Question - I contracted with a local builder to build my current home in South Carolina in 1988. Last year, my roof began to leak in multiple places. After having five local roofing companies come by to give bids on roof replacement, I was advised by ALL of them that the architectural shingles are improperly placed. They each say this is why the 25-year shingles must be replaced. I have signed a contract for replacement at a cost of $6,000.00.

Does my builder have any responsibility for the defective work of the subcontractors on this project? - Barbara Thames

Answer - Based on your letter and the representation that five other roofing company representatives have said that your shingles were improperly installed, your builder has an ethical, professional and legal responsibility to replace and install new shingles. Contact your builder to discuss your problem and replacement of the shingles before you have anyone else do the work.

If your builder doesn't accept the responsibility for the work of their subcontractors and act quickly to correct the roofing problem, contact your attorney and file an action to recover your costs and any losses for damage that have resulted from the substandard workmanship. If your attorney is unable to obtain the builder's cooperation you may then proceed to replace your shingles.

Question - We recently sold our house in Kentucky. We have incurred $25,000 in home equity to cover the sale of the house. We have about $150,000 equity in our new home. Can you tell me if it would make sense to get a second mortgage and add the $25,000 to our mortgage. I hate the thought of paying this off as it will take at least two years. I plan on living here for five to seven more years. I have a five-year adjustable-rate mortgage at 5.8 percent. - Taefld

Answer - The term home equity loan is just another name for a second mortgage. The only reason for refinancing is to obtain a lower interest rate that will result in a lower monthly mortgage payment.

When considering the decision to refinance any mortgage, a homeowner must compare the cost of refinancing with the reduction in their monthly payment. Divide the cost of refinancing by the savings (current mortgage payment less new mortgage payment); the answer is the number of months a person must live in their current home to recover their refinancing costs. Each month thereafter results in savings due to the new lower interest rate.

Please note that to make a meaningful analysis the payment for the new loan should be based on a loan equal to the current mortgage balance amortized over the same number months necessary to pay off the old loan. Any mortgage loan officer can make the calculation and they will gladly do so without cost.