Posts Tagged ‘mortgage’

Put Your Money Where Your PMI Is


For most first-time homeowners, private mortgage insurance (PMI) is a necessary evil. It really doesn’t do a thing for you except allow you to own a home without putting down 20% of the cost up-front. The insurance is actually for the lender in case you bail on them.

Being the frugal fella you are, you have spare cash each month and you need to decide what to do with it. You probably have several options: pay down the mortgage, pay down student loans, invest in a retirement account, pay off credit card debt (credit card debt? but you’re a frugal fella, right?), or put it under a mattress. Whether you’re earning interest or paying interest, these can still be compared to find the most qualified suitor for your cash. Let’s take a look at some numbers, however accurate they may be, for each of these sinkholes:

  • Pay down the mortgage: 5% (mortgage interest rate)
  • Pay down student loans: 4% (student loan interest rate)
  • Invest in a retirement account: 9% (rate of return)
  • Pay off credit card debt: 12% (credit card interest rate)
  • Put it under a mattress: 0% (rate of return)

Now, if you subscribe to the idea that you should put your extra cash in the one with the highest rate, this would lead you to believe you should pay down the credit card. Most people would stop there. Continue reading »

First-time Home Buying Tips


Buying a home can be stressful.  Buying your first home can be even more so.  You may not know where you start.  You may not understand all the lingo.  You may not be able to differentiate between marketing ploys and practical procedures.  You may not know what you’re looking for in a house or where you’d like to start your search.  You may not know how much you can afford.  As a recent first-time home buyer myself, I ran into a lot of the same issues.  Having learned a great deal through my experience, I’ll offer what I can to other first-time home buyers: Continue reading »

The Bailout Blame Game


Unless you’ve lived under a rock over the last year, you’ve heard our economy is in a heap of trouble mainly due to mortgages our country’s homebuyers can’t pay for.  And if you actually have lived under a rock, I salute you for not being part of the problem.

So who’s to blame?  Oh, there’s plenty to go around alright. Jimmy Carter? Ronald Reagan? Bill Clinton? George Bush? Franklin Raines? Jamie Gorelick? Chris Dodd? Barney Frank? Phil Graham?  The plethora of banks?  Wall street?  Predatory lendors?

Let me share a reader’s comment I found online while reading Bankruptcy, not Bailout, is the Right Answer that I believe encompasses the mindset of many American citizens:

Continue reading »