Monthly Archives: April 2014

Electrical Reading


Posted on April 22, 2014 by

As I went through my budget, it soon became apparent that I would need to put in a considerable amount of sweat equity to get the job done for what I could afford to pay.  We already talked about how I would take care of the concrete ribs and steel studs.

But I always planned on hiring out for most of the more conventional trades (such as the excavation, concrete work, plumbing, HVAC, etc.), but the sum total was just too high for my budget to accept and something had to go.  I chose electrical for a number of reasons.  First, Cost.  The electrical quotes were particularly ridiculous, electricians were doubling or tripling the quote due to FUD.  Second, experience. I have done a little bit of wiring in the past, like adding a circuit and some lights and outlets to my current home.  I was a bit concerned about doing the main panel or grounding system, but a friend assured me it was possible.   Third, tool costs.  Of all the options, the electricians tools box is the cheapest.  It is certainly cheaper to buy my own electrical tools than to purchase a backhoe and bulldozer to do my own excavation.  Bottom line.  I think I can handle electrical better than I could handle HVAC or Plumbing or concrete work.

I am also getting some minor help from some friends with some better experience, and I plan to take it slow and learn as I go.  But in the mean time, I hit my local library and got out a bunch of books on the subject, and that is also the subject of this post…

I skimmed through most of the books over about 3 evenings.  I was really just looking for the books that seemed most applicable and had the best approach to teaching.  I chose to renew the top few, and read those completely over the past couple weeks (including the Easter Holiday).  These were the best ones…

note: with wiring, the code changes from year to year, so you really want to find the books that are up to date enough with the National Electric Code so you can pass inspection.


Wiring Simplified (44th Edition); This book had the fewest pictures, but gave the most specific references to the 2014 National Electrical Code.  The authors of this book (Richter, Schwan and Hartwell) are extremely well respected.  The writing style was a little bit dry, but I liked how, in addition to explaining what the NEC rules were and were to find them in the code, this book also explained the “why” behind each rule.   “Wiring Simplified” really covered everything from the planning stage to how to actually setup the service entrance and wire everything up.  In also included tricks for making the job easier.

Wiring a House (5th Edition); This is one of those books with pictures on every page.  It stood out for me because it was really about wiring a whole house, which is what I needed to do.  Many other books seemed focused only on renovations.  The Author, Rex Cauldwell, also has a great reputation and brings both his experience as a master electrician (and plumber) and his degree in Electronic Engineering to this book.  He tells you how to meet the code, and then common sense ways you should exceed it.  The explanations and images are excellent.  The book is actually a fun read with humor sprinkled throughout and as a result, I was able to read it much more quickly than some of the other books.

You’re about to learn all the top secret information about… wiring that contractors rarely discuss.  You’re putting your ear to the keyhole and listening as we discuss what to buy and what to avoid, what looks good and what really is good, what works and what doesn’t.  ~ Rex Cauldwell, Wiring a House, p 207.


I have one more book to go through, I may come back and put that here later…

I took some of what I learned from the books, YouTube, friends, etc. and put it here under Technotes => Conventional Systems => Electrical.

Number Crunch


Posted on April 15, 2014 by

Embarrassed about the numbers

I am actually still waiting on the appraisal (should know early next week).  This is a quiet time to crunch numbers and prep for the closing on the loan.

I wanted to blog about bank loan numbers and how I made my decisions (in case it is helpful to others), but I am a little embarrassed about how much I plan to spend and about how the new house will be double the size of my current one.

We live well within our means.  We buy used cars and my current one is 14 years old, we don’t own any fancy electronics (we don’t have an i-anything), my wife has a 3 year old laptop and a free flip phone with a minimal plan.  My computer and cell phone actually belong to my work, etc.  We do not try to “keep up with the Joneses.”  On the other hand, I do have a good job with a good salary and regular bonuses.  And the house needs to be large enough to have an office (because I work from home), school room (since we plan to home school) and room for visitors (since our guests come from far away and usually need to spend the night)…

Anyway, my solution is to pretend that I am going for a $100,000 loan so you can see the relative amounts without thinking too badly of me.

Here is the mortgage situation…

In the aftermath of the housing bubble, a lot of banks were severely burned.  The first thing they stopped doing was making construction loans to crazy people who wanted to build earth sheltered homes, especially if they wanted to be their own GC.  There may be a few more doing it now, but back when I was shopping in 2009, there was only one company willing to do it,  GreenStone Farm Credit Services.  They had not played the games and were in very good shape after the crash. We used them to buy our land and now we are just a few days from hearing back on the house appraisal to see if we will get our construction loan.

The Construction loan starts with a 4.25% variable interest rate.   That is normally not something I would risk, but it is only for a year and it has been 4.25% for a very long time.   I would get a line of credit and monthly payments would be interest only (no principle) on the money I already spent.  In June of 2015, the loan would automatically convert over to a 30 year mortgage at a fixed rate without any additional closing fees (they are built into the upfront fees).

There are two problems.

1) Green Stone charges higher interest than anyone else I can find.  At the time of writing, the average mortgage rate for a 30 year fixed, 0 point mortgage is 4.44%.  Greenstone’s rate for the same mortgage would be 5.15%  That makes a big difference in terms of your monthly payment and total interested paid.   When I called them up and asked them why I should pay such a high rate for their loan, they said they offer better service (which is true), and that they wouldn’t be selling my loan to anyone else (which doesn’t bother me).  They also mentioned the patronage program, which has paid about 0.5% back over the past few years, which made their rate half a percent better than it appeared.  They didn’t say it, but I guess they know I am not going anywhere right now anyway.

2) The second problem is uncertainty because we don’t yet know what the interest rate will be 1 year from now when it kicks in.  My insurance guy is pretty sure it will go up, but that is because he wants to sell me something called a “Rate Commitment Fee”.  This fee is 0.75% of the total loan amount and would allow me to fix the rate where it currently is.  We are talking thousands of dollars betting that the interest rate will go up…  I had to crunch the numbers.

Using my fictitious $100,000 loan amount, the “Rate Commitment Fee” would be $750.  So I looked at what the 30 year mortgage would be at the current 5.15%.  I put in a column for monthly payment and one for total interest paid (if I paid for the 30 years).

Of course, I also ran tables for how much quicker it could be paid off if I tossed in an extra few bucks a month (I did a full table with a row for each additional amount).  I totally plan to do that, so I hopefully wouldn’t get hit with the total interest numbers shown here…  I also compared with the lower rate for the 15 year loan which would save even more money, but we decided that while that was doable now, it could make things more difficult if I lost my job (its not flexible enough)…


Then I considered what could go wrong…  I created rows where I increased the interest rate to 5.5%, 6% and 6.6%.  I looked at how that affected the monthly payment and the total interest paid. Then I calculated how long (in months) it would take me to pay off the “Rate Commitment Fee” as well as the total savings for each scenario…   The chart looked like this (rough no formatting ;^)


So, what this is saying is that if I pay the 0.75% “Rate Commitment Fee” and the rate only goes up by less than half a percent, I would still end up better off in less than 3 years and I save a considerable amount of interest (nearly 10 times the fee) in the long run.    If it goes up by almost a percent (which is the most that I really think is possible without a major world shift), the fee would be paid off in 14 months and I would save more than 20 times my investment in interest…   In other words, if I think there is any chance that the interest rate will go up, the good bet is to pay the Rate Commitment fee…

So, is there a chance that the interest rate will go up?   I don’t think so.  Obama is working to raise the minimum wage. The natural effect of that would be inflation which would automatically lead to higher interest rates…  But there is nothing natural about an election year.  Obama and the Democratic party will be working hard this year to make sure that the Republicans don’t get to say, “I told you so.” about an inflation until after the election.  Eventually, I expect the interest rate will go up based on market forces driven by a decent economy and increased minimum wage.

So, I do NOT plan to pay the Rate Commitment fee.  But I will want to lock in to a fixed rate before the economic forces to kick in in 2016.

Hedge my bet?

After my construction loan is complete, I will have a normal mortgage on an existing house. There will be lots more banks that would be happy to talk to me.  The “Rate Commitment Fee” is close to the amount I would spend on refinancing my mortgage if I decided to go with another bank…  Other banks are more than 1/2 a percent lower than Green Stone.  So…

If rates go up in a year, I can use the money I didn’t spend on the “Rate Commitment Fee” to pay closing costs to another bank to get a mortgage at a lower rate…  Even if they don’t go up, I may still want to do that…  I’ll do that math when the time comes.

Mid-April update


Posted on April 13, 2014 by


According to my Gantt chart, Monday (24 hours from now) was supposed to be the first day of construction. Actually, we are still waiting on the “appraisal” portion of our construction loan. So far, every delay has really just been an opportunity for us to save up a little more money and learn a little bit more, so I have relaxed about it. I also see that the prime interest rate has been dropping all month. Since we are not in a panic about building, we can relax with family over next weekend’s Easter holiday (although I do still plan to talk to my uncle about what sort of MAG welder I should buy).

On the other hand…  I don’t want to start too late.  Winter is coming around again and I need to be closed in properly or the work will be interrupted and the scheduled and costs will increase.

When we dropped off the appraisal paperwork (over a week ago now), I left feeling like I was on the edge of a cliff.  I would describe it as a cross between cold feet (pre-wedding jitters, which I did not actually experience with my own wedding) and that feeling people must get just before enlisting in the military.  I was about to bet a lot of money on my self…  On skills I am planning on developing… On an idea that I know is a little bit crazy.   On something that will require a tremendous amount of effort.  On a long term commitment.  On a change in lifestyle.  Pretty scary stuff.

Over the week, I have both calmed down and geared up.  I am ready to go.  We could hear news about the appraisal this week.  I could get rolling the day after Easter.  And that is why I am having trouble sleeping and I am typing this at 5:30 AM on Sunday morning.

Behind the Drywall Tour

Since we didn’t have anything major going on this weekend, I took a few hours with my wife and went on a “Behind the Drywall” tour.  The company conducting the tours is known for making very high-quality energy-efficient homes, oftne using “Earth Tubes” and other interesting systems.  The “Behind the Drywall” tours let you get a look at these systems before they get covered up.  This particular home had a green roof with interior roof drains that lead to a complex system of “rain gardens” on the sloping site. It had geothermal heating with radiant floors, an ERV connected to carefully designed duct work, several different types of insulation and a belt-and-suspenders approach to water proofing. I was hoping for some extra inspiration, maybe a good idea or two, and at the very least, a nice walk with my wife before things got crazy (we left the kids with my mother-in-law, so they were happy too).

A previous tour featured specially designed plastic gel packs suspended between the wooden wall studs as a thermal mass (sounds expensive compared to concrete construction).


I was reminded how many little bits are needed to build a wood framed home (especially one with an interesting layout and some steel beams).  So many little blocks were cut to make things fit and that made me feel better about my relatively simple build plan.  Understanding everything I was seeing also made me feel more confident about my own build.  Sherri also asked a couple great questions, so I know she is feeling pretty knowledgeable and confident also.  Sherri pointed out that our home would be much more exciting and efficient and tour worthy…

Eye Candy

That’s enough for now, on to the eye candy.