What I Wish I Did Before I Got a Mortgage, Pt. 1

The most important thing I didn't do properly was to remember that I get paid twice a month. I was budgeting my income on a monthly basis, which works out great when you don't have a mortgage, but badly, when mortgage goes right out your bank account the second it goes in there from your company.

This month is the first month I paid my mortgage (the first real month is paid for in closing costs), and so I'm realizing that too much of my cash is going out the door in the first week of the month, and almost nothing in the last week of the month. This will cause a 2-3 week period where credit cards can not be fully paid off, since I don't actually have the cash to do so.

What I should have done was to call my credit card companies and change all my due dates to the second half of the month. That way, cash outflows are not so front-loaded in a month.

Most credit card companies will allow you to make a due date change every 6 to 12 months, but you'll only need it once.

Long time

Time to catch up. Big NEWS!

On contract for a house, closing July 31st. Going to set me back about $210K and I've been scrambling to get inspections, mortgages, and lawyers.

Recent economic improvement and then subsequent further news about declines has been wrecking havoc with mortgage rates.

When I started looking, 30-yr mortgage rates were around 5.00% and then started to creep up to 5.6%. In the last week, the rates are starting drop and come down to around 5.4%. Hopefully within 1-2 weeks, I can lock in right around 5.00% again.

That's it for now. Be back tomorrow with some thoughts on the economy.

Time to Buy a House

I have been contemplating a house purchase for a while now. I know I'm going to be in the area for at least 3 more years, and the housing market looks like its at or near the bottom.

Last week, the Fed's move to pump more money into mortgages and to back the purchase of "Toxic" mortgage backed securities sent mortgages rates down significantly.

As you can see from the chart, interest rates have been steadily falling, and I believe its at its lowest possible point.

On top of of that, there is still a $8K credit from the IRS.

I think its time to help out the economy, save myself some taxes, and save on rent payments that don't build nay equity.

Housing Update

Checked out my buying power today. My calculation was right on. Turns out I might actually be able to afford an apartment around here. Please read here for my last comments about mortgages. One of the most interesting things I learned about today are 3/1 and 5/1 ARMs. ARMs are normal adjustable rate mortgages, changing as rates change. 3/1s and 5/1s are fixed mortgages for the first 3 or 5 years and then adjustable annually after that.

These are a great deal for me, and others like me, because more likely than not, I will be moving within 3-5 years. These loans tend to be lower rates, because companies have to worry less about the interest rate environment turning against them.