Welcome To Josh's Blog O' Thoughts: Building Our House

Anyone who is building a house or considering an upgrade to their current windows, should take a look EfficientWindows.com. This site lists a lot of information about what types of windows are available, and which windows will work best for your location and budget. Information on the different types of frames, glass, and gas fills can be found.

If you have an old house with aluminum frame, single paned windows, you could be wasting a TON of energy.

Vinyl window frames are much more efficient. Vinyl as a material does not conduct heat like aluminum does. Additionally, vinyl window frames are generally hollow (aside from the necessary structure to make the frame stable), which produces pockets of air. The pockets of air actually do a better job of buffering heat transfer than a solid frame would.

Another thing to consider is your glass. Old windows were a single pane, which didn't put very much space between the outside and inside air. Most modern windows will generally be at least double pane (two pieces of glass separated by gas). The gas between the panes can act as an insulator as well. One of the common gasses used is Argon.

One last big thing to look into is LoE glass. LoE glass has a transparent metal coating on one side of each pane of glass (assuming a dual pane window). This coating helps reduce the transmission of heat through the window, thus making the glass more efficient in both the winter and the summer.

Those are just some of the basics of finding an energy efficient window. There is tons of other information at the website. Remember to look for high R-values, low U-values, and the Energy Star label.

Just a quick update on the house building project.

Since I last posted that we had accepted the bid pricing, a lot has happened.

- We had the closing on our construction loan. Now our contractor will be ready to turn in receipts for reimbursement. This was really the final step before we could really get started.

- The next step was to stake out the house and have the hole for the basement dug. We were expecting to see a very large hole, but were surprised that it was only about five feet deep at the deepest point. The back side is a walk-out basement so we were expecting zero depth there. But we need to add some fill dirt in front of the house to level out the yard a little bit. That's the reason for the "shallow" hole.



- Next, the spread footings were formed and poured. For those who don't know, the footings are poured below the frost line and are what the basement walls and internal load-bearing walls will be built on.



- Basement walls were then formed and poured. The walk-out side will all be stick-built (i.e. framed out of wood) so there wasn't much wall there.



- Then the waste pipe was laid which will lead to the septic system. Also, the lines for the geothermal heating and cooling unit were brought into the basement. These all need to be in before the basement floor is poured.



Now, the basement, garage, and all trenches are being back-filled with soil and sand. Soon, the basement floor will be poured, so things are progressing well. Tonight we have a meeting at the building center to pick out all our windows and other things. These need to be picked out so that the framers can start framing in the next couple weeks.

Will report more when I have it.

Well, my last house-building-related post said that we were still waiting for a bid from our contractor. We got it and he was 13% over our budget. Granted, he was estimating on the high side for a lot of things to make sure we were covered, but 13% is still a lot. We worked with him to cut this down a little bit. We've had to save some things for another time (like the deck off the back).

When it was all said and done, we got our second revision of the bid which was still 5% higher than our original target. We were pretty happy with it, but we weren't sure how the bank would respond to approving us for 5% more. Additionally, the interest rates had gone up .625% since I was originally pre-approved. Well I went back with my new number and the higher interest rates and had a new pre-approval letter the next day! Now that's service.

I think a HUGE key to getting financed near your debt-income ratio maximum, is the amount of down payment you are making. In our case, we are making a 20% down payment which also allows us to avoid the Private Mortgage Insurance (PMI), and allows us to skip the escrow account. We want to scrip the escrow account so we have a little more control over our tax and insurance payments.

Anyway, I fully expect to interest rates to come down the second half of the year here. Actually, I've already seen a little bit of a dip. And if my theory about interest rates and gas prices is correct, we should see further drops in rates corresponding with the recent gas price drops.

Since we are in the process of Building Our House, I have had a keen interest in mortgage rates as of late. When we first started this whole process, the rates in my area for a 30 year fixed mortgage were hovering around 5.625%. Recently, however, the rates are up to 6.25%. That's a substantial increase in the past 3 months. Knowing that the Federal Reserve Board did not raise rates at their last meeting, I thought back over the past three months to determine the culprit.

What has changed over the last three months? One major thing that I can think of is a major spike in gas prices. Could there possibly be a correlation between the two? As costs of gas goes up, the consumer price index (a major indicator of inflation) goes up as well. This is because gas and transportation costs are built in to a lot of products. When inflation goes up, financial institutions (usually in response to the Federal Reserve Board) raise rates which put strain on people's spending. By decreasing spending, inflation can be held in check or reversed. Sounds like gas and mortgage rates could be linked right?

I took a look at a graph of gas prices over the past 3 months and a graph of mortgage rates over the same time period. Low and behold, they go up in unison.

This may or may not be correlation. Or it may be a weak correlation. More study would be required to determine if the two are linked, but for my very basic examination, there appears that there could be something there.

It's been a few weeks since I posted an update on the process of building our new home. We finalized the plans a couple weeks ago and are now waiting for pricing to come back from the builder. We are told that this process takes about three weeks, so we should hopefully hear something yet this week. A friend of mine is also at the same stage in the build process, but they house they will be building is off a stock plan that the builder builds qutie often. With only minimal changes, they got a bid back in about two weeks. My guess is that a custom plan takes a little longer to bid as it is entirely new to the contractor and all the sub-contractors. I will report back when I have more.

Well I thought it time for another update on the building of our new house. We are still very early in the process. If you've been reading the blog, you know we already have a lot. We are currently in the process of working with our contractor (and the designer he uses) to get our plans worked out.

We had all these great ideas initially and even done our own drawings. When we got the first revision back from the designer though, a lot of things were changed. We were initially a little bummed by this, but the second revision was much more to our liking. We have a few more changes to make to the interior and then it should be just about perfect. Hopefully we can get that finished up this week.

So a helpful tip for those that are planning (pun intended) on getting their house plans drawn: don't sweat the first revision. Apparently, it takes a few revisions to get it right.

Stay tuned for more!

The meeting of the Federal Reserve board today ended with the expected results. The Fed has decided to leave interest rates unchanged for the time being. The last time rates were chagned by the Fed was in mid-2006 which ended a long run of rate hikes aimed at curbing inflation.

While they did leave rates unchanged, their outlook for the future did not mention any rate decreases, something that many investors were hoping to hear. At this point, their outlook appears to be steady with a slight chance of a rate increase if inflation doesn't slow as much as predicted. However, there are people that feel rates will lower near the end of 2007 to help with a slowing economy.

Unfortunately, the lack of expectations for lowering rates caused some havok on the stock market again. Some times I just can't fathom how fickle investors are. Do they really think they need to dump their stocks right away because of an unchanged outlook? An article I read recently pointed out that the people that really do well in the stock market are not the people that make these kinds of trades. Those people that get wealthy from stocks HOLD their stocks for extended periods of time usually only making a couple trades a year. If they have invested in a reasonably sound company, they are likely to weather the market fluctuations just fine.

Bottom line is interest rates don't appear to be changing much for the rest of the year, so don't hold off (or rush) on getting that mortgage.

When considering a lot to build your house on (or when considering purchasing an existing home for that matter), it is important to find out if the lot is in a flood plain. Basically, this will tell you the liklihood that your home will be involved in a flood. Not only do insurance rates increase for people in flood plains, but you may also end up in fear of floods everytime it rains (I know I would be).

If have found a great website to easily help determine flood plains in your area. The FEMA Map Service Center allows you to zoom in on a map of the U.S. to any location of interest. It will then pull up the appropriate flood plain map for that area.

All you have to do is browse to the FEMA Map Service Center website and click the Map Search menu item. Good luck!

For our new home, we have decided that we really want to get geothermal heating and cooling installed. For those who don't know, geothermal heating and cooling works by exchanging the temperature stored in the ground (about 5-6 feet deep) with the temperature in your house. Since the ground temperature at this level stays fairly constant year-round, the warmth of the Earth can be used to heat your home in the winter and the coolness can be used to cool your house in the summer.

They operate by pumping fluid through coiled tubing which is buried in trenches in your yard. With our 9 Acres to build on, we should have plenty of space for the trenches. Therefore, you will only be using a small amount of electricity to run the pump and a fan to blow the heat through the duct work. This can be a major savings. However, the startup costs are greater with a geothermal system in Iowa coming in around $8,000-15,000 depending on several factors.

For us, it's not only about saving money on our utility bills and the fact that we won't need to have an LP tank, but we like this opportunity to help be a little "greener".

For some more information about geothermal heating and cooling see:
Wikipedia Article

About 5 months ago my wife and I started discussing building a new house. After talking with the bank in February to determine how much we'd be able to afford, we started working with our realtor to find a lot.

Well, we've found one that we are very happy with! At 9.1 acres, it's a little bigger than we were initially planning, but that's ok. The lot is at the end of a paved court so it's the perfect blend of civilization and country living. It also has some nice slopes to it which make it perfect for a walk-out basement with little grading and makes the lot more interesting to look at than just some flat land.

Here are two pictures of the lot from the court. In these pictures, I am facing south or southwest. i.e. The court is at the northeast corner of the lot.





This is a picture from the west hillside looking east. You can see the court with our vehicle in the background.



This picture is from the southwest corner looking northeast. To the west of the lot is a sizeable woods that is not on our property nor are most of the trees on the west property line.



This picture is from the east property line looking north.



This stand of trees is on the south end of the lot and runs the full length east to west. The trees grow around a small stream that may actually be dried up. Our southern property line actually extends beyond the trees and stream by about 50 feet meaning they are on our lot.



Anyway, we are very excited about our new land and starting the process of working with a builder to get floor plans and bids.