The Crying Game, back to school, and those rates just keep dropping

August 25, 2010

 

Animal Quote of the Day: “A dog is the only thing on earth that loves you more than you love yourself.” – Josh Billings.

Mortgage 101: A lot of people get excited to skip a mortgage payment when they refinance, but in reality you are paying it when you close. When you were a renter and gave your landlord a check on August 1st, it covered the whole month of August. Mortgages are just the reverse as they are paid in arrears; so when you paid your August 1st mortgage that covered the whole month of July. If you were to close on a refinance today you would pay the first 25 days of August to your old bank (and 6 days of interest to the new bank) at the closing because your September payment would have covered this month. After the closing you would skip the September payment. Your first payment would be due on October 1st which would cover the month of September. Got it? Good. Pop quiz tomorrow. (FYI – in college my roommate Ponch and I applied this theory to our rent as we skipped many months of payments and just pretended we were refinancing every month.)

Interest Rate Update: I was a little sad seeing Cubs manager Lou Piniella break down and cry at his last game. Perhaps he was reminiscing back to 2003 when rates were at historic lows and then in one May day they shot up over a point. I cried that day too as I was waiting for a little more of a drop to refinance my home. If you are looking to buy or refinance a home, my suggestion is don’t get caught crying because this party of low rates will end one day and take seven years to come back down. A 30yr fixed is in the mid-5s give or take, and ARMS about a point lower. Be the hero of your office: let everyone know that for loans over 240k I will waive every single fee!

Animal Quote of the Day 2: “Marge, don’t discourage the boy. Weaseling out of things is important to learn. It’s what separates us from the animals…except the weasel.” – Homer Simpson

Timeout for Trivia: I hope you all had a stress-free week from my trivia questions, but all good things must come to an end! I’m back from vacation and have decided to hit you with a tough one. So here we go; just email me the answer to this week’s Who Am I? question and be entered into a drawing to win a really cool prize. Good luck: “On Friday I turn 58 but I feel like a kid. In my early days I was in a comedy troupe with the late great Phil Hartman. He was the one who developed a lot of my humor and also helped co-write my biggest movie in ’85. My movie career dried up when I was arrested in Florida, and only the people in that theater know if my nickname is earned or not.”

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