Welcome to Saving Money with Andrew!
This week, I wanted to pay tribute to an underrated skill…reading the fine print. Fine print is very boring, but every once in a while you find something that makes all the time worthwhile. My wife recently said, “there are two types of people in the world: people who gladly read the fine print and people who will do anything to avoid it.” She falls in the latter group and if you do too, that’s okay! But here are two good examples below of some great savings you can find in the fine print:
Credit Card Benefits
Even if you’re a fine-print hater, it’s worth the time to read your credit card benefits, either online or in the booklet included when you first received your card. Almost every card offers some set of perks, and these perks are often extremely generous.
For example, the Amazon Prime Rewards Visa Signature card (my card of choice for Amazon spending) offers several perks, my favorite of which is Extended Warranty Protection, which extends the length of most warranties by an additional year.[1]
I have now used this perk three times, twice for expensive (and broken) smartphones with expired warranties. Each time, I only had to fill out some fairly simple paperwork, and in each case reimbursement (for repair or replacement) came quickly, saving us over $1000 in total. Many credit cards provide similar benefits, so check with your credit card company for more info.
Last-Minute Mortgage Rate Buydowns
With our home closing a week away, almost everything is ready. And thanks to reading the fine print, we were able to lock in an even lower mortgage rate on our 30 year fixed-rate mortgage. Normally, a rate lock agreement “locks in” the rate on your fixed-rate mortgage through closing, with no ability to obtain a lower rate if interest rates decline.
But, in the fine print of our rate lock agreement there is a provision that allows a one-time buydown of the rate for a deeply discounted price (0.75 points for a 0.25% rate decrease) if interest rates decline at any point before closing. I set a calendar reminder to check rates each day, rates recently fell a quarter-percent, and I immediately contacted our credit union and locked in a 0.25% rate reduction on our mortgage, which will save us tens of thousands of dollars over the course of our mortgage, net of the cost of the buydown.[2] If you’ve recently locked in an interest rate on a mortgage and are waiting to close, make sure to review your rate lock agreement to see if you have a last-minute buydown opportunity.
And now…Andrew’s pick of the week:
Similar to last week’s pick of My Octopus Teacher, this week’s pick is another great show that provides a welcome diversion from the pandemic and political conflict. All Creatures Great & Small is a well-done, relaxing adaptation of James Herriot’s series of short stories about the adventures of a small-town veterinarian. The first two episodes are free, and we’ve watched the rest using PBS’s fantastic on-demand service, which you can access by donating as little as $5/month to PBS. Enjoy!
I hope this has been helpful. If you liked it, please share it on social media! Also, please send me your feedback, requests, and success stories.
[1] As discussed in prior posts, I’m not compensated for anything you sign up for from this post (and I don’t make money from this newsletter). I’m just using this card as an example since it’s the credit card I use for Amazon.
[2] I’m normally opposed to paying points to reduce your mortgage rate, as discussed in this post, as the cost is often too high relative to the savings over time. But a 0.75 point fee (a one-time payment of 0.75% of the loan balance) to reduce the annual rate by 0.25% is a no-brainer. The loan officer I spoke to said he’s shocked people don’t do this more often.