refinancing my home loan

I started monitoring the mortgage rates the end of last year because of the feds economic recovery efforts. The confirm loan rate moved lower very quickly but the jumbo loan never budgeted.

My current loan is from Wells Fargo. It's an excellent program.
- 30 year fixed jumbo at 6.25%
- 10 yrs interest only period
- 0 points

Working as a self-employed consultant at the time, the little extra flexibility is nice. Although I have always paid the principle as if it as a regular 30 year fixed loan.

Here is my criteria of refinance.
1) 30 yr fixed jumbo loan
2) .75 or higher LTV
3) less than 1 year for refi fee payback.
4) new monthly payment should be about the same as my current interest rate.

All these condition basically works out that my new interest rate must be at least 1% lower and less then 1.25 of combined point and fees. The LTV ratio is also very important because the falling house valuation. Anything loan below .75 LTV would require additional cash from me. I knew this the area of highest risk so I saved aggressively.

Here is the break down on the new loan. I am refinancing my home loan at Pen Fed credit union. I was referred to them from another blogger Adam Nash : Refinancing? Try Pentagon Federal Credit Union (PFCU).

1) 30 yr fixed jumbo loan
2) 4.875% interest rate
3) 1% origination fee, 0 points
4) .70 LTV
5) 13 month refi fee payback

As soon as I saw the new PenFed rate, I knew the moment has finally come. It's not everything that I wanted. I submitted my application this morning. Let's see if I get approved and the result of house appraisal valuation.

The important lesson for me here is that I worked with the end in mind. I defined my target as clearly as possible. My goal was not to find the lowest possible interest and try to guess how the market will move from week to week. It was a set of clear and measurable conditions. And I didn't lock myself into those condition. I stayed flexible and considered some possible alternatives.

The mental and numeric preparation is the key. In life, you never know when the right condition will come along. You have to do all the preparation in advance. Define the target conditions, know which conditions are flexible and which are fixed. Set aside the necessary resources. Then patiently wait and jump on the opportunities quickly. No need to doubt or second guess. The decision to apply for the loan was made almost a year ago. I only spend about 30 minutes to refresh my memory and double check my math one last time before I pulled the trigger. I'm confident that I have made the right decision. (Of course, it's really hard to see the down side to 4.875% for a 30 yr loan jumbo. )

Living with Purpose and Passion

One of my favorite blog site recently posted "Defining success". I thought it was a really interesting question and posted the follow response..

It just as helpful to define failure and/or what success is not... I think for some people that is a lot easier because we all have a very strong emotional response to the fear of failure. Where as the positive happiness seems to be much more elusive.

Failure is when I stop listening or seeking good ideas
Failure is when I worry about being right for other people
Failure is when I don't care.
Failure is when I care more about the end result then doing something I believe in.
Success is not a goal and it's not the achievement.
Success is not a process.
Success is not about being right.

Success is the mental and emotional engagement to the attempt to reach the goal. Success is being passionate about trying to reach that goal. I can completely fail to reach the goal and still feel that I succeed. I'm rarely bothered by the fear of failure as long as I'm mentally and emotionally engaged. I can be wrong and I'm wrong often. I'll acknowledge the wrong and try to make it right. I don't need to wait until the end some long process to measure my success. Every night, I can ask myself did I have a successful day. Every moment I can ask myself is the choice I'm making now a successfully one.

I want live a purposeful life (measured by goals and achievements). And I want to live a passionate life (measured by success vs failure). When someone can find a way merge the two, I believe he/she will be on the road to happiness.

when do i get a bail out?

Here is the latest of government bail out for the auto industry.
http://www.cars.gov/ Car Allowance Rebate System, where people can get trade-in value of $3500 or $4500 for a new car (leased or purchase) when they junk a old fuel inefficient car.

My Honda Accord is now 15yrs old. I figure is finally my chance to get some government bailout money. Turns out, my car is too efficient, I don't qualify. Yet Again.

I should be happy. I have a job, good mortgage, made conservative investment choices, bought a fuel efficient car. However, every time there is a bailout and i don't qualify because I haven't demonstrate sufficient need, it just makes me mad. Oh well... this is why we have a "progressive democracy". We take money from people who have it now and people who will have it in the future to help people who need it now.

This makes me think.. how am I going to treat my children financially?
Am I going to be fair and treat them the same way? Or am I going to be equitable and treat them different depending on the level of need?

must read.. why education matters more than ever.

Education and technology: Supply, demand, and income inequality

street zip lookup

Here is an useful service that I discovered today. http://www.melissadata.com/lookups/zipstreet.asp
The service retrieves the list of streets and street addresses for a given zip code.

So how is this useful? When new vendors or clients gives me incomplete or unreadable addresses, or I didn't catch the complete address over the cellphone / answering machine. It's usually pretty easy to get zip code, but the street name might be misspelled. I can verify mailing address via www.usps.com. The problem is when the address look up fails, I had no way to browse similar addresses to see which one might be a match. With this service, it's easy to browse through a list of valid street names for the zip code.

529 college saving accounts

I have been meaning to research and open a 529 college saving account for the last 3 years. I'm finally going to get serious. I suppose I "lucked out" because I bypassed the big stock drop last year.

My plan is invest as much as possible as early as possible. The tax benefit of Ruth IRA and 529 account is exactly the same. I'm going to redirect my Ruth IRA contribution to the 529 account. Then switch back once I have a decent 529 balance.

Now the only question is which fund family / state plan do I want to invest. If you have a 529 account, would you share with me what you like about your particular plan?

visual guide to the financial crisis

Wonder how the financial crisis got to our current sad sad state? Wonder no more! Here is a visual "flow chart" that walk-through and summarize the events.

http://flowingdata.com/2008/11/25/visual-guide-to-the-financial-crisis/

In short.. Never under estimate the power of "GREED". History has show over and over again, as long as here is human capacity for greed, we'll continue to have financial bubble that leads to a major crisis.