The Meltdown

This is one of those vulnerable articles. It’s hoped that as I share about my/our weaknesses you too will be encouraged to own and accept your weaknesses, defeating any perfectionistic stride that tends to disrupt and even destroy relationships.Meltdown: think nuclear plant meltdown where the nuclear core is severely overheated and catastrophic damage results.We have a five-year-old, and very recently something happened that often happens at his age-and-stage. He had a meltdown. The process normally goes like this. Creative idea, build something, doesn’t work, frustration sets in, destroy the creation in anger. Not all the time, just occasionally. Dealing with pre-school children all the time, and having had another three children who are now adults, there’s nothing alarming in it. Besides, our five-year-old has witnessed us having meltdowns – and I can speak only for myself here.


There are all sorts of meltdowns, not just the angry ones, but also the teary ones, the anxious ones, the prideful ones, and the panicky ones.I want to share with you the kind of meltdown I’m capable of; this would happen occasionally in 2016 when I was thrust into an occupational world that I did not want any part of, but had to engage in just to support my family.I was very blessed to be offered work – two separate part-time positions – through friends, one of whom was my ex-wife, when pastoral ministry work went belly-up.Meltdowns occurred because of both jobs, but the case in point here centred around my job working with my ex-wife. These meltdowns never had anything to do with her – we, her and her husband and I, had a very good working relationship, always trying to outdo one another in what we gave.But it was the nature of the work that had me positioned like a fish out of water. I was packing chilled meals for home delivery, and so regularly my mind was doing backflips, that at times, my head was saying, ‘I cannot do this… it’s too hard… my brain is wired to work with people, one person at a time, not five or more tasks held in the mind at any one time, with noise, with pressure, with interruptions. (I need to say that since I burned out in 2005 my brain has some kind of permanent disability in managing many tasks simultaneously.) I was always fine when I got out on the road to do the deliveries, other than the times I had meltdowns. And this happened on a half dozen occasions.Here is the nature of that kind of meltdown. I would call my wife and say, panicked and in tears, ‘Darling, I cannot do this anymore… it’s too hard… my mind can’t keep up… I’m useless.’ After 10-minutes of hearing me out she would usually help me accept that I could get through the delivery run. I was usually fine after this. The inner meltdown in the presence of others manifested in an outward meltdown when it was safe with my wife.


There was nothing wrong with the delivery driving job, and in fact it taught me important skills, helped me master a new degree of patience, gave me empathy for those in that kind of work, and it showed me what I’m not good at. And it showed me how, all through my life, I’ve had the capacity for this kind of depressed meltdown that comes straight out of my wounded child state.We all have meltdowns, even those who seem to have perfect lives, and especially those who look like they’ve got their lives under control.I don’t know a single person who hasn’t had a meltdown. So, what do we do with this?We stop feeling ashamed of them whilst we do all we can to limit the kind of damage meltdown can bring.

How IoT & Smart Home Automation Will Change the Way We Live

The smart home

The concept behind the smart home is that an automation system will be able to operate systems around the house. The variety of potential options are considerable and includes environmental systems (lighting, heating, climate control etc.), entertainment systems, individual appliances, and home security systems. While the idea is that many operations can be automated – thus saving the home owner time and effort – these systems can also be user controlled. An example would be being able to set the heating to come on later if you were going to get home later or telling the entertainment system to find you some suitable music for working to.

There is significant potential for IoT smart home solutions to change the way that we live. The main ways include:

  • Saving time. Many of the IoT smart home products are intended to take out of our hands the various nugatory activities that we have to do on a daily basis, leaving more of our time for important or enjoyable activities.
  • Improving quality of life. By making the home an easier, healthier and less stressful place to be in, smart home automation using IoT can help improve the quality of life.
  • Saving money. Fully utilizing IoT can save money on house operating costs, for example by reducing unnecessary heating or lighting bills and integrating with smart grids to give the user greater visibility on the electricity they are using.

The health and security benefits

One of the main areas that has been explored for smart homes is that related to improving health. Several IoT smart home products have been developed that aim to monitor the status of the environment in the house. This includes, for example, monitoring the condition of the air across a number of categories – humidity, temperature, dust, CO2 etc. This information is then transmitted to a control interface where the user (the home owner or house occupier) can examine it and take appropriate action. Alternatively, this can be linked into other systems whereby automatic action can be taken to bring conditions back to the desired level, such as automatically turning air cooling or filtering systems on.

Other appliance-based solutions that are on the market include fridges that can monitor the status of food, checking for spoilage or similar, while automated cleaning can help reduce dust and dirt in the house.

Meanwhile, linking in security systems into IoT has made homes more secure. One of the most popular way this has been done is through using IoT enabled cameras in or around a house that enable a picture or video feed to be sent so that the home owner-occupier is able to check on the situation when they are away or when they are in another part of the property. Often these types of devices have multiple features integrated into them, such as automated motion sensors, sound detection, event-triggered video recording and so on.

Future developments

It’s generally accepted that there are three generations of home automation development so far:

  • First generation: wireless technology with proxy server, e.g. Zigbee automation;
  • Second generation: artificial intelligence controls electrical devices, e.g. Amazon Echo;
  • Third generation: robot buddy who interacts with humans, e.g. Robot Rovio, Roomba.

While the cutting edge of technology often gets the headlines, in many homes there is still substantial progress to be made with the first and second generation of systems. It is often entertainment-linked systems that generate the most media coverage, with the various personal home assistants – such as Amazon’s Echo, Google Home, Sonos One, Apple HomePod and others – having been particularly popular. With the growing and accelerating roll out and uptake by customers of IoT smart home tools and solutions, demand for additional services or tools is likely to increase. The sheer range of potential within the smart home will ensure that IoT within the house will continue to develop in the years ahead.

Home Inspections – A Question and Answer Guide

A home inspection is an evaluation of the visible and accessible systems and components of a home (plumbing, heating and cooling, electrical, structure, roof, etc.) and is intended to give the client (buyer, seller, or homeowner) a better understanding of the home’s general condition. Most often it is a buyer who requests an inspection of the home he or she is serious about purchasing. A home inspection delivers data so that decisions about the purchase can be confirmed or questioned, and can uncover serious and/or expensive to repair defects that the seller/owner may not be aware of. It is not an appraisal of the property’s value; nor does it address the cost of repairs. It does not guarantee that the home complies with local building codes or protect a client in the event an item inspected fails in the future. [Note: Warranties can be purchased to cover many items.] A home inspection should not be considered a “technically exhaustive” evaluation, but rather an evaluation of the property on the day it is inspected, taking into consideration normal wear and tear for the home’s age and location. A home inspection can also include, for extra fees, Radon gas testing, water testing, energy audits, pest inspections, pool inspections, and several other specific items that may be indigenous to the region of the country where the inspection takes place. Home inspections are also used (less often) by a seller before listing the property to see if there are any hidden problems that they are unaware of, and also by homeowners simply wishing to care for their homes, prevent surprises, and keep the home investment value as high as possible.

The important results to pay attention to in a home inspection are:

1. Major defects, such as large differential cracks in the foundation; structure out of level or plumb; decks not installed or supported properly, etc. These are items that are expensive to fix, which we classify as items requiring more than 2% of the purchase price to repair.

2. Things that could lead to major defects – a roof flashing leak that could get bigger, damaged downspouts that could cause backup and water intrusion, or a support beam that was not tied in to the structure properly.

3. Safety hazards, such as an exposed electrical wiring, lack of GFCI (Ground Fault Circuit Interrupters) in kitchens and bathrooms, lack of safety railing on decks more than 30 inches off the ground, etc.

Your inspector will advise you about what to do about these problems. He/she may recommend evaluation – and on serious issues most certainly will – by licensed or certified professionals who are specialists in the defect areas. For example, your inspector will recommend you call a licensed building engineer if they find sections of the home that are out of alignment, as this could indicate a serious structural deficiency.

Home Inspections are only done by a buyer after they sign a contract, right?

This is not true! As you will see when you read on, a home inspection can be used for interim inspections in new construction, as a maintenance tool by a current homeowner, a proactive technique by sellers to make their home more sellable, and by buyers wanting to determine the condition of the potential home.

Sellers, in particular, can benefit from getting a home inspection before listing the home. Here are just a few of the advantages for the seller:

· The seller knows the home! The home inspector will be able to get answers to his/her questions on the history of any problems they find.

· A home inspection will help the seller be more objective when it comes to setting a fair price on the home.

· The seller can take the report and make it into a marketing piece for the home.

· The seller will be alerted to any safety issues found in the home before they open it up for open house tours.

· The seller can make repairs leisurely instead being in a rush after the contract is signed.

Why should I get a home inspection?

Your new home has dozens of systems and over 10,000 parts – from heating and cooling to ventilation and appliances. When these systems and appliances work together, you experience comfort, energy savings, and durability. Weak links in the system, however, can produce assorted problems leading to a loss in value and shortened component life. Would you buy a used car without a qualified mechanic looking at it? Your home is far more complicated, and to have a thorough inspection that is documented in a report arms you with substantial information on which to make decisions.

Why can’t I do the inspection myself?

Most homebuyers lack the knowledge, skill, and objectivity needed to inspect a home themselves. By using the services of a professional home inspector, they gain a better understanding of the condition of the property; especially whether any items do not “function as intended” or “adversely affect the habitability of the dwelling” or “warrant further investigation” by a specialist. Remember that the home inspector is a generalist and is broadly trained in every home system.

Why can’t I ask a family member who is handy or who is a contractor to inspect my new home?

Although your nephew or aunt may be very skilled, he or she is not trained or experienced in professional home inspections and usually lacks the specialized test equipment and knowledge required for an inspection. Home inspection training and expertise represent a distinct, licensed profession that employs rigorous standards of practice. Most contractors and other trade professionals hire a professional home inspector to inspect their own homes when they themselves purchase a home!

What does a home inspection cost?

This is often the first question asked but the answer tells the least about the quality of the inspection. Fees are based according to size, age and various other aspects of the home. Inspection fees from a certified professional home inspector generally start under $300. An average price for a 2,000 square foot home nationally is about $350-$375. What you should pay attention to is not the fee, but the qualifications of your inspector. Are they nationally certified (passed the NHIE exam)? Are they state certified if required?

How long does the inspection take?

This depends upon the size and condition of the home. You can usually figure 1.2 hours for every 1,000 square feet. For example, a 2,500 square foot house would take about 3 hours. If the company also produces the report at your home, that will take an additional 30-50 minutes.

Do all homes require a home inspection?

Yes and No. Although not required by law in most states, we feel that any buyer not getting a home inspection is doing themselves a great disservice. They may find themselves with costly and unpleasant surprises after moving into the home and suffer financial headaches that could easily have been avoided.

Should I be at the inspection?

It’s a great idea for you be present during the inspection – whether you are buyer, seller, or homeowner. With you there, the inspector can show you any defects and explain their importance as well as point out maintenance features that will be helpful in the future. If you can’t be there, it is not a problem since the report you receive will be very detailed. If you are not present, then you should be sure to ask your inspector to explain anything that is not clear in the report. Also read the inspection agreement carefully so you understand what is covered and what is not covered in the inspection. If there is a problem with the inspection or the report, you should raise the issues quickly by calling the inspector, usually within 24 hours. If you want the inspector to return after the inspection to show you things, this can be arranged and is a good idea, however, you will be paying for the inspector’s time on a walkthrough since this was not included in the original service.

Should the seller attend the home inspection that has been ordered by the buyer?

The seller will be welcome at the inspection (it is still their home) although they should understand that the inspector is working for the buyer. The conversation that the inspector has with the buyer may be upsetting to the seller if the seller was unaware of the items being pointed out, or the seller may be overly emotional about any flaws. This is a reason why the seller might want to consider getting their own inspection before listing the home.

Can a house fail a home inspection?

No. A home inspection is an examination of the current condition of your prospective home. It is not an appraisal, which determines market value, or a municipal inspection, which verifies local code compliance. A home inspector, therefore, cannot not pass or fail a house. The inspector will objectively describe the home’s physical condition and indicate which items are in need of repair or replacement.

What is included in the inspection?

The following list is not exhaustive. Not all of these may be in the inspection you get, but the inspector will be following a standardized checklist for the home:
· Site drainage and grading
· Driveway
· Entry Steps, handrails
· Decks
· Masonry
· Landscape (as it relates to the home)
· Retaining walls
· Roofing, flashings, chimneys, and attic
· Eaves, soffits, and fascias
· Walls, doors, windows, patios, walkways
· Foundation, basement, and crawlspaces
· Garage, garage walls, floor, and door operation
· Kitchen appliances (dishwasher, range/oven/cooktop/hoods, microwave, disposal, trash compactor)
· Laundry appliances (washer and dryer)
· Ceilings, walls, floors
· Kitchen counters, floors, and cabinets
· Windows and window gaskets
· Interior doors and hardware
· Plumbing systems and fixtures
· Electrical system, panels, entrance conductors
· Electrical grounding, GFCI, outlets
· Smoke (fire) detectors
· Ventilation systems and Insulation
· Heating equipment and controls
· Ducts and distribution systems
· Fireplaces
· Air Conditioning and controls
· Heat Pumps and controls
· Safety items such as means of egress, TPRV valves, railings, etc.

Other items that are not a part of the standard inspection can be added for an additional fee:
· Radon Gas Test
· Water Quality Test
· Termite Inspection (usually performed by a separate company)
· Gas Line Leak Test (usually performed by the gas company)
· Sprinkler System Test
· Swimming Pool and Spa Inspection
· Mold Screening (sometimes performed by a separate company)
· Septic System Inspection (usually performed by a separate company)
· Alarm System (usually performed by a separate company)

We recommend getting a Radon Test if your prospective home falls into an area of the country with known Radon seepage, since Radon gas produces cancer second only to cigarette smoking and can be easily mitigated by installing a vent system. We also recommend a water test to make sure you do not have bacteria in the water supply. Water can also be tested for Radon.

What is not included in the inspection?

Most people assume that everything is inspected in depth on inspection day. This misunderstanding has caused many a homebuyer to be upset with their inspector. The inspections we do are not exhaustive and there is a good reason for this. If you hired someone with licenses for heating and cooling, electrical, plumbing, engineering, etc. to inspect your house, it would take about 14 hours and cost you about $2000! It is much more practical to hire a professional inspector who has generalist knowledge of home systems, knows what to look for, and can recommend further inspection by a specialist if needed. Your inspector is also following very specific guidelines as he/she inspects your home. These are either national guidelines (ASHI – American Society of Home Inspectors, InterNACHI – International Association of Certified Home Inspectors) or state guidelines. These guidelines are carefully written to protect both your home and the inspector. Here are some examples: We are directed to not turn systems on if they were off at the time of the inspection (safety reasons); we are not allowed to move furniture (might harm something); not allowed to turn on water if it is off (possible flooding), and not allowed to break through a sealed attic hatch (possible damage). The downside of this practice is that by not operating a control, by not seeing under the furniture, and not getting into the attic or crawlspace, we will might miss identifying a problem. However, put into perspective, the chances of missing something serious because of this is quite low, and the guideline as it relates to safety and not harming anything in the home is a good one. There are other items that 95% of inspectors consider outside a normal inspection, and these include inspecting most things that are not bolted down (installed in the home) such as electronics, low voltage lighting, space heaters, portable air conditioners, or specialized systems such as water purifiers, alarm systems, etc.

What if there are things you can’t inspect (like snow on the roof)?

It just so happens that some days the weather elements interfere with a full home inspection! There isn’t much we can do about this either. If there is snow on the roof we will tell you we were unable to inspect it. Of course we will be looking at the eves and the attic, and any other areas where we can get an idea of condition, but we will write in the report that we could not inspect the roof. It is impractical for us to return another day once the snow melts, because we have full schedules. However, you can usually pay an inspector a small fee to return and inspect the one or two items they were unable to inspect when they were there the first time. This is just the way things go. If you ask the inspector for a re-inspection, they will usually inspect the items then at no extra charge (beyond the re-inspection fee).

Will the inspector walk on the roof?

The inspector will walk on the roof if it is safe, accessible, and strong enough so that there is no damage done to it by walking on it. Some roofs – such as slate and tile, should not be walked on. Sometimes because of poor weather conditions, extremely steep roofs, or very high roofs, the inspector will not be able to walk the roof. The inspector will try to get up to the edge though, and will also use binoculars where accessibility is a problem. They will also examine the roof from the upper windows if that is possible. There is a lot the inspector can determine from a visual examination from a ladder and from the ground, and they will be able to tell a lot more from inside the attic about the condition of the roof as well.

Should I have my house tested for Radon? What exactly is Radon?

In many areas of the country, the answer is a definite yes. You can ask your real estate agent about this or go on to the internet for a radon map of the country. Radon is a colorless, odorless, tasteless radioactive gas that’s formed during the natural breakdown of uranium in soil, rock, and water. Radon exits the ground and can seep into your home through cracks and holes in the foundation. Radon gas can also contaminate well water.

Health officials have determined that radon gas is a serious carcinogen that can cause lung cancer, second only to cigarette smoking. The only way to find out if your house contains radon gas is to perform a radon measurement test, which your home inspector can do. Make sure the person conducting your test has been trained to The National Environmental Health Association (NEHA) or The National Radon Safety Board (NRSB) standards.

What about a newly constructed home? Does it need a home inspection?

Yes! In fact, we find far more problems, some quite serious, in newly constructed homes than in homes that have been lived in for years. This is not due to your builder’s negligence – he/she has done the best job they could with subcontractors and planning – it’s just that there are so many systems in a home, that it is close to impossible to inspect everything, and correct it before the Certificate of Occupancy is issued. Then, for some reason, the subcontractors no longer want to work on the home, and final jobs and details are missed. We recommend getting several professional home inspections near the completion stages of the home to discover everything that should be corrected. If the house is still new but sitting for a while before sale, it’s even more important to get a home inspection. We have seen water lines not hooked up, plumbing lines not hooked up, sewer lines not hooked up, vents not hooked up, and a variety of other serious but easily correctable problems!

I am having a home built. The builder assures me he will inspect everything. Should I have an independent inspector make periodic inspections?

Absolutely yes! No matter how good your builder is, he/she WILL miss things. They are so concerned with the house, they get so close to their work, as do the subcontractors, that important items can, and will be, overlooked. Have a professional inspector make at least 4-6 interim inspections. They will be worth their weight in gold.

What is the Pre-Inspection Agreement?

Most service professionals have a service agreement, and home inspection is no different. In fact, there is enough confusion about what a home inspection should deliver that the agreement is even more important. Some homeowners who get a home inspection expect everything in the home to be perfect after the repairs. This is not the case! Imagine getting a call from a homeowner a year later who says the toilet is not flushing – remember that the inspection is a moment in time snapshot. In the inspection agreement the inspector is clear about what the inspection delivers and the things that are not covered, as well as what you should do if you are not pleased with the services. We really think that by reviewing this before-hand you will understand much more about the inspection and be happier with the results. A home inspection does not guard against future problems, nor does it guarantee that all problems will be found.

What kind of report will I get following the inspection?

There are as many versions of a “report” as there are inspection companies. Guidelines dictate that the inspector deliver a written report to the client. This can range from a handwritten checklist that has multiple press copies without pictures and 4 pages long to a computer generated professionally produced report with digital pictures that is 35 pages long and can be converted to Adobe PDF for storage and emailing. Be sure to check with your inspector about the report he or she uses. We recommend the computer generated report, since the checklist is more detailed and easier for the homeowner/buyer/seller to detail out the issues with photographs. In this modern age, we feel the reports must be web accessible and e-mailable to match the technologies most of us are using.

There are some great things you can use the report for in addition to the wealth of information it simply gives you on your new home:

· Use the report as a checklist and guide for the contractor to make repairs and improvements or get estimates and quotes from more than one contractor.

· Use the report as a budgeting tool using the inspector’s recommendations and the remaining expected life of components to keep the property in top shape.

· If you are a seller, use the report to make repairs and improvements, raising the value of the home and impressing the buyers. Then have a re-inspection and use this second report as a marketing tool for prospective buyers.

· Use the report as a “punch list” on a re-inspection and as a baseline for ongoing maintenance.

Will the report be emailable or available as an Adobe PDF file?

Yes. As discussed in the last question, you will probably want your inspector to be using the latest reporting technology.

What if I think the inspector missed something?

Inspectors are human, and yes, they do miss items. However, they routinely use advanced tools and techniques to reduce the possibility that they will miss something. This includes very detailed checklists, reference manuals, computer based lists, and a methodical always-done-the-same-way of physically moving around your home. That is one of the reasons that an inspector can miss an item when they get interrupted. The inspector will have a set way of resuming the inspection if this happens. If, in the end, something IS missed, call the inspector and discuss it. It may warrant the inspector returning to view something that you found. Remember, the inspector is doing the very best job they know how to do, and probably did not miss the item because they were lax in their technique or did not care.

What if the inspector tells me I should have a professional engineer or a licensed plumber or other professional contractor in to look at something they found? Isn’t this “passing the buck”?

You may be disappointed that further investigation is required, but, believe us, your inspector is doing exactly what they should be doing. The purpose of the inspection is to discover defects that affect your safety and the functioning of the home; the inspector is a generalist, not a specialist. Our code of ethics as well as national and state guidelines dictate that only contractors that are licensed in their specialty field should work on these systems and areas. When they tell you that a specialist is needed, there may be a bigger, more critical issue that you need to know about. If you move into the home without getting these areas checked by a qualified specialist, you could be in for some nasty and expensive surprises. The inspector does not want to cause you any more expense or worry either, so when they do recommend further evaluation they are being serious about protecting you and your investment.

Will the inspector provide a warranty on the inspected items?

Most inspectors do not give the homeowner a warranty on inspected items. Remember, a home inspection is a visual examination on a certain day, and the inspector cannot predict what issues could arise over time after the inspection. However, some inspectors are now including a warranty from the largest home warranty company in America – American Home Warranty Corporation, as well as others, on the inspected items for 60 or 90 days. This is a very good deal, and the agreement can be extended after the initial period for a relatively small amount of money.

Do most inspection companies offer money back guarantees?

Most inspection companies do not offer a satisfaction guarantee nor do they mention it in their advertising. It’s always a good thing if you can get extra services for no additional cost from your inspection company, and of course a satisfaction guarantee is an indication of superior customer service. You usually have to call your inspection company right after the inspection and viewing of the report to tell them you are not satisfied. If you are not happy with the services, you should talk to your inspector first and let him/her correct the issue(s) you are unhappy with first, as the inspector is trying to make an honest living just like the rest of us, and is not failing you on purpose.

What if my report comes back with nothing really defective in the home? Should I ask for my money back?

No, don’t ask for your money back – you just received great news! Now you can complete your home purchase with peace of mind about the condition of the property and all its equipment and systems. You will have valuable information about your new home from the inspector’s report, and will want to keep that information for future reference. Most importantly, you can feel assured that you are making a well-informed purchase decision.

What if the inspection reveals serious defects?

If the inspection reveals serious defects in the home (we define a serious defect as something that will cost more than 2% of the purchase price to fix) then pat yourself on the back for getting an inspection. You just saved yourself a ton of money. Of course it is disappointing, even heart wrenching, to find out that your well researched house is now a problem house, but you now know the facts and can either negotiate with the seller, or move on. You may want the home so much that it will be worth it to negotiate the price and then perform the repairs. Imagine, though, if you had not gotten the inspection – you would have had some very unpleasant surprises.

Can I ask my home inspector to perform the repairs?

You can, but if your inspector is ethical, he/she will refuse, and correctly so; it is a conflict of interest for the person who inspected your home to also repair it! Inspectors are specifically barred from this practice by licensing authorities, and it’s a good practice – an inspector must remain completely impartial when he or she inspects your home. This is one reason you should have a professional home inspector inspect your home and not a contractor – the contractor will want the repair work and you are likely to not have an objective inspection from this person even though they mean well and are technically competent.

Does the Seller have to make the repairs?

The inspection report results do not place an obligation on the seller to repair everything mentioned in the report. Once the home condition is known, the buyer and the seller should sit down and discuss what is in the report. The report will be clear about what is a repair and what is a discretionary improvement. This area should be clearly negotiated between the parties. It’s important to know that the inspector must stay out of this discussion because it is outside of their scope of work.

After the home inspection and consulting with the seller on the repairs, can I re-employ the inspector to come re-inspect the home to make sure everything got fixed?

You certainly can, and it’s a really good idea. For a small fee the inspector will return to determine if the repairs were completed, and if they were completed correctly.

What if I find problems after I move into my new home?

A home inspection is not a guarantee that problems won’t develop after you move in. However, if you believe that a problem was visible at the time of the inspection and should have been mentioned in the report, your first step should be to call the inspector. He or she will be fine with this, and does want you to call if you think there is a problem. If the issue is not resolved with a phone call, they will come to your home to look at it. They will want you to be satisfied and will do everything they can to do this. One way to protect yourself between the inspection and the move-in is to conduct a final walkthrough on closing day and use both the inspection report AND a Walkthrough Checklist to make sure everything is as it should be.

Copyright 2010 by Lisa P. Turner

5 Ways Refinancing Your Home Loan Can Help You

We take a look at 5 ways refinancing your home loan could help you:

1. Your lender’s rate is no longer competitive

We’ll start with the popular one first. One of the main reasons people choose to refinance their loan is to get a lower interest rate, and put more money back into their pockets instead of paying the banks.

When done correctly, refinancing your home loan could save you thousands over the life of your loan, and free up cash now.

2. You could switch between variable & fixed rates

Another popular reason to refinance your home loan is to switch between a variable rate and a fixed rate. With a fixed rate, some want peace of mind. That is, knowing exactly how much their monthly repayments will be without the possibility of it changing for a set period is worth a slight increase in rate.

Conversely, you may decide you’d like to take advantage of a lower variable rate as you can accept the risk that rates may rise in future.

3. You could be eligible for a home loan with better features

There are some great home loan features around at the moment, and refinancing could offer you the opportunity to take advantage or more flexible features. Some money saving features to look for are:

Flexible repayments: You might want to switch to a home loan that allows you to make lump repayments without fees or open up an offset account to reduce your interest.

Redraw: Allows you to withdraw extra payments if you need cash. Look for a loan offering free redraws.

There are also some pretty cool boutique features, like getting a repayment holiday (a break from repayments), or the loan portability which allows you to take your home loan with you when you move without much hassle.

4. You could consolidate your debt

Many of us have multiple debts like car or credit card along with our home loan. Often our car and credit card loans have pretty high interest rates, meaning more out of your pocket.

Refinancing could give you the opportunity to merge your debts and potentially reduce the overall interest you’re paying, streamlining all of higher interest debts into one lower interest debt and reducing your monthly repayments.

The interest rate on a home loan is usually significantly lower than the other types of credit. Helping you to save on interest charges and pay debt off sooner.

5. You could release some equity in your current property

You may be thinking about joining the thousands of Australians that have invested in property, renovating your home or traipsing around Europe on that trip of a lifetime. With your current home usually being your most valuable asset, it only makes sense to release as much of the value in your home as possible.

Home equity is the difference between your home’s current value and the balance of your mortgage. For example, if your home is worth $600,000 and you have a mortgage of $200,000 remaining, your home equity is $400,000. That’s money that can be used to build wealth.

Not so long ago, the only way home owners could access their home equity was to sell up and upgrade to another property. These days, home loans are flexible and it’s possible to get access to the equity in your home without having to sell up. Reviewing your home loan can help you see exactly how much equity is available to you, and refinancing can help you access the equity to use for other things.

What should I consider before refinancing?

Cost of refinancing

While refinancing has some amazing benefits, there are costs associated with refinancing your home loan – costs that may outweigh the potential benefits. Following are two of the main costs associated with refinancing:

Exit Fees

Exit fees may apply when you pay out a loan early, usually in the first three to five years of your term. It could be a percentage of the remaining loan balance or it may be a set charge. Check your loan contract for more details. Although exit fees have been banned on new loans taken out after 1 July 2011, they could still apply to loans taken out before this date.

Borrowing costs

When you refinance, your new lender may charge a range of upfront fees. However not all lenders charge these fees and some may be negotiable.

Case Study

Let’s have a look at a refinancing example using some numbers to better understand the benefits and costs.

The situation:

Sue has a $300,000 loan repayable over 25 years. Her current rate is 6.4% and her monthly repayments are $2,006.

If Sue can refinance to a loan with a rate of 5.9% a rate reduction of 0.50%, she can lower her repayments to $1,914, a saving of $92 each month.

The solution:

Looking at the cost side of things, we’ll assume Sue will pay $1,000 to refinance her loan. In this case it would take about 11 months ($1,000 divided by $92) for Sue to claw back the costs through the savings she makes.

The outcome:

That’s not a bad time frame. If it was to take several years to recover her costs, refinancing may not be worthwhile.

Should you refinance?

We’ve gone through the potential benefits of refinancing, the costs associated and a short example. That’s a lot to take in. When it comes time to make a decision about refinancing your home loan, the best suggestion is to sit down with a mortgage broker you trust to help you go through your options.