My wife and I got our house in Austin, TX right after the market collapsed in 2007.  We had a motivated seller, who was building a house on a golf course and was hemorrhaging money thanks to double mortgage payments.  We put in about $10,000 in remodeling, and the house supposedly maintained its value of around $200,000 due to Austin’s relative lack of participation in the country’s obsession with flipping houses.  Our rate is 6.625% fixed through Bank of America.

So …

Can we get a better deal on our mortgage if focusing solely on the monthly payment?

First off, I am a long-term dollar bear just like Peter Schiff, Jim Rogers, Marc Faber, and a few other “pessimism porn” peddlers.  I have lived through the hyperinflation of 92-94 in Ukraine,  know what it’s like, and convinced that the United States is well on its way to a similar fate.  Therefore, I want to do everything possible to pay as little as I can right now (without getting into scary adjustable rate mortgages) because in the future I can be paying the house off with much cheaper dollars.  Very much cheaper.

In fact, if the inflation is just 5% a year, it would make a hypothetical $1,200 monthly payment be half as painful to disburse out of your checking account in just 12 years (provided the paycheck keeps up).  In another 12 years, $1,200 will have the purchasing power of $300.  If you decide to pay the house off faster at that point, you can make quadruple payments for the last 6 years for the price of the original payment in terms of purchasing power.  And the inflation is picking up, make no mistake about it.

Second, during periods of inflation, assets and commodities start to take up more and more of your hard-earned money, while rents and housing expenses – less and less.  For example, during the insanity of Weimar Republic’s hyperinflation, food went from costing about 20-30% of an average paycheck to 99%, while rents fell to 1%.  This doesn’t quite apply to us because rather than renting, we bought … I’m sure Peter Schiff would have something to say about that, but we’re very happy with our home.

It’s no surprise that I started looking at refinancing our mortgage … I figured, locking in the best possible rate right now, and taking advantage of coming inflation is a very prudent thing to do.

My first step was taking to the bank.  That fell through because we’re short of the 20% equity stake they needed us to have … after all, it’s all interest we’re paying now.  On top of that, because of the terms of our mortgage, they paid our closing costs and PMI, so we can’t do much until we’re the proud owners of a fifth of our home.  I’ll take the fifth with nice furniture and the Wii, thank you very much.

Then, I talked with some friends who were in the business.  That got kind of awkward quickly because if they couldn’t beat someone else’s offer, I had to deal with refusing their offer gently.

Finally, I just went online.  I tried Lending Tree, but their system matched me with so many renegade mortgage flippers that I got inundated with phone calls from “Bob’s Corner BBQ amd Mortgage Refinancing”.  Screw that, so I went to Quicken Loans to start by checking mortgage rates.  At least their site wasn’t a maze of rate wizards and a clusterf&*k of pop-ups.  You get quick current rates, an 800 number at the top, and a promise to cut your mortgage payment.

According to them, if we refinanced at 4.75%, which is almost a 2% drop in our rate, we’d save about $500 a month on a 30-year fixed.  However, I thought it was funny that they still offered 5-year adjustable refinancing, although they did do the responsible thing and posted the info about future adjustments, which have a lifetime cap of 5% (not bad).

I dialed the 800 number, pressed “2″ for the refinance option, and spoke with a rep within a minute.  He explained that Quicken Loans is a direct lender, which means that they flip 100% of their mortgages … though it makes me cringe from a prudent person’s point of view, it’s the economic reality of our times.  I would feel much better if the relationship with my banker was such that he treated the mortgage as an investment vehicle for his bank, not a “buy low, sell high” commodity.

He took my info and promised to get back with me.  I am hoping we can get all costs rolled into a new loan with a 1.5-2 point drop in the rate.  I certainly don’t want to miss the opportunity of locking in a low rate before another Paul Volcker comes in and jacks up the rates to 20%.

I’ll keep y’all posted on how everything goes — laters.

When I wrote about silver last year, silver bullion was around $12-15 per ounce, and you could still find some amazing deals with prices hovering around $10.  If you follow Kitco, you know that silver is around $20 per ounce, and gold has broken through $1,200 per ounce.

I believe this is part of a long trend of world currencies being inflated at the same time.  However, sooner or later winners and losers will emerge.  I believe that the US dollar will be the biggest loser of them all, followed by countries that peg to it.

We are starting to see inflation in the stock markets, healthcare costs, education costs, with food/energy soon to follow.  I think that we’re setting up for a big flight to safety as precious metals climb the wall of worry.

I have already made unrealized gains on my physical gold/silver investments, but I am buying more.  I strongly urge you to allocate some of your cash to precious metals now — not only will you protect your liquid assets against Fed’s obscene actions, it will be a fantastic disaster recovery item in case something cataclysmic happens.

This may be a no-brainer for some of y’all out there, but my wife and I finally got individual checking accounts. No worries, marriage is going well … I just got tired of parsing through a bunch of ~$1.31 transactions for small stuff we put on debit. On top of that, I was stupid enough to sign up for “Saved The Change” or whatever roundup matching program the Bank of America is doing. Consequentially, I am now buried in dozens or really small amount transactions, and the big (important) ones get visually buried once posted.

We opened two individual checking accounts, routed equal percentages of our paychecks to them, and voila!

(1) No more garbage in the main expense account
(2) No more spying on who’s buying what
(3) Ability to plan individually and purchase personal big-ticket items
(4) Ability to audit the main account in seconds

I strongly recommend.

I finally decided to contribute to Peter Schiff’s campaign for senate from the State of Connecticut. Why? Because like Jim Rogers, Lew Rockwell, and Ron Paul, Peter is an Austrian economist, which, I believe, is extremely important in today’s insane economic climate.

I’ve never understood why it is important for a person to save and delay gratification, while the same thing is irrelevant for a government. Some have the balls to point to a Fallacy of Composition, but I laugh at those morons … Peter is one of the very few who understand that we as a country can no longer rely on foreign governments purchasing the US debt so that it can fuel US consumer consumption, which is 2/3 of the entire US economy.

At any rate, I’ve been following Peter for a very long time … Made some money following his advice, and will continue to listen and take to heart everything that man says. If you’re anything like me, please research investment into foreign commodities and precious metals …

Howdy, y’all.

It’s been months since we’ve had television in the house.  We’re saving about $50 a month by not having basic cable package, opting only for the Internet.  We watch Jon Stewart and Colbert on Hulu, and “Lost” on ABC.  I also back up Netflix movies on my network attached storage box.

So we’ve been watching all that good stuff on our notebook, Dell XPS M1530.

It has an HDMI port, and so does our television.  When you plug the cable in and turn on the TV, the notification goes off, and the laptop automatically connects to the TV and displays the content on the TV screen.  The sound automatically maps to the TV through the HDMI cable, as well, so that you don’t listen to the cheesy little laptop speakers, but to the normal TV speakers.

The laptop came with a little remote, so it works as a media player really well!

Here’s the entire setup:

D-Link DNS-323 NAS (Network Attached Storage) with 1TB of HDD space ($130)
D-Link DIR-655 Extreme-N Wireless Router ($100)
Dell XPS M1530 Notebook, Core 2 Duo T8100, 4Gb of RAM ($700)
Panasonic 42″ Plasma Television ($800 two years ago)
Gigabit Ethernet (wired) (varies)

Considering that most people already have computers and television sets, the only major missing components are the HDMI port and the network storage for the movies/shows.

We don’t miss our basic cable TV at all!