Sorry for the unexpected hiatus

Real life has been a royal pain and rather depressing. I will be posting regularly beginning tonight.

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Things on my mind lately

  • Whoa, I come back from vacation and find I have feed subscribers! Hello to both of you!
  • Wondering how it is possible to spend 7k on bingo in a year. There’s definitely a post coming on this one.
  • Life insurance
  • Refi postmortem
  • Mid-year goals assessments
  • Estimating expenses for next year’s vacation(s)

Pay PMI Out of Pocket or Roll It Into the Loan?

We have decided to refinance our mortgage to a 5.875% 30 year fixed. We currently have 80/20 mortgages, which probably wasn’t the wisest choice in retrospec. C’est la vie. Our 80 mortgage is 30 year fixed at 6.375%; however, our 20 mortgage is 15 year balloon amortized over 30 years at 10.25% because we wanted a fixed rate. We have been in our house for 2.5 years and live in an area of the country unaffected by the housing bubble property value-wise, so our house has appreciated about 4.5%. Clearly we don’t have a lot of equity in our home, so we are required to have PMI.

For those that don’t know what PMI is Private Mortgage Insurance. It’s required for those that have less than a 20% down payment to protect the lender against a default. In our case PMI will be approximately $2800. If we were to pay it out of pocket, we would take it from our emergency fund even though this obviously isn’t an emergency. I admit this probably is not a good idea.

I used this fantastic home mortgage template from Vertex42 to look at the interest after 80% LTV, using a 2.5% rate of appreciation, is achieved and the monthly principle and interest payment for each scenario. I am looking at the LTV because you can stop paying PMI once you achieve an 80% LTV.

For paying the PMI out of pocket:

  • it would take 8 years to achieve an 80% LTV resulting in $85.7k in interest
  • the monthly P&I payment would be $1136

For rolling the PMI into the loan:

  • it would take 9 years to achieve an 80% LTV resulting in $95.8k in interest
  • the monthly P&I payment would be $1147

Based on this information the P&I monthly payment isn’t worth raiding our eFund. However, after the eFund is fully funded, I think we’ll consider making addition principle payments.

Things on my mind today

  • Is a million enough anymore? Should we all be aiming to be deca-millionaires? – First impression is no and yes. Might do a post with actual numbers.
  • Gas-saving tires – First impression is buying smaller wheels and tires would probably be safer.
  • Refinancing the mortgage – It’s on. Now thinking about paying the PMI out of pocket instead of rolling it into the loan.
  • Prioritizing our budget items – I’ve decided to take my own advice ;oP Plus I found some expenses we should account for on a monthly basis.
  • Re-estimating our emergency fund goal – It’ll be increasing due to the expenses I haven’t been taking into account.
  • Mid-year annual goal review – Yeah, gotta get on it.
  • A blog title – My current title is kinda lame.

Thrifty Thursday: Amazon Subscriptions

Each Thursday I’ll be highlighting some new thriftiness I have found. This week’s topic is the Subscribe & Save beta program at Amazon.com.

For certain products you have the option of signing up to receive the product either every 1, 2, 3 or 6 months with free shipping and a 15% discount. You can cancel without penalty at any time. The product categories are:

  • Baby & Child Care
  • Food & Snacks
  • Health & Wellness
  • Household Supplies
  • Personal Care & Beauty
  • Pet Supplies

Personally I have found the best savings to be on vitamins, since many of the supplements come in multiple packs. I think the worst “savings” are in the common items like laundry detergent and toilet tissues. While it’s true prices are going up many commenters and I think local stores would be cheaper. It’s almost time for my six month household supplies run, so I will be paying particular attention to confirm my suspicions.

The bottom line is even with higher prices on many of the common household items Subscribe & Save may still be a worthwhile alternative for super busy people or for people who don’t want to drive due to sky high gas prices.

US Postage Rates Increase Next Week

Here are the highlights for regular mailings effective May 12, 2008:

First-Class Mail letter (1 oz.) $0.42

First-Class Mail letter (2 oz.) $0.59

Postcard $0.27

First-Class Mail large envelope (2 oz.) $1.00

Certified Mail $2.70

First-Class Mail International to Canada and Mexico (1 oz.) $0.72

First-Class Mail International to all other countries (1 oz.) $0.94

See here for other shipping rate increases. Be prepared for more increases if we get the inflation bug. The USPS announced plans to tie stamp rates to inflation last year.

On the Career Front

Hm, I have just been asked to take on an additional role as a training instructor. A little background on my career. I am a business analyst, which means I write software requirements for business and development domains, and a consultant, which means I work for a company that places me inside an external company for specific project.

I am currently on assignment, so this training instructor role would be in addition to my current full time project. The class I would teach is on the software testing discipline, about which I know a little bit but have no hands on experience, so of course I said yes ;ob Thankfully I won’t have to create any training materials; I just need to get up to speed on the methodology this company uses and observe a few classes before the current instructor roles onto her next gig.

I’m excited! This ties in nicely with my “go the extra mile” goal and will demonstrate my time management skills between full time project work, on-going certification study, and now teaching. All of this should help me achieve one of my 2009 goals.