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This institution is not federally insured. You know two things that just don't go together or shouldn't go together? Springtime and procrastination. Hi, I'm Rob West. The birds are coming back, the daffodils are blooming, and the maintenance chores you put off all winter need to get done. Maybe you can work off a little winter weight in the process. I have a to-do list for you and then it's on to your calls at 800-525-7000.
That's 800-525-7000. This is faith and finance. Biblical wisdom for your financial journey. Okay, so here at Faithfi, we always want to help you manage your time, talent, and treasure. And make no mistake, do-it-yourself preventative maintenance is a wise use of all three of those gifts you received from God. The more time and talent you have, the less of your treasure you'll have to use to get things done. But if you don't have the physical ability or know-how to do any of the chores on our list, it's also wise to hire someone to do them.
Now, of course, we always want to use the Bible as our ultimate guide and Proverbs 14-23 tells us, In all toil there is profit, but mere talk tends only to poverty. That means we'd better get started with our list. So first up, inspect your outdoor air conditioning unit to make sure it's ready for summer. Look for debris inside and around the unit. Leaves and other material can collect over the winter and could cause damage when the system kicks in. Of course, it's always wise to have a qualified heating and cooling contractor clean the coils and service the outside unit. And that's not a DIY project for most folks.
An annual maintenance checkup to clean coils, change filters, and possibly add coolant can add years of service to the unit. Definitely worth having done. Next up, take a look at the roof. You may be able to do this from the ground and we'd recommend that if possible. Did you lose any shingles over the winter? If you spot damage, you can call in a professional roofer to make repairs. You may also want to start saving a little each month toward a new roof.
They do wear out and these days can cost anything from $7,000 to $15,000 or more depending on the size of your house. Set up a separate savings account that can earn interest until your roof needs replacement. Our next spring maintenance chore can't be done from the ground. Inspect for loose, leaky, or clogged gutters around the house. You'll need to get on a ladder for this one so if you're not comfortable and careful doing that, again, it's better to hire someone. It's important to have this done though because drainage problems can lead to water entering your basement or crawl space causing further damage. If the gutters are only clogged, you can try removing the debris from the ground with one of those hose attachments shaped like a candy cane.
Various models sell online for $15 to $115. Anytime you can avoid getting on a ladder, it's best to do it. Next, check around the yard and next to the foundation for low areas. They can fill with spring rains and also threaten to flood the house.
You can fill them with soil and spread grass seed there to eliminate the problem. You should also test your outside faucets for freeze damage. How do you do that, you ask?
Well, it's pretty simple actually. Just put your thumb firmly over the faucet opening and then turn on the water. If you can stop water from coming out of the faucet, the pipe inside your home is probably ruptured from freezing. Turn the water off immediately and replace the entire faucet unit. Unless you're very handy, you'll probably have to call a plumber for that one. By the way, if you're wondering why the pipe inside your house wasn't leaking all winter, it's because the actual shutoff valve for the faucet is in the pipe a foot or more inside the house.
That prevents flooding if the pipe closest to the outside wall is ruptured. Okay, here's a spring maintenance project you may not have thought of. If you stacked firewood for heating over the winter on your deck or otherwise near your home, it's time to move it. You don't want it close to the house over the summer while termites and carpenter ants get busy. Move the wood further away or stack it away from the house to begin with so you don't have to move it in the spring. Here's another one, especially if you live in the north where moisture is constantly freezing and thawing. That can cause cracks in your concrete patio, sidewalk, and driveway, so inspect those areas and fill any cracks with cement filler or silicone caulk. Otherwise, they'll just keep growing and widening every winter. And one last spring maintenance project, prepare your lawnmower for another season. Do a walk around inspection and tighten or repair outside components on the mower such as handles, grass shoots, and wheels.
Then change the spark plug and oil and inspect air, oil, and fuel filters and replace as needed. Alright, those are your spring maintenance tips. We hope they help you to have an enjoyable summer season. Your calls are next, 800-525-7000. This is Faith in Finance.
We'll be right back. and have been trained to offer biblical financial advice. To find a certified kingdom advisor in your area, visit faithfi.com and click Find a CKA. Many in the Middle East are going through horrific circumstances and are seeking refuge in Lebanon. Heart for Lebanon is bringing them hope, and now you can help. We endured shelling and hunger.
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Give now at faithfi.com slash Lebanon or call 888-201-5577. I'm so grateful to have you with us today on Faith in Finance. I'm Rob West. We're taking your calls and questions now on anything financial. The number to call is 800-525-7000. That's right, lines are open, but the calls will come in quickly. So if you've got a question, go ahead and get in the queue. We'd love to talk to you today.
800-525-7000. Hey, we just released our brand new four-week study called Rich Toward God. This is a great study for you to dive into God's Word around some really important themes around abundance. God created us for abundance. The challenge is we often look for that abundance desire to be satisfied in the things of this world. And that's not God's intention. He is our abundance. What about the uncertainty of tomorrow or even what it means to live rich toward God? All of these themes and more are tackled in this four-week study taking you into God's Word, perfect for individual study or a small group. And again, you can check it out at faithfi.com.
Just click on Shop at the top of the page. Let's begin today in South Carolina. We'll talk to Cheryl first. Go right ahead.
Yes, hi. Thank you for taking my call. I have a question about my mortgage. I have a $225,000 mortgage left on my home.
I'm seven years old. I have like maybe $130,000 liquid assets in the bank. And I'm just wondering if I should pay a lump sum toward the principal, you know, just to help with the interest rate and the interest that's on the loan.
Yeah, I need some guidance with that. Sure. Do you know what the interest rate is, Cheryl?
$5.25, I believe it is. Okay. Yeah. How long have you had this mortgage? 2018. Okay.
Yeah, I'm a little surprised that it's that high. Did you have a credit score that was on the low end or a lack of income? Originally, it was my husband passed away last year.
Originally, it was under his name, so he handled all of it. I'm just inheriting the home. Sure.
Yes, ma'am. Well, you may want to check on that. You may find that it's actually a little bit lower than that. I wouldn't be surprised if that was the case. But it also may be that $5.25. And I think that does factor in. You know, if it was $2.75 or $3.25, obviously, that's a very low interest rate.
This is a little higher. And, you know, that money in savings is certainly not earning after you pay taxes on the interest, going to earn for the foreseeable future, at least, you know, enough to offset the cost of the insurance. So it does make sense for you to pay it off both to get out of debt, so you're free and clear, but also because you're going to spend more on interest than you're making with that sitting in savings or even a CD. Let me ask you just in terms of, you know, the non-financial side of this, not the dollars and cents and the interest that you're going to pay, but just the peace of mind and even your own conviction from the Lord. Are you wanting this to get paid off just as soon as you can, or are you comfortable just paying on it over time, if it makes sense financially?
As soon as I can. Okay, sure. And I can understand that. I know that with owning your home comes a lot of peace of mind, of security in that, and so I can certainly appreciate that. Now, you mentioned you had $130,000 in savings. Is that the extent of your liquid savings, Cheryl?
Yes. Okay, and so that would include what I call your emergency fund. That's all in one place. Okay, the emergency fund is somewhere else. Okay, and what do you have in your emergency fund? I have about, I guess about $20,000.
Okay, yeah, great. And what would you say on average you spend over a month's time? Let's see, with the mortgage, maybe $2,500, I'd say $2,500. Yeah, that's great.
And let's just round it up because maybe there's some things that come, you know, a couple of times a year or, you know, don't happen every month. So let's say it's on average $3,000 a month. So if you were to have six months expenses, that's $18,000, so you've got a little bit more than that.
That's great. Now, let's talk about your income. Are you living on Social Security? Do you also have a pension? What are your income sources? Social Security and I have a small pension and I'm retired.
Sure. And are you taking a spousal benefit or a survivor's benefit or your own benefit? Spousal. Okay, yeah.
And so even, you know, your own benefit, the spousal benefit was higher, the survivor's benefit was higher than your own, obviously. Is that right? Yes, it was. It is. Very good. And the Social Security and pension, is that enough to cover all of your bills every month with a little bit left over?
No, it's not. Okay, so how are you supplementing that shortfall? I'm pinching every month off of my savings. I see, okay. Yeah, and what would you say in a typical month you're pulling from your savings to make your budget work? I would say maybe close to maybe $800. Okay, as much as $800 per month out of the $130,000, is that right? Mm-hmm, yes.
Okay, yeah. And so that's a little bit higher than I would like and, you know, the other challenge we've got is if you were to put a substantial amount of that $130,000 against the mortgage, it would be great if we got to the place where we could pay off the mortgage because then you'd eliminate your largest expense every month, which is that mortgage payment. The problem is by you paying, let's say you put $100,000 against that $225,000 mortgage, that's not going to change your payment one bit, even though it drops it from $225,000 to $125,000, the payment stays level unless you refinance it or pay it off. So it's not going to help your budget, except now you've drained your cash way down. And you know, you're in a situation where, you know, you're you're pulling more than you should. And so you're going to deplete that over time. And then at that point, we've got nothing to fall back on and you still have the mortgage.
And so you're you're not really cutting any expenses. So I think at this point, we've got a couple of options. I think number one is, if you're comfortable taking a little bit of risk, and I say a little bit because we can manage that with the kind of portfolio that would be built. But, you know, one option is to hire an advisor who would build a portfolio where with that 130,000, he or she would buy a mix of maybe CDs and some high quality government and corporate bonds, and then maybe a small portion of stocks. The idea would be that, you know, you get that up to where you could take 5% a year and never deplete the principle. Now 5% is lower than what you're what you're pulling now. I mean, 5% on 130,000 is 6500 a year, which is only $550 a month, you're pulling, you know, $250 more than that.
So I'd, I'd want you to try to get that down a little bit if you can. The goal is for you never to deplete this money, and you'd, you know, still be able to, you know, maintain it so that you could tap into it if you needed to. But it's also there to cover your expenses. The other option is to replace your existing mortgage with what's called a reverse mortgage, where essentially, you wouldn't necessarily take any extra money out of the home's value. But the reverse mortgage would pay off the current mortgage. So immediately you would get rid of that monthly payment.
Now your income need is much less because your biggest expense is gone. And at that point, that balance that was paid off by the reverse mortgage, so in this case, 225,000, it would grow only by the interest that would be incited and any fees, but not because you're continuing to draw the equity out. And then when you pass away, or you sell the home, the mortgage reverse mortgage would be paid off out of the proceeds of the sale of the home. Is that a term you're familiar with a reverse mortgage? Yes, I am. Now my question with that is, if I leave the home to a relative, how would that, you know, work with the reverse mortgage for that? It's a great question.
And the answer is, at the time of your death, the home would be sold, whatever balance exists on the reverse mortgage would be paid out of the proceeds of the home sale, and then whatever's left would be passed to your heirs or go to charity based on your will. I've got to take a break, Cheryl, but I want to finish up with you on the other side of this break so we can just finish our conversation. We'll be right back. Stay with us. We'll be right back. We'll be right back. We'll be right back. We'll be right back. We'll be right back. We'll be right back. We'll be right back. We'll be right back. We'll be right back. We'll be right back. We'll be right back. We'll be right back. We'll be right back. We'll be right back. We'll be right back. We'll be right back. We'll be right back. We'll be right back. We'll be right back. We'll be right back. We'll be right back. We'll be right back. We'll be right back. We'll be right back. We'll be right back. We'll be right back. We'll be right back. We'll be right back. We'll be right back. We'll be right back. We'll see you then. Bye-bye.
