Yearly Archives: 2009

Are You Thinking About Refinancing Your Mortgage? You Should Be…

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Have you been thinking about refinancing?

The mortgage rates are still very low right now, but starting to rise again.  Check out bankrate.com and other online mortgage rate services for the most recent rates!  In November, inflation started to increase, and that means that the Feds will be looking hard at whether to raise rates again!  Unemployment is still high, so they might hold off for a little longer.  But do you want to take that gamble?  If I didn’t have my mortgage load practically paid off, I would be looking “high and low” for a good deal on refinancing my loan!

If I were to refinance today, who would I want to refinance with?

Wells Fargo!  They are the only company that I refinanced with for the duration of my mortgage!  Actually they shipped me a document in the mail that offered to refinance my mortgage.  I asked people I work with about Wells, and they said that Wells Fargo is an excellent company based in California.  Uneasily, I bite on the bait left by Wells, and was pleasantly surprised with them!  I got a competitive rate, 4.875% for 15 years and no closing cost!  I couldn’t believe it!  I had excellent credit, and I’m sure that was a big part of it, but still… NO CLOSING COST!

 

I don’t know if Wells Fargo still offers that offer today (actually I don’t know how the proposal got to me in the first place), but I’ve been extremely happy with it.  Wells Fargo has an excellent reputation!  It’s one of the few banks (other than Goldman Sachs), that Warren Buffett owns (and he doesn’t hold poorly managed companies).

Before you consider refinancing, make sure the following are true:

  • You’re going to stay in your home for at least 5 years
  • If you refinance, you don’t have to pay PMI (since the value of many homes has decreased, the amount of equity you have in your home might be less that 20%).  This happen to a buddy of mine, he went in to refinance has mortgage, but the reappraised value of his home had than 20% equity in it.  They said they would have to charge him PMI, so he ended up passing on getting his house refinanced.
  • You’ll need to make sure it makes sense financially.  I’m a number cruncher, so I use excel or Openoffice Calc.  If you search online, you can probably find an online app that will do the hard part for you: like the one at www.dinkytown.com click here for a good refinance calculator

Below are additional things I would consider:

  • Which type do you want a Fixed or ARM mortgage?  I prefer a Fixed Mortgage!
  • Look at other term mortgage, such as 20, 15 and 10 year mortgages.  You can also go the other way 35 and 40 year la
  • Make sure you can make extra payment against the principle, and how to do that (ask!)

If you do decide to refinance, I wish you the best of luck!  It worked out really well for me.  I went from a 30 year mortgage down to a 15 year mortgage.  I then made extra payments, so that I’ll have the mortgage paid off in 11 years since I initially took the first loan out.

How I Have Lost Over Half A Million Dollars Having Kids, So Far!

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Since my son has been born, We have lost over half a million dollars in income!

How? 

My wife stopped working to be a stay-at-home mom, the day my son was born.

In her previous work life (before my son was born), my wife was an accountant.  Below is her calculated income based off of the last salary she received before becoming a stay-at-home mom.

Wages and
Year Bonuses
2000 40,000
2001 42,000
2002 44,100
2003 46,305
2004 48,620
2005 51,051
2006 53,604
2007 56,284
2008 59,098
2009 62,053
$503,115.70

I added a 5% standard of living increases for every year after the first year.  I really think she would have made more that the amounts that I have here, but this gets my point across.

We never projected out our future income loss, but as you can see it’s quite substancial (Augh).   With my wife’s former income steam, we could have be living an “Upper Middle” class lifestyle by now.  Vacationing in Paris for Christmas, owning new low-end luxury cars and maybe even a vacation home in the South…  we could have been really living it up

So, the question is, would we change anything if we had it to do over again?  Hmmm maybe! (initially I was going to say no, but half a million dollars is a lot of money).  I think given the choice, I’d at least ask her to continue to work part-time.

Why would I ask that of her?

  • Half a million dollars is a lot of money!
  • It would be nice to have a little bit of security, in case I were to get laid off
  • Half a million dollars is a lot of money!!
  • The kids would learn that everybody has to go to work to earn a living
  • Half a million dollars is a lot of money!!!
  • We would be able to increase our lifestyle, at least alittle bit.
  • Half a million dollars is a lot of money!!!!
  • The extra money could be a huge emergency saving fund
  • Half a million dollars is a lot of money…, really!!!!!!
  • The extra money could have been used to fully seed the kids College funds. (I’m fighting the savings battle with it right now).

All told though, I really do like the fact that the kids have a  mom that is there for them anytime… but, half a million dollars is a lot of money!!!!!

What would you do?  Live better and larger (at least a little), or forgo the money and be a stay-at-home mom?

Disney Magic, Watching Classic Disney Cartoons

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Since our Disneyland vacation (this past November), my daughter (and to a lesser extent my son) have been wanting to watch some of the old Disney cartoons.

classic Donald Duck

 

 

So, first, I googled “Donald Duck”, then click on the video tab.  It was pretty cool, we instantly got to watch a classic Disney cartoon called ‘Apple Core” (Chip and Dale was in it too).  Next I googled “Steamboat Willie”, believing this was the first Mickey Mouse cartoon.  The kids loved it!  Then I found an even earlier Mickey Mouse cartoon call “Plane Crazy”.  Notice how pencil thin Mickey’s legs are in the “Plane Crazy” video!  Did you also notice how mischievous Mickey is in this particular cartoon.  This is definitely not the Mickey Mouse I grew up knowing!  When he was forcing Minnie to kiss him…, well no wonder Walt Disney didn’t want this representation of Mickey Mouse to be Disney’s first rendition of Mickey Mouse…

 

You might ask what started this sudden interesting in the classic Disney (by their timeframe) cartoons?

Well first, this past November, we stayed at the “New Orleans Riverside” resort.  While we were waiting in the lobby, there was a television with a bunch of little chairs around it for the kids.  Both of my kids went over and watch it for at least 15 minutes while my wife and I stood in line.  Next, the Disney merchandise has a lot of picture of the cartoons in their earlier classic version.  I actually prefer the older version of Donald Duck (just by a little bit though) vs. the newer ones.  And finally, we stopped at a Disney restaurant (a sport themed one), where they played old black and white cartoons (with no sound) on a huge TV.

As an alertnative to watching the videos on YouTube, try borrowing Disney videos from your local library (Looney Tunes too for that matter, but that a different topic all together).

No 401K 2010 Conversion to a Roth IRA for Me

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I was hoping in 2010 that I could roll my entire 401k balance over to a traditional IRA, and then from there do another rollover to a ROTH IRA.

The advantage of doing it in 2010, is that you can spread the contribution amount over multiple years (3 to be exact) to reduce the tax hit.

So for the first step.)  I was wondering if I could roll over my 401K balance to a tradition IRA while I am still employed at my company where my 401k resides?

Why did I want do this process in 2010 instead of now or earlier?

If I were to do the conversion in an earlier year (let’s say 2009), the tax hit would be too high, because it would bump me up to a higher Marginal Tax rate (actually a few higher)…  And I hate to pay more taxes that I have to.

Sad day for me…  Oh well, 😐