Guest Post: Release Your Equity With a Reverse Mortgage

A reverse mortgage is a mortgage loan taken out with your own property used as security and the amount loaned not having to be repaid until your death or if the house is to be sold before that time. The mortgage provider will hand the money over at the beginning of the loan which will attract compound interest from that day on although no repayments will be required while you remain alive or if you wish to dispose of the property beforehand. If there is any money left over following the event of your death and the property being sold, the excess amount will be distributed among your beneficiaries. If on the other hand you decide to sell the home you will need to satisfy the mortgage debt in the usual way before any remaining monies can be distributed.

The three main characteristics that make a reverse mortgage different from other types of mortgages are:

• There are no mandatory payments required until what is known as certain 'trigger' events take place. These trigger events include your death or that of your spouse or partner if their life outlasts your own, the earlier sale of the property, your leaving the property or a breach of the contract occurs.
  
• There is no fixed term as there is in a normal home loan as a reverse mortgage lasts until the death of the surviving owner or one of the other 'trigger' events occur.
  
• Interest is charged and compounded over the life of the loan.
  

Eligible applicants will be allowed to borrow up to a limited amount against the security of the property as long as it is your primary residence, although there are circumstances when a reverse mortgage can be arranged with a non-owner occupied property being accepted as security. The beauty of such a loan is that you will never be in default due to not making any repayments other than breaking one or more of the conditions that will be imposed such as not maintaining the property in a satisfactory manner. If the property does fall into disrepair the lender will have the right to carry out the maintenance that is required and have the cost charged to the balance of the loan. Factors Determining Eligibility for a Reverse Mortgage A reverse mortgage loan applicant must be able to satisfy the following requirements:

• Be at least 60 years old, in most cases, and where there is more than the one borrower the youngest determines the age eligibility.
  
• The amount that will be loaned will depend on the lender's own policy. This is usually calculated by taking into account the applicants age, as the older the applicant the larger the amount available to be borrowed.
  
• Another factor will be the value of the property itself as the more valuable the larger the size of the loan also. The loan to value ratio (LVR) will refer to the amount advanced against the value of the property, the maximum LVR is commonly around 50 percent or lower.
  
• The minimum amount can be as low as $10,000 or any other specified amount.
  
• If there is an existing mortgage held over the property it must first be repaid in full as the reverse mortgage provider has to own the only mortgage being secured by the property.
  
• The property will need to be valued on a periodic basis with the cost either borne by yourself or added to the loan amount.
  
• The location of the property may also be a factor.
  

The interest rate charged for a reverse mortgage is usually a little more than the accepted standard rate at the time. It is normally accrued daily and allocated to the home loan account on a monthly basis, in other words it is compounded, meaning the debt increases considerably the longer it runs. For instance if you were to borrow an amount of $30,000 at an interest rate of 8.5 percent and a monthly account keeping fee of $10, in 10 years times the debt will have grown to $71,860. This also assumes the interest rate remains constant over that time. Other costs are also incurred such as the application fee and if these are added to the amount being borrowed they too will be subjected to compound interest. If you wish you can arrange the loan to be paid to you in the manner of a regular income. You can have this done through a line of credit being established or receive small regular draw downs. You will not be charged any interest on the portion of the loan you haven't used. Of course if you wish to take a lump sum payment you can but the interest will begin on whatever amount you draw down on. A reverse mortgage can be a quite useful way of turning your equity into cash at the time you need it the most. After you have retired and no longer earning an income, especially if you haven't any savings or superannuation to fall back on.

This article was written by John from Home Loan Finder.

Never Waste a Teabag

This is a story of progressive frugality. One learns as one goes along.

I have always used teabags twice when possible to save money; that's nothing new. One day as I was about to toss a twice-used teabag into the garbage, I happened to think that the string might be useful for something. Granted, it was a short piece of string, but I thought several could be tied together to use... well, to tie things together or something. With no more thought than that, I started saving them until I had a handful, then sat down and tied them together and wound them into a small ball.

I could almost say "end of story" and stop there, except that I was cleaning out a shelf and found an old dust mop cover (a real dust mop, for those of you who think they are disposable) that I had made from a skein of unwanted cotton yarn. I wondered if I could ever get enough teabag strings together to make another one. (Yes, I still have the same dust mop from at least 20 years ago.)

Why not? So I started saving teabag strings without tying them together and now I have a pretty big handful.

Then, one day, again as I was about to toss a used, now stringless, teabag, I happened to think that, since I throw looseleaf tea onto the compost, I could just as well throw teabags on the compost. Eventually I discovered that the bags take a lot longer to decompose than I wanted to wait. Next step: Let each teabag dry so I could rip off the end and dump the tea out. Now there was only the tag and the empty teabag to throw away.

I did this for awhile, then, as my mind slowly progressed to more frugal ways of looking at teabags, one day I decided to see if I could save an empty teabag to reuse. I could. I cut a narrow strip across the top of the teabag and dumped the contents out. The teabag seam stayed crimped. Now all I have to do is put my own tea, herbal or otherwise, into the teabag, fold it again and staple it at the top, just like it came originally.

So now the process goes like this: One teabag, used for two cups of tea, go on a clip on the stove where it can dry thoroughly. Once it's dry, which takes a couple of days, I take it down, pull the string off (still don't have enough for a dust mop cover) and cut carefully across the top. I then empty the dried tea leaves into a container, fold the teabag and put it away with the others, to be used as the summer produces herbal tea material. Eventually, I empty the container into the compost and start over.

Now I'm trying to come up with some way to fasten the teabags without having to use staples. Glue either isn't safe to imbibe or dissolves in boiling water, so that's out. Any other ideas?

EDITED: I went ahead and used staples and made teabags from loose dried hibiscus flowers. It worked very well! I will continue to save teabags! :)

KIP week

Do you knit? This week (June 12 - 18) is the worldwide "Knitting in Public" week. Take your yarn and needles with you to the bus stop, the doctor's office, a concert, a picnic... wherever you happen to be in public. Let them know that knitting is not a dying art! Some people make it a demonstration, knitting on the library lawn or in front of a yarn shop, in a shopping mall and so on. Get some knitting friends together and have a "knit-in."

Frugal? It can be. Reuse yarn, buy at super sales and be creative with what you have.

Related posts and articles:


Mug rugs and quick gifts - A free pattern and some frugal thoughts about it

Frugal toasty toes - Recycle an entire sweater to keep your feet warm this coming winter.

Guest Post: How to Can Garden Produce

By Bailey Harris. Bailey writes for www.insurancequotes.org.

If you are worried about your family eating fresh and healthy foods on a budget, you may want to consider growing and canning your own garden produce. At first, the thought of canning your own foods may seem a little overwhelming, but the process is actually very straightforward and easy.

Supplies Needed for Canning Produce

Before you can begin canning your own garden produce, you will need to be sure that you have all the correct supplies. At first it may seem quite expensive, but many of your supplies can be reused. Supplies that will be needed include a recipe, canning salt, canning jars, new lids, new rings, a stainless steel funnel, jar lifters, and either a pressure canner or a boiling water bath canner. You will also need a fairly large workspace and a couple of hours of time

Pressure Canning vs. Water Bath Canning

When you are canning your own food, it is very important to heat it to the correct temperature. This will kill all of the bacteria that can grow and make your canned food unhealthy. If you are canning foods that have a high acid content, such as tomatoes, fruits, or pickles, you may use the boiling water bath method. This method is very simple and inexpensive. If you are canning foods that are not high in acid content, such as vegetables or meat, you will need to use a pressure canner. A pressure canner may seem a little pricey, but it is usually a onetime purchase that will last many years.

Cooling and Testing the Jars

Once you have heated your canned items to the correct temperature, using either the water bath or pressure canning method, you will need to let your jars completely cool. This can be done by simply letting your jars sit on the counter, at room temperature, for 12 to 24 hours. Once they have cooled, you will want to check that the lids are sealed. To test the lids, simply press down in the middle of the lid, if it does not move it is properly sealed. If the lid moves then it is not properly sealed and should be placed in the refrigerator and eaten before it spoils.

Storing Canned Produce

Once your produce has been canned and cooled, it must be labeled, dated, and stored. It is best to store your canned produce in a clean, cool, dry, and dark place. Try to keep your canned goods away from direct light, this can cause discoloration. Most canned foods should be used within one year. Canned items start to lose flavor, texture, color, and nutrients if they sit on the shelf for more than one year.

Growing your own garden and canning your own produce can be a fun and economical way to spend some great time together as a family. It can be very rewarding to see, eat, and enjoy the canned produce knowing that everyone in the family had some part in making it and that you did it together.

Saving pennies and making pennies with rewards programs

Or nickels or dimes or dollars. Or even tens of dollars and occasionally hundreds of dollars. I'm talking about the rewards programs and the "get paid to" programs on the internet. The chances are that you can make at a minimum enough to pay for your internet connection.

Some pay cash, some pay in gift certificates to various sites and stores and still others pay in "prizes," where you choose what you want (like shopping) and then you work toward having enough points or tokens or whatever they call them.

If you have a few moments online, why not try them? This is the other side to saving money where we can: Making money where we can. The only thing it takes is a computer with internet access. To get cash, many of the sites require you to have a Paypal account and you'll have to have a physical address and an email address and that's about it.

Here are some of the programs that I like best:

MyPoints - This is one of the oldest and best established programs on the internet. They send emails usually worth 5 points each. You simply click on the link provided and you're immediately credited. Besides that, you can earn by going to the site and clicking on the "Easy Points" link in the navigation bar. There are various offers and videos in that section. You also earn when you buy things through them. There is an enormous list of companies on the site, but you must start on the MyPoints site to get credit. Download their "toolbar" which is a search bar, and you will get credit for searches each month. They started at 75 searches and I can't remember how many points you got for that, but last month (May), they gave me 400 points for 153 searches. They will send an email alerting you to the search requirements each month, usually mid month, so use their search bar anyway. It isn't the greatest search function, but it's getting better.

Mypoints offers a very long list of gift cards that you can get, from Amazon to Walmart. They have recently begun paying cash through Paypal, too.

Swagbucks - New on the scene, but robust and fun, too. You can make points by searching, through which points are randomly given. About every other search will get you points, anywhere from six to thirty. The lower amounts are more common, of course. Make points also by checking the home page where there is sometimes a video to watch for a couple of points. Offers of various kinds will get you points, including free sign ups and things you might do anyway. Also, watch "Swagbucks TV" but only if you have something else to do while it's running. You get three points for 10 clips. Some of them are less than a minute, but some run far longer. If you're reading your email, start up the Swagbucks TV and check it every so often. I read somewhere that you can make up to 75 points each day through the TV, but I've never got that far! They also give out codes, which are kind of hidden and hard to find until you get the hang of it.

Swagbucks has all kinds of rewards, from cash to gift certificates to merchandise and donations to charities. You can rack up the Amazon gift certificates quickly (well, quickly for this type of program).


I do several more, mostly depending on how much time I have and the mood I'm in, but these three are my favorites. They make take some time, but they're an easy way to get a little more cash or merchandise. If you spend wisely, you can use them to save money. For instance, I recently ordered a cable modem and paid with Amazon gift certificates, at least half from rewards programs. I will save the $7 fee that Comcast charges for renting their modem. That's money saved all around.