Tuesday, April 7, 2009

Pad Lock

One day you see me the next day I'm gone
Don't fight me baby I don't want to hold on
--Madonna

After watching 10 yr yields continue to tick higher, I went ahead and locked in my mortgage rate yesterday. The 15 yr fixed rate is 4 5/8%.

Initially, I wanted to finance about 50% of the price but am going to do 60% because: a) borrowing costs are lower than I forecast when entering this project, b) a lower down payment frees up cash for home improvements (this house will need some soon), c) I can always chunk the mortgage down on my own.

The thing about leverage is that it is intoxicating--especially when credit is cheap--and it tempts you to over extend. I want to intelligently employ leverage early in my 'relationship' with this house while working to reign it in as quickly as possible.

As such, I plan to do double mortgage payments right out of the gate. Hopefully, I can toss in a lump sum paydown at least once per year as well. God willing, I hope to pay this puppy off by September 2013 (about 4 1/2 yrs).
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3 comments:

OSR said...

You're a bad influence. I zeroed out my speculative options trading account options and bought some metal with the profits. (I'm kidding about the bad influence part, I'd been thinking about this move for awhile.)

What's with the oddball refiners that I'm seeing at Apmex and Kitco, like Sunny's? They aren't CMX approved, are they?

April 7, 2009 at 5:21 PM
fordmw said...

Not sure. I do know that scope of CMX approval extends far beyond the mainstream 'brands.' Check out some of the names on GLD, SLV holdings.

Also, tight physical supply especially in smaller denominations prolly has some dealers stretching.

I plan to add to metal stock over time. Nothing crazy, but something each quarter. Insurance + hand-me-down wealth. If gold does happen to shrink to $600 then I'll get more aggressive.

April 8, 2009 at 9:25 AM
OSR said...

I'm trying not be aggressive in anything right now so I can focus on long term strategies and expectations. Trading/speculating can be rewarding, but it becomes all consuming.

Thanks for the heads up about metals, I've bought physical gold before, never in a supply constrained market like this.

April 8, 2009 at 4:38 PM

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