Giveaways Abound! (Skil Cutter, Two HD $50 Gift Cards)

Howdy readers, just a reminder that today is the last day to enter our Skil Cordless Cutter Giveaway.

Also, if you’re into giveaways, check out these two:

• $50 to Home Depot from Todd @ Home Construction Improvement
• $50 to Home Depot from Jim @ Bargaineering

Good luck!  Our February giveaway is just around the corner…

Google Error – This Site May Harm Your Computer on January 31, 2009

Editor’s update:  Google Explains this Here.

Google has had a huge bug this morning.  Google searches this morning (January 31, 2009) result in every site that comes up as the words “This Site May Harm Your Computer“.  I confirmed this with several friends online and it is definitely affecting virtually all major sites (including cnn.com, foxnews.com and others, and this one).

What is the “This Site May Harm Your Computer” error?

When functioning properly, it means that Google’s search bot has found a problem with the site that is likely to damage a visitor coming to the site (e.g., malware, spyware, exploiting IE / Firefox bugs, etc).  It has been the source of much frustration to web masters because the error normally lingers for 6 weeks or more, even after the issue has been cleaned up by the webmaster.

What can you do to fix it?

Unfortuantely, this problem is happening at the search engine and not on individual sites (which is very bad, because most people trust Google implicitly).  As a result, there’s nothing individual webmasters can do. Further, it will probably take some time for Google to find and resolve the bug. (Wonder if heads will roll up at Google’s place).

What Effect Will It Have on the Web?

Our guess is that traffic will be way down today, and e-commerce down even further.  Some people may not click through sites due to the error (which requires extra navigation to get to, as Google brings up a warning page on the site instead of just taking you to the site).

E-commerce will probably be affected even more as people are psychologically affected by the error.

When will it be fixed?

Update: 10:43am: It appears that at least the east coast U.S. data centers are performing correctly.

What do you think? Tell us how this error has affected you this morning, and whether it is still occuring in your region.

Digital Television (TV) Conversion Facts and FAQ

There is a lot of information floating around about the digital television conversion. So much info, that it’s rather confusing. But, here is what you need to know.

What is the Digital TV Conversion?

Right now, most TV stations are broadcasting digital and analog signals. Some, typically older, televisions only have an analog tuner that requires an antenna to receive different channels. But, the FCC (Federal Communications Commission) has decided that TV stations will stop broadcasting the analog signals. These plans were set in motion since the 1990’s.

Who Does the Digital TV Conversion effect

This conversion will only effect viewers who rely on an over-the-air, analog signal. You won’t be able to use rabbit ears or any other analog antenna to watch television.

This will not effect anyone who:

• Pays for television service – satellite, cable
• Uses a digital tuner – lots of newer televisions have digital tuners that receive over-the-air, digital broadcasts

When will the Digital Conversion Occur?

The original cutoff date was February 17, 2009. However, many people feel the nation isn’t ready for the switch and it will leave some 2 million people without television. President Obama wants to delay the switch to June 12, 2009 and the Senate has even approved. Soon, Congress will take a vote and we’ll have a definite answer.

TV Converter Box

If you don’t want to purchase a new TV, you can simply purchase a converter box. These boxes convert digital signals to analog. They run about $40 – $80. Amazon sells a converter box for $52.99. The government was issuing coupons to offset the majority of this cost. Right now, there is a wait list for the TV Converter Box Program. They still issue coupons, but only as older coupons expire.

Benefits of the Digital TV Conversion

This switch has some great benefits. It frees up part of the broadcast spectrum for other uses. Several proposed uses include public safety services and advanced wireless services. Bottom line, it spurs growth and innovation and I’m a big of both.

What do you think? Do you need a converter box?
Image courtesy of daveynin

Door Knob and Deadbolt Replacement

In the name of Reduce, Reuse, Recycle, I just had occasion to install the former front door hardware from our rental onto our door to the garage in our home.  

Ever since we moved in, the door to the garage has required a secret handshake to open.  Then, finally, the knob gave out all together, and it spun around in circles, doing nothing from the inside.  Fortunately our garage access was not actually blocked, since whatever happened that final time pulled the latch in just enough that the door could be pulled open or shut without requiring the knob to do anything but be a handle.

On the down side, to keep the door closed, we had to throw the deadbolt – a source of frustration to the person still inside the garage when one of us would notice, “huh!  the door’s not closed!” and then lock the other of us out there.  Oops.

But all that’s changed now!  We replaced the hardware at the rental and decided to use the old models on our own home.  (Not that new door hardware is expensive – $20 or so at a Big Box … but it was just one of those things we were “living with” until now).

Since it’s tremendously easy to do, no one should ever be as silly as we were and not replace broken hardware.  Here’s the tools and steps to replace a deadbolt and lock on a door:

Tools Required

Requires only a phillips-head screwdriver.

Steps to Replace a DeadBolt and Door Knob

Step 1: Deadbolt Removal – Unscrew the two screws on the face of the deadbolt, and pull the two sides (the one on either side of the door) apart from one another.  Unscrew the plate holding the bolt itself into the end of the door, and slide the bolt out.

Step 2: Knob Removal – Repeat Deadbolt removal process for knob.

Step 3:  Slide Deadbolt latch into door (it indicates which side is “Up”).  Then connect the two sides of the deadbolt through it, and tighten the screws. 

   

Step 4:  Insert the knob latch through the side hole on the door, then slide the half of the knob with the rod through it.  To attach the other half of the knob, note the orientation of the hole on that half – the rod should be oriented so that it can fit snugly.  Then tighten the screws to attach both sides of the knob together.

Step 5: Check strike plate to verify that the door latches (I ended up having to move ours about a half-centimeter, so that it would “catch” and actually latch the door closed).

Final Thoughts

We hope this quick tip helped you if you’re thinking about replacing door hardware but are a little intimidated.  Dont’ worry, all new door knob hardware comes with detailed instructions and the job is actually really easy.  You shouldn’t wait as long as we did

What do you think?  Are you holding off on a project that you know is easy?

Makita 7pc. Lithium Ion Combo Kit (Drill, Impact Driver, Reciprocating Saw, Circular Saw, Grinder, Flashlight, Radio)

A Makita Lithium-Ion (Li-ion) combo kit is a great way to pick up a great set of cordless tools and accessories at a price significantly below purchasing the same tools individually.  Lithium Ion technology has become very popular among do-it-yourselfers and professionals for its long life, high power output, and relatively quick charging capability.  Li-ion batteries last as much as 50% longer than their NiMH counterparts, and pack a significant resevoir of power to get even the toughest fastening and cutting jobs complete.  This Makita kit incorporates 18V Li-ion batteries (two included) that can be swapped between every tool in the kit.

This lithium ion combo kit features all the most commonly used cordless power tools you’ll need to get the majority of household projects completed.  Plus, these Makita tools are professional grade.  They can be used every day for years and won’t break down under hard use.  The Makita 7 Tool Combo Kit includes these tools:

What’s Included in the Makita Lithium Ion Combo Kit

• 18V 1/2 inch Hammer Drill Driver
• 18V Impact Driver
• 18V Reciprocating Saw
• 18V 6.25-inch Circular Saw
• 18V Flashlight
• 18V Jobsite Radio (w/ A/C Adapter)
• Two 18V Li-ion Batteries
• Battery Charger
• Carrying case with Wheels and Telescoping Handle

Here’s the link:

• Makita 7pc, 18V Lithium Ion Combo Kit

Amazon sells the Makita 7pc. set for a pretty decent price.  As a bonus, shipping is free and Amazon doesn’t charge sales tax in many places, making this an excellent deal over buying locally.  According to one reviewer, you simply couldn’t touch Amazon’s price locally, and that’s before accounting for the gas savings by not going to the store…

What do you think?  Do you own this Makita 7pc. Combo Kit?  If so, weigh in with your own review in the comments section.

GE Side-by-side Refrigerator Review (GSS25WG)

If you troll Craigslist, every now and then you find an amazing deal that you have to jump on quickly. That’s how Jocie and I found our refrigerator. She looked for quite some time before finding this awesome fridge.

A very similar fridge can be found on Amazon.

GE GSS25WG Refrigerator

General Summary

This is a side-by-side, refrigerator, freezer with a water and ice dispenser. The fridge has a black-on-black finish with matching handles.

• Dimensions: 70″ tall x 32″ deep x [15" freezer + 20" refrigerator =] 36″ wide
• 320 lbs.
• Total Capacity of 25.40 cu ft

Refrigerator Compartment

The right side door opens the refrigerator. The main compartment is larger than the freezer side by about 5 inches. It has a total fresh food capacity of 15.90 cu ft.

It features 4 total shelves, 3 of which are height adjustable. You simply slide them out and onto another track. These shelves are glass, spill-proof and have little tabs to prevent accidentally pulling them out.

There are 3 humidity controlled bins for snacks, fruits and vegetables, and a bottom bin. There is a slider bar on each that regulates the humidity.

There is one light at the top that illuminates the entire refrigerator. It’s covered so you don’t have to worry about hitting the bulb. The water filter is right next to it. It’s really easy to change the filter. Simply unscrew the old filter and replace with a new one. Press the filter button by the water dispenser to reset.

The refrigerator door also has some great storage. I’ll start at the top and work down.

The door has a covered bin that we use for butter and butter-esque items. It has a plastic cover that slides down over it.

Next, is the “In-the-Door Can Rack”. This rack has two rows of angled shelves fitted for 12 oz. cans.

The door also has 4 bins. 2 bins are adjustable and can hold gallon sized containers. It’s great to be able to fit a gallon of OJ next to a gallon of milk.

Freezer Compartment

The left side door opens the freezer. This side is smaller with a total freezer capacity of 9.49 cu ft.

The ice maker and storage are at the top. Below that are 4, wire frame, shelves. 3 shelves can be adjusted much like the fridge shelves. At the bottom is 1 sliding wire bin.

The freezer door features 5, shallow, fixed storage areas. They are good for holding small items like ice cream bars.

There is a light about mid-height that provides modest light for the freezer.

In-Door Controls and Dispenser

Inset into the freezer door is dispenser and a few controls.

• Digital temperature control – Lets you set the freezer and refrigerator temperatures. It displays the set temperatures and the actual temperature.
• Door alarm – Will start to beep if either door is left open too long.
• Filter change – Alerts you when it’s time to change the filter. Just press and hold to reset. This refrigerator uses GE Water Filtration Plus filters.
• Light – Optional light for the dispenser.
• Lock – You can lock the dispenser. This is amazingly helpful if you have small children who can’t quite manage the dispenser without help.
• Ice dispenser – Cubed or crushed ice dispenser. Sometimes you need to wait 10 seconds before it actually starts dispensing.
• Water dispenser – Can dispense chilled water.

Pros

There’s a lot of like about this fridge.

• It has great storage. When we upgraded, Jocie and I were amazed at how much more this fridge could hold.
• It’s Energy Star rated meaning it saves us money.
• Easy to clean. A lot of the shelves and bins are adjustable, meaning they can be removed. That makes cleaning them a lot easier.
• This fridge is quiet. I don’t think I’ve ever really noticed any noise from the fridge.
• The doors are easy to remove. This might sound strange but it was really helpful when we moved the fridge.

Cons

My only complaint is more about the side-by-side style than the fridge itself. If you purchase a side-by-side style fridge, make sure you have extra room on both sides to open the doors. If you place this fridge next to a wall, the door cannot completely open limiting your access the what’s inside.

What do you think? What features do you love / hate about your fridge?

How to Replace a Plug on an Extension Cord

Check out the latest addition to our shop: a fantastic 20 foot, 4-plug extension cord.  

Our good buddy Chuck rescued four of these heavy-duty extension cords just before they were chucked into a local dumpster. Apparently, during a remodel these cords were no longer useful because they weren’t long enough for the new configuration.  

We always find ourselves short on extension cords and needing to swap which tool is plugged in to their solo outlets.  So, Chuck, a big thanks to you for solving yet another problem for us.  

The only issue with our new extension cord is the plug on the end, which is a 20-amp 3 prong locking-style plug.  If you squint on this picture, you’ll notice that the brown receptacles on the other end each bear a sideways “T” for their left plug, indicating they can handle a 20-amp load.

We don’t have a locking-style 20-amp receptacle anywhere, so we’ve decided to replace the 20-amp plug with a traditional 3-prong 15-amp plug.  The only potential danger here is that we’re not going to change out the receptacles with 15-amp receptacles to save on cost.  If you were to plug in a 20-amp tool, you would blow the breaker on any 15 amp circuit you were connected to.  This isn’t really a danger for us since (a) we don’t own any 20-amp tools, (b) we’ll tell people when we loan them the cord, and (c) it doesn’t pose a significantly greater risk than the existing risk of plugging in two 10-amp tools and using them simultaneously.

This type of plug replacement is quick and easy and can be done with a simple screwdriver and a replacement plug that can be purchased from any of the big box improvement stores.  Here’s the steps we followed:

Steps to Replace a Plug on an Extension Cord

Step 1:  Remove the screws holding on the original plug end, and pull away the cover.

Step 2: Loosen the screws holding the wires and pull off the plug so that only the insulation and bare wires remain.

Step 3: Put the new plug housing on the existing wire and tighten the wires into the new terminals.  Note the convention:  Black wire -> Gold terminal;  White wire -> Silver Terminal;  Green Wire -> Green Terminal.  (great tip 1shotrising).

Step 4: Pull the plug housing toward the front of the plug and tighten everything in place.  You’re done!

One Additional Tip

Make sure you use a plug appropriate for the wire.  In this case, we’re moving to a lower-amp plug, which is safe.  You wouldn’t want to take an extension cord rated for 15-amps and put a 20-amp locking plug on it.  The cord might overheat during us, posing a fire hazard.

What do you think?  What’s the latest thing you’ve rescued from the dumpster?

Create Inexpensive Fabric Wall Hanging Decor

As you may have read in earlier posts, I am working to finish the nursery before Izzie arrives, due February 4th. I registered for canvas wall art to match the bed set, costing $29.99 for two, 12 x 12″ canvas wall hangings. Since I did not receive them at my shower, and felt that they were a luxury more than a necessity, I decided to make my own wall art to save a few dollars.

Cost of Making 2, 19 x 19″ Fabric Wall Hangings

• 19 x 19″ wood frames from Ikea = $4.99 each x 2 = $9.98
  *A similar wood frame available from Amazon for only $4.84
• Two yards of fabric to cover the frame = $9.98
• One yard of fabric for the design = $2.49
• HeatNBond Lite Iron-on Adhesive = $3.99

TOTAL: $26.44

Supplies Needed for DIY Wall Hanging

• Wood Frames
• Fabric to cover frame and decorate
• Heat N Bond Adhesive, enough to cover “design” fabric
• Fabric scissors
• Iron
• Staples and staple gun
• Level, tape measure
• Nails, hammer

How to Make a Fabric Wall Hanging

1. Buy the supplies. By far, finding the right fabric was the most time-consuming step for me. The fabric was also the most costly aspect of the project, but you can find clearance and sale fabrics to reduce the cost.

2. Assembling the wood frames is very easy. There are four pieces of wood that fit together to form a frame. Two screws go in each end. Go slow and be careful not to split the wood or strip the screw. Place frames to the side until step 10.

3. Iron the fabrics on low heat to get rid of any wrinkles. You can pre-wash the fabrics, but since the fabric will not be washed or worn once hung, it is not needed.

4. Cut out the base fabric to cover the frame. Make sure to leave extra on each side to stretch over frame and affix. I suggest actually placing the fabric over the frame to ensure there will be enough. (measure twice, cut once). Put this fabric to the side until step 8.

5. Place HeatNBond (HNB) onto the fabric you will be using for the design, glue side down (paper side up) to cover the fabric. Iron the paper side of HNB using low heat, ironing small sections for 2 – 3 seconds then moving to next section until complete. This will bond the glue to the fabric. Do not remove the paper after ironing!

6. Using a pencil (and stencil, if desired), draw your design onto the paper backing of HNB. I drew my design free-hand using the bed set design as inspiration. Also, make sure and refer back to the frame to ensure the design is a good size and proportion.

7. Use fabric scissors (smaller ones for more detailed designs) to cut out your design.

8. Remove HNB paper backing and place cut-outs (glue side down) on top of the base fabric that will be stretched over the frame. Be sure the design is centered within the visible space (not the borders that will be stapled behind the frame).

9. Once the design is in place, iron small sections on low heat for 8 – 10 seconds. Pick up the iron before moving on to next section. Sliding the iron can disrupt the design. Double check to make sure the fabrics have bonded together. If not, iron again for an additional 4 – 5 seconds until bonded.

10. Place base fabric face down on a sturdy, flat surface. Then place frame on top, centering the design (which is face down) as desired.

11. Starting on the bottom edge, stretch the fabric around the frame. Use a staple gun to secure the fabric to the frame. Place your first staple midway along the frame. Continue toward the corners, alternating left and right. This ensures equal pulling of the fabric, which is very important as you complete the other three sides.

12. Repeat step 11, continuing with top side, then left and right sides. It is important to stretch opposing sides of the fabric in order so that the fabric does not ripple in the frame.

13. Lightly hammer any staples that do not completely enter flush.

14. Trim excess fabric if desired.

15. Use level and tape measure to plan where you will hang your beautiful new wall decor.

16. Use hammer and nails to hang decor. Depending on the weight of the wood frame, you may want to use drywall screws or anchors. The Ikea frames are very light and therefore I used nails.

Overall, this was an enjoyable process for me. I spent several hours shopping for the fabric, but the actual making of the wall hangings only took about a hour and a half. I saved a little money, only spending $26.44 instead of $29.95, but got much larger wall hangings, 19 x 19″ rather than 12 x 12″. More importantly, it gave the nursery a more personal, creative touch that was well worth the time and money.

What do you think? Have you ever made your own wall hanging? Any tips or suggestions?

Porter Cable Hardwood Flooring Toe Nailer (Cleat Nailer)

If you’ve read here for any amount of time, you know we’re big fans of hardwood floors.  Hardwoods are one of the easiest ways to add beauty and lasting value to your home.  By doing the job yourself, you can see a fantastic return on investment of up to 50% or more over the total cost of materials and tools when you sell your home.  

This article provides a brief overview of hardwood flooring nailers in general.  At the bottom of this article, we provide additional information on one hardwood flooring nailer we often recommend, the Pneumatic Hardwood Flooring Nailer (official site) by Porter Cable.   

Hardwood Flooring Toe Nailers

The most important tool for installing hardwood floors is the hardwood flooring nailer (also called a toe nailer or cleat nailer). Hardwood flooring nailers fasten a hardwood board into the subfloor by driving a fastener (usually a cleat, or L-shaped nail) through the side of the board, just above the tongue, down into the subfloor.  As the next board is applied, the fastener from the prior board is covered by the new board’s groove, creating a tight bond that can’t be seen on the surface of the floor.

Pneumatic vs. Manual Hardwood Nailers

In order to drive a cleat down through wood into a subfloor with one shot you must apply a significant amount of force to the cleat head. Manual hardwood flooring nailers, like this one from Bostitch, use an internal spring mechanism to store mechanical energy.  When the spring is tightened enough, a switch is thrown and it drives the fastener into the board.  For each fastener, you’ll have to hit the nailer 3-4 times to store enough mechanical force.  We don’t recommend a manual nailer unless you are doing a very small area.  They require a great deal of additional work, and are more likely to produce a looser, less professional looking installation.

Pneumatic hardwood flooring nailers use compressed air to augment the installer’s swing.  The result is each fastener being delivered through the board and subfloor with only one, relatively light swing.  Pneumatic nailers produce a tight, professional installation and retain a great deal of resale value.

Recommended Porter Cable Pneumatic Hardwood Flooring Nailer

• Porter Cable Pneumatic Hardwood Flooring Nailer

For this job, we recommend Porter Cable’s Pneumatic Hardwood Flooring Nailer (pictured to the right with everything that comes with it).  This flooring nailer provides all the essentials for solid hardwood installation: consistent, reliable drive, large nail capacity, ability to fit into most tight spaces, incredibly easy to get up and running, and relatively lightweight.  This nailer is a bit spendy–unfortunately all high quality hardwood flooring nailers are.  But, when you consider the savings over paying for a professional installation, a pneumatic hardwood nailer makes sense. 

Also, you’ll have the nailer for future homes, projects, to share with friends, etc.  On the plus side, if you buy at the link below, Amazon doesn’t charge sales tax in most places, and shipping is free.  That could be a savings of 5-10% off buying locally.  Additional Details on the porter cable nailer are below:

Additional Details on the Porter Cable Nailer

Amazon.com link >> Porter Cable Pneumatic Hardwood Flooring Nailer

• Durable pneumatic floor nailer with 100 cleat magazine
• Compatible with L-shaped cleat nails from 1-1/2 to 2 inches
• 70-100 PSI operating pressure
• Measures 20-1/2 inches high and 17-1/2 inches long; It weighs 11-1/2 pounds
• Includes mallet, oil, wrenches, and 1/4-inch air fitting with dust cover

We Locked in at 5% on a Cash-out Refinance and Lost $55,000

Yep, that’s right.  We locked in a 5% mortgage rate on a 30 year cash-out refinance on our home.   Our goal: to get a lower rate on our home mortgage and pay off as much of our rental property mortgage as possible.

So how’d we lose $55,000?  We just got back our home appraisal for the new loan… it came in at $370,000, or $30,000 lower than the $400,000 purchase price from November, 2005.   We’ve also put about $25,000 into upgrades in this house, making our total loss that much larger.  Even though $55 large is a sizable sum, the loss only represents a depreciation of 13.75%.  Overall, that’s not too bad considering the doom and gloom in the housing market.  We’re thankful to have a roof over our heads.

Why We Locked in Now at 5.0%…

Our current home mortgage loan is at 5.75%.  Our townhome rental property is at 5.625%.  I had been tracking rates since mid-December, watching them fluctuate between 4.875% and 5.5%.  Right before Christmas, 2008, rates dipped to their lowest point in several years, then moved back to around 5.375% between the holidays, then back down into the high 4s / low 5s in early January, 2009.  We snagged 5% on January 9.   While I recognize that rates could go even lower in February or March, we are concerned about inflationary pressures and a 5.0% rate represents a significant savings over our current loan structures.  Best of all, it meets our payback period expectations.

We were able to get the good rate because we watch our credit report and FICO score like hawks… You never know when a refi. opportunity will present itself, so it’s important to stay on top of both and correct any issues that arise.

Payback Period & Closing Costs

Our home mortgage balance is $240,000.  At 5.75%, that makes our total yearly interest cost about $13,800.  (Note, that number is an estimate because throughout the year we’ll be chipping away at the principal.  But, this is good enough for our purposes).  At the new 5.0% rate, our yearly interest would total $12,000, or $1800 less.  Since mortgage interest is tax deductible and we’re in the 25% tax bracket, the real after tax savings is 75% of $1800, or $1350.  For all intents and purposes, $1350 is our interest savings on our primary home.

Our townhome has a mortgage loan balance of $62,500.  Unfortunately, due to our $55K loss on our home appraisal, we’ll only be able to borrow enough to pay down $50,000 of the townhome loan without exceeding an 80% loan-to-value ratio on our own home (this is important because real rates go up substantially over an 80% LTV).  $50,000 at 5.625% costs $2813/year in interest.  At 5%, the yearly interest cost drops to $2500, for a savings of $313.  Again, this interest is tax deductible and we’re in the 25% bracket, so our real savings is 75% of $313, or $235 in interest savings each year on the rental.

So, our total savings from both properties is $1350 + $235 = $1585 / year in interest savings, or roughly $132 / month.

Our total real closing costs are as follows:

• $470 Appraisal & Credit Check Fee
• $19 Flood Life of Loan Fee
• $70 Tax Service Fee
• $575 Underwriting Fee
• $1305 Title Exam, Title Insurance, Attorney’s Fees
• $0 Origination Fee (no origination, although the underwriting fee is comparable)
• $0 Points (no points)

(real closing costs that aren’t prepaid items for things like insurance and property taxes that will be refunded from our escrow on the current loan)

Total Real Closing Costs:  $2439.

Payback period is generally considered the number of months it takes to recoup the cost to refinance.  To caculate the payback period, divide the total real closing costs ($2439) by the monthly savings ($132) to get the result (18.5 months).

What’s a Good Mortgage Refinance Payback Period?

There’s no hard and fast rule here.  A good rule of thumb is to target a payback period no longer than 18-24 months.  You should never take a payback period that is longer than the amount of time you plan to stay in the house or keep the loan.  Kim and I think we’ll be here for many years to come and probably won’t have thee financial wherewithall to put major dents in the big mortgage, so an 18 month payback period is just peachy for us.

Our Payments Will Temporarily Be Much Larger

One of the downsides of not being able to completely pay off our rental property mortgage is that we’ll continue to make the same size payments on the townhome, although more of that payment will go to principal once we pay off $50,000 on that loan using proceeds from our cash-out refi.

At the same time, our home mortgage payments will be considerably higher because the loan will be drawn for $50,000 more.  We considered the impact of this, which is essentially the cost of principal+interest on $50,000.  That equates to a higher payment by about $270/month.

Note that even though we’re paying an additional $270/month to make this arrangement work in the short run, this has no effect on our real costs, only how much principal we’re paying against each loan.  We were already overpaying by about $300 each month on the principal balances, so we’re used to this cost in our budget.

The Psychological Benefits of Owning a Property Debt Free

One of our primary goals in this refinance is to get our rental property as close to “paid-off” as possible without jeopardizing our cash flow or financial health.  This refinance gets us down to $12,500 on our rental property loan and puts us that much closer to the debt-free life we want to live.

Granted, we’re mostly shifting debt from one property to another, but at least we’re getting a lower rate, a relatively short payback period, and the added satisfaction that we’re that much closer to only one monthly bill.

What do you think? Are you on the sidelines for a refinance, or have you already taken the plunge?

Photo by WoodleyWonderWorks (edited under CCL by me to read “5.0″)

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