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Posts from the ‘Real Estate’ Category

Personal Finance: Refinancing a Residential Mortgage for 2011

One of my “To Do” list items for the end of 2010 was to investigate refinancing the mortgage on our house in Sunnyvale, CA.  As a sign of the decade, this actually is the third time we’ve looked to refinance our mortgage in about seven and a half years.  I was actually a bit surprised at the complexities involved, so I thought I’d share the results here on the blog.

Background

Our current mortgage is a “5/5 ARM” offered by Pentagon Federal Credit Union, a credit union that specializes in military families.  We completed that refinancing at the end of 2008, and I actually wrote a blog post about that experience if your curious about Pentagon Federal.  (Quick Summary: They are awesome, I highly recommend them for low rates on home & auto loans).

The “5/5 ARM” is an unusual program.  Like a normal 5/1 mortgage, it’s a 30-year loan with a fixed rate for the first 5 years.  Except, instead of repricing every year after that, instead, it only reprices every five years.  It reprices based on a rate tied to US Treasuries, and can rise no more than 2% at a time.

This means that if you get a mortgage at 5%, it will be 5% for years 1-5, and then can rise as high as 7% for years 6-10.  There is a cap of 5% on the total life of the mortgage, so if Obama turns out to be Jimmy Carter II and rates have to go to 20% in 2019, you’re protected.  All of this is fairly standard for high quality mortgages, except for the 5 year repricing schedule.

What makes this appealing is that the 5/5 rate tends to be the same as the 5/1 rate, so you are getting some extra stability effectively for free.  The only gotcha is that these are all FHA qualified loans, so they have to conform to their standards.  ($417K for normal mortgages, $729K in “high income” areas like Silicon Valley, 80% Loan-to-Value, etc).

The rate we got at the end of 2008 was 4.625%.  At the time, I thought that was the best rate we’d seen in 40 years, and it was good to grab.  Turns out, I was wrong about how low rates could go.

Why Did I Want to Refinance

Looking up rates on the internet can be very confusing.  The reason is that few sites offer a comprehensive average of rates, and more importantly, the ones that do tend to ignore complexities around terms like the number of points paid.  When you hear rates on the radio for a 3.875% 30-year fixed mortgage, you are hearing the interest rate that assumes a massive amount of up-front payment and some stricter-than-average terms.

I was exclusively looking for the “perfect repricing”:

  • No money down
  • Monthly payments drop
  • Interest rate drops
  • Total amount paid over life of the loan drops

You might be wondering why I would think this was possible.  Well, in 2004 and 2008, it was.  It turns out in 2010, there is no real free lunch.

Based on advertisements, and some spreadsheet calculations, it seemed like there was a real opportunity to achieve the above with current rates.  I was seeing advertisements for rates as low as 3.5% on 5/1 ARMs, which would not only drop our payment by hundreds of dollars per month, but literally would save us tens of thousands over the life of the loan.

Where Rates Are Now

This was my first surprise – it’s not that easy to get a great rate, even with great credit, with zero points.  It’s not that there aren’t great rates out there – there are, but the plain vanilla, no catches, no points and rock-bottom rate days seem to be behind us.

To evaluate options, I checked the following sources:

  • Internet searches at sites like bankrate.com
  • Quotes from big banks, like Wells Fargo and Bank of America
  • Quotes from credit unions, like Stanford Federal Credit Union and Pentagon Federal
  • Brokers like Quicken Loans

First, the Big Disappointment with Pentagon Federal

Pentagon Federal has a current price (as of 1/2/2011) on a 5/5 ARM of 3.5%.  Yes.  Awesome.  I was ready to just refinance and be done.

I should have known that there was a flaw with PenFed.  Sure, they offer great rates.  Sure, they offer clean terms.  But it turns out that there is one ugly fee that they do charge, and I was about to get caught in it.

On top of regular closing costs, title search, etc, Pentagon Federal charges a 1% origination fee when you refinance an existing Pentagon Federal mortgage.  So, for example, on a $500K mortgage, this would be an extra $5K.  Up front.  Not interest.  Not deductible.

I argued with them about it.  I escalated.  I tried sweet talk.  Nothing worked.  They admit that this is an incentive for me to leave Pentagon Federal.  They admit that it is bad for the customer.  They are not interested in changing it.

Strike 1. No worries, it’s a big internet out there, isn’t it?

Don’t Bother With These

Just don’t even bother wasting time with Bank of America, Wells Fargo, or no-name shops on the Internet offering mortgages.  You put in a bunch of time and effort, fill out forms, submit applications, etc.  The end result is underwhelming.

Countrywide, I actually miss you.

It’s pretty clear that the big banks really aren’t feeling the need to push to get people with great credit scores to refinance with them.  Whatever was driving the banks to want to “take your business” from other banks is clearly pretty weak.  I was actually a bit surprised, since I tend to think of a mortgage as a way for a bank to take a “loss leader” approach to getting a valued customer.

The Easy Orange Mortgage and Bi-Weekly Payments

ING Direct is the oddball in the group.  Since they originate their own loans and do not syndicate them, they set their own terms.  They have rates based on a $500K size and $750K size, and a variety of terms.  Definitely worth checking out, because some of their mortgages are best in class.

For example, their under $500K 5/1 is at 2.99%, with reasonable closing costs.

I spent quite a bit of time in Excel working on the options offered by ING Direct and their Easy Orange mortgages.  They offer both regular and “bi-weekly” versions.  In fact, most banks now seem to offer bi-weekly options for their loans.

If you are unfamiliar with the concept, a bi-weekly mortgage involves making a payment of 1/2 of the normal monthly payment every 2 weeks.  Since you pay more frequently (effectively you pay an extra month’s payment every year), you end up paying off your mortgage faster and with less interest.

Unfortunately, this largely seems to be a gimmick.  Technically, you can send money in early to almost any legitimate bank, and they’ll apply the early payment to principal without penalty.  Mathematically, it’s very hard to see the benefit of these type of programs once you price in the amount of cash you’d accumulate outside of your mortgage if you just put that extra payment in the bank.  Even with 0% interest, in the first ten years, there is almost no measurable benefit to bi-weekly payments at current rates.  (By the way, here is a cool website that let’s you calculate bi-weekly options without building a spreadsheet.)

As a last note, I did discover that ING has a lot of terms that are left open that could turn ugly.  For example, their Easy Orange mortgages are designed as balloon mortgages.  So in 10 years, the rate doesn’t adjust – you literally owe the entire remainder of the loan.  This is fine, if you are allowed to refinance at the time.  But ING does not guarantee you will be able to.   So, this is a great loan if you plan on selling your house before the term is up, and a bad loan if you don’t want to be caught in a situation where you have to.

Close, But No Cigar

I was very impressed with the level of effort that Quicken Loans put into helping me, even though in the end, I didn’t use them.

At first, I was somewhere between annoyed and amused when I got a phone call the next day after submitting my application.  On Day 2 when they had called 3 times, I was ready to be annoyed.  I decided to call back and let them know I wasn’t interested, but when I got them on the phone, they impressed me with the breadth of their knowledge about different options, and I was convinced they could help.

So I told them – find me a 3.5% 5/1 mortgage out there with zero points, and I’ll go with them.  I pointed them to PenFed, but didn’t tell them about the 1% fee I would face.  They went to work.

The next day, they found a few options, and I got a call from the Director of their team.  She wanted to clarify a few things in terms of income and home value, to evaluate all options.  In any case, she seemed sincerely interested in the business, which is more than I can say about any of the traditional banks.

They got close.  They found a 5/1 mortgage with $6600 up front costs and a 3.875% rate.  They also found a 5/1 at 3.5% rate, but that required $11.3K up front.  While both of these mathematically were good options compared to the 5/5 I have, I was disappointed at the size of the up front cost.

Strike 2. What’s left?

Final Decision

Fortunately, while searching the internet, I came across some great discussion boards about Pentagon Federal.  Thinking that in a world of cheapskates, I could not be the only one complaining about refinancing with Pentagon Federal.  And I was right, in a way.

In the end, I discovered 2 things:

  • There really aren’t many other mortgage options that are better than Pentagon Federal for what I was looking for.
  • Pentagon Federal has a repricing program that is documented on their website, but that they never actually promote.

Here is the program.  If your mortgage conforms to these requirements:

  • Conventional Adjustable Rate Mortgage (ARM loans) are eligible. All other types
    of loans are not eligible.
  • Loan must be 100% owned by PenFed. The loan, or any portion of the loan, cannot have been sold, or committed to be sold to Fannie Mae, or any other public or private investor.
  • No late payments showing on first mortgage payment history over last 12 months.

If you meet the terms, they will reset your mortgage to the current rate for a fee of 1%.

Now, you may be wondering why I’d be excited about this.  After all, wasn’t the 1% fee the problem with refinancing with PenFed in the first place?

The answer is simple – a 1% fee on top of normal closing costs of $3000+ is prohibitive.  A 1% fee in lieu of closing costs is pretty attractive.  No points.  No title search or insurance.  No paperwork fees.  Nothing.  Just 1%, flat.

They reset your mortgage at the current rate, give you another five years before the next repricing, and they leave your mortgage term as is.  So, since our mortgage currently completes in 2038, it would keep that completion date.

The result: lower monthly payment, lower total costs of the mortgage, dropped interest rate.

Swing and a Hit. Not perfect, but definitely the best option.  So we went for it.  Only took a phone call – no application, no paperwork.

Final Thoughts

The average duration of a home mortgage in the US is between 7-8 years, which tends to mean that mortgage rates correlate strongly with the 7-Year Treasury rates.  In the past six weeks, the rates on US Treasuries have moved up quite a bit, likely in anticipation of an economic recovery, inflation, or both.

In any case, the decision to refinance is based on a huge number of factors, not the least of which is how long you plan to stay in your current home, and how secure you feel about your current job / income stream.

But if you’ve been thinking about refinancing, and you’ve just procrastinated, I’m hoping the info above will be useful.

The Tower of Babel 2008: Burj Dubai

Remakes are all the rage in Hollywood, and what better original material is there than the Old Testament?

If you are not familiar with the Burj Dubai, it’s the tallest building in the world, and the construction isn’t even finished yet.  It currently stands about 2,275 feet tall, but they are keeping the final height a secret.  Some rumors state that the final height will actually be over 940m (about 3,055 feet, for US types).

Here is what it is supposed to look like when it is done:

Last week, I caught this article in Gizmodo, and it had this great picture in it:

It seems that, like the story of the Tower of Babel, recently the building reached heights that interfered with the functioning of the construction site walkie talkies.  Literally, they built a building so high that they could no longer communicate.

When the unbelievable Burj Dubai started to get really high, the construction workers discovered one problem that seems obvious now: their walkie-talkies stopped working as they climbed the structure. The reason was simple: distance. At the beginning of the construction they used walkie-talkies—which are light, durable, and have a long battery life—across the site.

Not to get too biblical, but a quick synopsis of the original story:

According to the narrative in Genesis Chapter 11 of the Bible, the Tower of Babel was a tower built by a united humanity in order to reach the heavens. To prevent the project from succeeding, God confused their languages so that each spoke a different language. They could no longer communicate with one another and the work could not proceed. After that time, people moved away to different parts of Earth. The story is used to explain the existence of many different languages and races.

Interesting to consider… if just for a moment. Fortunately, there is a happy ending for the Burj Dubai:

Fortunately for them, they turned to mesh networks, which are similar to the ones used in mobiles, but local. For that they used a company called Firetide, using several Wi-Fi-enabled VoIP phones over a HotPort wireless mesh, which also serves as the transport for the security video in the site.

Gotta love technology.

By the way, the Wikipedia page on the world’s tallest buildings is really, really fun to explore.

Do You Know Where to Buy/Sell S&P/Case-Shiller Housing Index Derivatives?

This shouldn’t be a hard question to answer, but I’m having trouble with it. I’m looking for an online brokerage where I can buy and sell futures and options contracts based on the the S&P/Case-Shiller Housing Index. The S&P/Case-Shiller Housing Indexes are one of the newest innovations in tracking the value of home prices across the US.

A few years ago, Robert Shiller wrote a book called “The New Financial Order,” (although I didn’t get around to reading it until last June, during the evenings between the eBay Live 2006 event in Las Vegas). Robert Shiller had written a book in 2000 called “Irrational Exuberance“, and as you can guess by the title, it had quite a bit to do with market bubbles and what was happening with Internet stocks in 2000 when it was .

In his new book, Shiller argues that risk in the 21st century will be manageable by leveraging the innovations from the 20th century around risk management towards the truly large risks that individuals bear. For example, every individual bears a disproportionate amount of “local housing market risk”, because most of their assets are tied up in a house whose value is tied to the area of the country where they happen to live. Shiller also provides examples like “livelihood risk”, where people currently bear a huge risk that the profession that they are trained in will be unmarketable or less valuable in future years.

Shiller proposes several steps towards solving these problems for individuals, beginning with the definition of well known, well defined indexes to measure them. Then, with derivatives like futures and options, these risks can be hedged by individuals as needed.

For example, a young software engineer could buy a put-option on the 20-year future income of a US-based software engineer. If it turns out that software engineers in the US have lower income in 20-years, the put should help hedge some of that risk, and potentially even fund re-training if needed.

Well, quickly after the book was released, Shiller followed through with indeces defining the local housing prices in 12 major US markets, and one aggregate index across them.

They are called the S&P/Case-Shilling Housing Indexes, and they are defined and marketed by Macromarkets, an interesting company to say the least:

MacroMarkets LLC is a growth company on a mission to add liquidity to valuable economic interests and important asset classes throughout the world. Our principal focus: to cultivate new markets which facilitate investment and risk management via innovative financial instruments.

The firm is led by a seasoned management team with over 100 years of collective Wall Street experience with structured products, exchange-traded funds, housing markets, mortgage- and asset-backed securities.

MacroMarkets holds multiple patents for MACROS®, a novel securities structure that can be applied to any asset class that can be reliably indexed. It also possesses exclusive licensing rights to The Case-Shiller Indexes® for the purposes of developing, structuring and trading financial instruments.

In May 2006, in partnership with MacroMarkets, the Chicago Mercantile Exchange (CME) successfully launched Housing Futures and Options for U.S. residential real estate. This landmark development created the first exchange-traded financial products for directly investing in and hedging U.S. housing. Various over-the-counter (OTC) U.S. housing-linked derivative financial products will also be originated and traded this year. Like the CME Housing Futures and Options, these OTC products will be linked to and settled upon the S&P/Case-Shiller® Home Price Indices.

So, I was interested in checking out the prices on potentially hedging local home prices in the San Francisco Bay Area for the next few years. I was just curious whether or not it would make sense to do on an individual basis. After all, Herb Greenberg says California real estate prices may dictate the movement of the national economy this time…

Problem is, I can’t find a quote for these futures or options, and I can’t find a brokerage where I could potentially trade them. This article suggests you can, and I found ticker symbols for both futures and options on the website. But I can’t seem to find a quote service or brokerage that understands them.

So, I’m asking my readers… anyone know the answer here?

The New Downtown Sunnyvale Is Under Construction

There has been heavy construction at the site of the old “Sunnyvale Six” mall all summer. Demolition, really, as they raze everything and put the new downtown in. There have been delays for the past few years, due to some contractual difficulties with previous contractors, but things seem to be really moving now.  Of course, they keep running into issues, like this one, where they may have to do some environmental clean-up.

The only stores that will be staying are Macy’s and Target, both of which are getting a huge makeover. Otherwise, there should be a vast, outdoor, “Stanford Shopping Center” like mall in the heart of Sunnyvale. Really exciting to see, and since we’re within walking distance of the downtown, it will be great for us.

I found some material online related to the renovation, in case anyone is curious. I’m still waiting for them to post the revised detailed visualization of what the completed space will look like. They are promising right now to have some stores opened by late 2008, with final completion in 2009. This is part of the revitalization of all of downtown Sunnyvale. It should be gorgeous when it’s done.

According to this write-up in the San Jose Mercury News:

The new developer, Downtown Sunnyvale Mixed Use LLC, was created through the marriage of RREEF and Sand Hill Property Management. Its plans also include a multiplex, about 299 housing units, 991,000 square feet of retail space, 315,000 square feet of office space and a hotel of up to 200 rooms, planners said.

Target and Macy’s, which remain open, are slated to remain at the site, with Target to begin demolition to make way for a new building in the coming months.

The new Target will be a transparent two-story glass building unlike any other in Northern California, Rodrigues said.

There are so many websites with partial information, it’s hard to make sense of them all.

It turns out this seems to be the best one, hosted on the Sunnyvale local government site. Here is the Sunnyvale Town Center website. Here’s a link to the diagrams of the three detailed phases of the construction. Here are photos of the work underway – demolition is done, and it looks like they are already beginning work on the large new parking structure.

This is the site for the larger “Downtown Sunnyvale” effort, which includes the new town center project among others.

Tough Choice: Picking an International REIT ETF

Tough choices tonight on the personal finance front.

I recently rolled over my 401k from eBay into an IRA. As a result, I now have the ability to better balance out my retirement portfolio across different asset classes.

In a previous post here, I discussed the launch of the first international REIT index ETF, the SPDR DJ Wilshire International Real Estate ETF (RWX).

Of course, in the months since then, a new fund has launched, provided by WisdomTree, the WisdomTree International Real Estate Fund (DRW).

The question is, which to choose?

Let’s assume first, for the purpose of this article, that we’re not going to debate whether or not now is the time to invest in real estate, international real estate, or whether ETFs are the right vehicle. Another time, another post. For tonight, the question is between these two funds.

Normally, picking ETF funds that track the same index is trivial – go with the one with lower expenses, unless the fund has a history of failing to track the index accurately.

However, when ETFs follow different indeces to track the same asset class, it gets a bit more complicated. In this case, there is a fairly radical difference in the two indeces that form the basis of these two funds.

I found this excellent table outlining the historical performance of the two on this Seeking Alpha post:

The first place anyone starts when comparing ETFs is performance, and here, it’s a mixed bag. For the 10 years ending March 31, 2007, the performance differential for the underlying indexes looks like this.

DRW 1

It’s worth noting that these returns are backtested, and do not reflect fees for the ETFs. But because the two ETFs have similar fees – 0.60% for RWX and 0.58% for DRW – the real-time returns should have been similar.

Mixed… DRW has lagged in the past 5 years, but is significantly higher over 10 years. Of course, this is backtested theory – neither fund existed that long.

In terms of the philosophy of the two funds, the question really outlines how truly you hold to indexing ideals versus value-philosophy in your investing. The SPDR is market-cap weighted, like the S&P 500 or the Wilshire 5000. The biggest percentage of the fund goes to the stock with the highest market cap. The WisdomTree fund is dividend-weighted. The biggest percentage of the fund goes to the stock with the highest dividend.

Personally, I’m normally biased towards simple, market-weighted indeces for the US market. However, deep down, I’m a value investor at heart, and the concept of dividend weighting, particularly in foreign markets where security enforcement may vary, is fairly appealing to me, especially in a dividend-focused asset class like real estate.

As another nod to DRW, the WisdomTree fund has both REITs (Real Estate Investment Trust) and REOCs (Real Estate Operating Companies) in it. Not all countries have the REIT structure, which originated in the US. As a result, DRW also has far more stocks (224) in it than RWX (154).

I found a lot of good articles comparing these two:

In the end, I was very close to just splitting my cash between the two funds. That might actually be the right answer if you have sufficient assets. However, I decided that since the real estate market has been anything but value oriented for the past five years, my bias is towards the WisdomTree approach for this asset class.

If you are interested in these funds, I suggest you read all the above material yourself. Post here if you reach a different conclusion – I’m interested to know why.

P.S. In case you are curious, I went with a straight, market-weighted index (Vanguard REIT Index ETF, VNQ) for the US REIT portion of the portfolio.

An International REIT ETF is Born, and a Note on Why I Love ETFs.

For the first time, individual investors have access to an international real estate (REIT) index fund in an exchange-traded fund (ETF).  The StreetTracks Dow Jones Wilshire International Real Estate ETF began trading on the American Stock Exchange on December 19th, under the Ticker: RWX.

Details on the new ETF can be found on the StreetTracks Global Advisors website.

I am a huge fan of the new ETF fund structure for individual investors.  They offer a very transparent, low cost method for any individual with a brokerage account to create a diversified portfolio.  Unlike the various shell games that the mutual fund industry has generated over the years to hide the true expenses paid by individual investors, ETFs have very transparent expense ratios, and commissions for trading already reflect rock-bottom prices available at most brokerages.

ETFs are not perfect.  If you want to put $100 away every month, a tradition no-load mutual fund is the right way to go.  Otherwise, the brokerage commissions will kill you.  But for larger accounts, or for investing lump sums, the cost structure of ETFs cannot be beat.

Let’s take an example from my favorite fund family, Vanguard.  They offer a large family of no-load funds, and are famous for their low costs.

The Vanguard Total Stock Market Fund mirrors the entire universe of US Equities, the Wilshire 5000.  According to the Vanguard website, the Investor shares that you would purchase have an expense ratio of only 0.19%.  That’s fantastic compared to the average mutual fund, which charges over 1.0% typically for expenses.  But the exact same fund in ETF form has an annual expense ratio of only 0.07%.

7 Basis Points.  That’s it.  For a fully diversified stock portfolio.  $7 for every $10,000 invested.

Let’s take 3 proud fathers, each of which who wants to save $10,000 at the birth of their child for college 18 years out.  Father 1 invests in a typical mutual fund.  Father 2 invests in the Vanguard Total Stock Market investor shares.  Father 3 invests in the ETF.  Let’s assume, for this example, that all three return the exact same 11% annual return over 18 years.

At the end of 18 years, Father 1 ends up with $55,599.17 to pay for college.  Not bad, not bad at all.

Father 2 fairs much better.  Vanguard’s lower-than-average expenses net him $63,448.47.  Yes, 0.81% of expenses per year matters to the tune of almost $8,000.

Father 3, with the ETF, gets a little bonus in his stocking.  After 18 years, his account is worth $64,696.72.  Almost $1250.00 extra.

Now, the sharp reader out there might be saying, “Adam, you forgot the fact that the mutual fund has no commision cost.  What about the commissions for making the ETF trades?”

Assuming the $10 commission that E*Trade charges on the purchase and the sale, Father 3 ends up with $64,622.02.   Still about $1,183 ahead of Father 2.

Low, transparent expenses are only one reason I like ETFs.  The second is clear, transparent asset allocation.

There are now ETFs for everything.  Until recently, if you wanted to own gold, you had two options: buy the yellow metal itself, and pay storage/security costs or buy a gold mining stock mutual fund.  However now there is an ETF that just does one thing – it owns gold (Ticker: GLD)!

You might be wondering why this is on my mind lately.  Well, two reasons.

Reason 1:  It’s a new year, and one of the financial house keeping chores I like to do at the start of a new year is review finances, saving & investments, and make decisions for the new year.  One of the most important financial chores in any financial plan is “re-balancing” your investments across different types of assets.  Every year is different – some things do well, others do poorly.  Once or twice a year, it’s a good idea to re-set your balance so that you don’t end up over-invested in the things that have recently gone up, and under-invested in the things that have recently gone down.

Reason 2:  StreetTracks Dow Jones Wilshire International Real Estate ETF launched, filling a gap in most people’s asset allocation strategies.

Real Estate is an interesting asset class.  REITs, as a whole, have been on a tear the last few years, so like every boom, the stocks have run up and the yields have gone down.  Still, most analysts would agree that it’s a good idea to have a small portion of your long term savings in real estate.

No, owning your house does not count.  Your house is more a residence than an investment anyway, and it’s far too undiversified, both in terms of sub-sector and location.

There have been real estate mutual funds for a long time, and REITs, as a corporate structure, became big in the 1990s as a way for the average investor to own a piece of a large, diversified real estate portfolio.  However, for a long time, it has been hard for the average US investor to get international real estate exposure.   There has been one or two mutual funds that focus on the area, but they are fairly high cost.

Enter our new friend: StreetTracks Dow Jones Wilshire International Real Estate ETF.

Now you have the ability to allocate a portion of your investment in real estate to the global market.  The index isn’t perfect (this blogger, for example, seems to take issue with the geographic allocation and timing). Nonetheless, this is a great new option for individual investors to have, and in general, most US investors continue to be over-invested domestically, and under-invested globally.

There are also two strong contenders for domestic REIT ETFs to round out your real estate allocation:

  • StreetTracks Wilshire REIT ETF (Ticker: RWR)
  • Vanguard REIT ETF (Ticker: VNQ)

Hopefully, this information will get you thinking about your own asset allocation, and the potential for ETFs as a vehicle for your own savings.

Enjoy!

Saving Energy: Installing New Windows & Doors

I have now received the first empirical evidence that replacing your old windows & doors can have an impact on your utility bill.

Our house is one of the standard, ranch-style houses that were popular in the SF Bay Area in the late 1960s. It had the original, single-pane aluminum windows, and hollow-core doors.

We replaced the exterior doors a couple of years ago, but we just completed last month the installation of new, double-pane windows throughout the house. We also replaced the large sliding glass doors in our living room.

It’s a large expense, and while you are comforted somewhat that the money will come back to you when you sell the house, that seems like it will be very hard to prove. As a result, I’m really glad to see that our heating bill (our heater is gas-driven) for the first cold month of the year is actually quite a bit lower than last year.

Of course, the low gas bill could also be the result of us doing less cooking at home around the birth of my second son on October 30th. I’ll keep monitoring, but hopefully, the energy savings promised around this type of improvement turn out to be accurate.

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