark. If we don’t have that 20% equity in our home, it still may be a win for us. Our property taxes are currently valuing our home at that 20% mark – but you can’t use that to convince your mortgage company to cancel your PMI. We already asked. To verify that your home has enough equity, the mortgage company wants to have it reappraised. If it comes back that our home is not valued at 20% or + mark, then we can take the appraisal to the county tax office and have them lower our property taxes based on the new appraised value. Does that make sense? All of this can get confusing. Basically, we need to get an appraisal on our home. If we have 20% or more equity in our home, then we can drop the $100 a month PMI. If we don’t have 20% or more equity in our home, then we can have our property taxes lowered based on the new appraisal.

Before we can get an appraisal, however, we need to take care of a few maintenance things around here. To make sure we’re focusing on the right things pre-appraisal, we got some advice from Blair’s grandfather, a professional appraiser. And even though he appraises homes in Louisiana not Texas, the same basic principals apply. One thing he told us that stood out was the fact that a home appraisal is different from a home inspection. Home inspectors usually go over the home with a finer toothed comb than an appraiser. An appraiser will usually only look at the overall interior and exterior of the house. So an appraiser is not going to check that we have all the right GCFC outlets in the right places, but he/she will note if we have two different garage doors.

So here is our current “get it done” list:

1. Fix wood rot + repaint those areas – We have spots on the exterior of our house that have started to rot. We don’t have any rain gutters, so water will splash everywhere and sometimes soaks certain areas of  wood on the exterior of the house. We’ll need to either replace the wood pieces or fill them with epoxy. We’ve already used epoxy in a few places, but we still need to repaint them.

2. Change the garage door – This won’t be something that we do, but something that we’ll definitely pay for. We had one of the doors replaced about two years ago when it would open anymore. They don’t make the same color / style of door anymore, so we were left with two similar, but different looking garage doors. They aren’t totally noticeable, but I’m sure it would knock a few points down in the appraisal. Oh yeah, and before we can replace the door we need to clean out + organize that side of the garage so they can actually have room to change the door.

garage

3. Fix the fence – We mention in Monday’s post that a section in the backyard is leaning. After a few video tutorials, we feel confident doing it ourselves.

4. Finish landscaping outside – Outline, cultivate and plant flower beds. My least favorite thing in the suburbs. I grew up in the country, it never was that important.

5. Power wash the bricks – In this post we lamented about the splash back on the house when it rained. The rocks we added are making a big difference (no more dirt splashing on the house), but the bricks still need a good power washing.

6. Repaint the front door and threshold – We painted it a few weeks after moving in, but now it’s time fore another coat.

7. Finish painting door and trim + finish changing all the door knobs/hinges – The doors and trim are painted a dingy cream, and most of the knobs are brass and dented or rusted. We have most of the knobs, but we need to buy new not-busted-brass hinges. Really, it’s about us not being lazy anymore and finally finishing all of it.

8. Get a fan for the sitting area in the kitchen – Hey guys, we have a secret room. A sitting area in our kitchen that we have never shared with you. It’s intended to be a breakfast nook, but… we do what we want. There used to be a pendant light there, but we took it down to add a fan instead. However, we haven’t found one that we like yet, so we’ve just had a bracket hanging down forever. (Not having a ceiling fan in Texas is practically a state offense!)

sitting area in kitchen here-lately.com

9. Fix holes in bedroom wall – We recently had an electrician add an outlet in our library. Holes were made, feels were conflicting.

10. Fix cracked tile/grout in master bath – I hate the tile we have in the bathroom, but not enough that I want to completely gut it right now. So opting to fix those few things should suffice for now.

11. Refinish/replace hall bathroom tub – I don’t know if we’ll actually replace the tub, seems like it could cost a lot, but something definitely needs to be done. The bottom finish is gone? Not sure, but it’s been stained since the day we moved in which makes it look filthy even after scrubbing for 45+ minutes.

12. Paint girls’ room + get window dressings -Now that we’ve swapped the girls’ room, we need to start making it their own. I’m still fighting for Akira to have one of those loft style beds in her room. But for the appraisal we painting should be enough to get by for now.

13. Replace closet doors in Eleanor’s room – We got sick and tired of the doors in there always coming off the rails, so we temporarily removed them. Now that it’s Eleanor’s room and she doesn’t mess with the closet doors, we’ll just reattach them.

14. Organize kitchen desk – Nothing major, but this area has become a dumping spot for mail and clutter. Per Blair’s grandfather things need to look tidy, so we’ve got to get this catchall organized once and for all.

here-lately.com

15. Update the downstairs bathroom – This will take a lot of work from replacing the sink, some tile, some of the drywall, (we’ll have pictures as to why if we do this project), as well as removing wallpaper and painting. I’m not sure if we’ll get to this or if we’ll have the money saved to make it all happen before the appraisal, but it would definitely add more value to our home.

We’ll have blog posts as we hit all these items on the list. Our goal is to have this done by the end of September. Then we’ll send in the paper work to request PMI cancellation and, hopefully, get the house appraised in October. We’re trying to get it done before winter kills off most of the plants outside. It’s coming really soon, but I think we can do it. (<-Our favorite famous last words.)

save money on your mortgage

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