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15-Year Fixed Mortgage Amortization Schedule

I made a new amortization schedule based on my new interest rate, remaining principal balance and monthly payment. When compared to my previous amortization schedule, the benefits of a 15-year fixed mortgage are super obvious. In order to show my amortization schedule within a reasonable amount of space I hid 11 of the 12 months of the year.


The first thing that jumps out at me is the amount of my monthly payment that goes towards principal. With my 15 year fixed mortgage, my first payment has $855.67 going towards principal. With my 30 year fixed mortgage, the first payment had $214.63 going towards principal. It wouldn’t be until the 18th year that I would begin paying around $850 towards principal. The 15-year mortgage quadrupled the amount of my monthly payment going towards principal.

The second thing that jumps out is the ratio of the interest to principal portions of my monthly payment. I am only paying slightly more towards interest than towards principal. In fact, the ratio shifts towards the principal’s favor before the first year is over. For my 30 year mortgage, my first payment was 85/15 interest/principal and it took 19 years to pay more towards principal than interest.

The final thing that jumped out was the total interest paid. My 15 year mortgage has me paying around $90,000 over the life of the loan. My 30 year mortgage had me paying around $275,000 over the life of the loan.

I know it’s kind of like comparing apples to oranges because the interest rates differ by 1.50%, but there is only one downside when comparing a 15 year to a 30 year mortgage. The monthly payment is higher for 15 year mortgages. My monthly payment increased by $350. There are people that argue for 30 year mortgages by saying it’s nice to have extra cash for emergencies. They also say it is better to invest that money ther than put it towards principal. They also say you can make a 30 year mortgage the same as a 15 year mortgage by paying the difference towards principal every month.

Each of those statements are valid points. I just have a really hard time comparing the two amortization schedules and not feeling happy that I have a 15 year mortgage rather than a 30 year mortgage. It’s painful to pay so much money every month and not see your equity increase very much. The numbers are very powerful.

FYI, learn how to make your own amortization schedule.

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Determining Property Taxes For New Construction Condos

During my mortgage refinancing journey, I was forced to reevaluate my knowledge on property taxes. This is my first foray into owning property, which means I’ve never paid property taxes before. I’ve gained a good deal of insight into property taxes in the past week and I’ve learned that new construction property taxes are the most confusing of all. For the benefit of my readers and myself, I will now try to regurgitate everything that I’ve learned.

Pay for the Previous Year

The easiest concept to understand is that property taxes are paid one year retroactively. For instance, in 2009 you are making payments for the property taxes of 2008. This fact made my refinancing very confusing. I was supposed to escrow a full year of property taxes even though I had only lived in condo for three months of 2008.

Pin Numbers

Each piece of property is assigned a pin number. It can take up to 18 months for pin numbers to be assigned to new properties. My building was built on land that had two houses and an apartment complex. The builder was paying property taxes for the three pin numbers corresponding to the three properties it pooled together. It is not until this October that they expect to get pin numbers assigned to each individual condo unit.

Property Taxes at Closing

Property taxes for the remainder of the year are usually escrowed at closing. Part of my closing costs consisted of estimated property taxes that went straight into an escrow account. To estimate this value they took 2% of the purchase price and divided it by 366 to get an estimated daily property tax value. They then multiplied it by 89, which is the number of days I would own the property for 2008.

Paying Property Taxes on a New Construction Condo

As I mentioned in the pin number section, it can get very confusing until the county assigns individual pin numbers. I asked the sales office for the builder how property taxes work. They believe a pin number will be assigned to my individual condo this October. I will be sent a property tax bill. The builder will send me a check for my escrowed money and a check for the portion of the tax bill they owe. I will then deposit these checks and pay the property taxes with a personal check.

A very round about way to pay property taxes if I do say so myself.

Property Taxes and Escrow Accounts

Most people are forced into paying property taxes in monthly installments into an escrow account. To waive this requirement you can pay 1/4 of a point, which for me was about $500. If you waive the escrow requirement, you are expected to save enough money to pay the property tax bill when it arrives.

As a new construction condo, I was paying $100 a month into an escrow account, even though my property taxes will probably require saving $450 a month. Even though I had already built up an escrow for 2008 property taxes, I was still required to pay $100 a month because the bank required a minimum amount. Currently, my new bank only requires $50 per month, however, once the property taxes are assessed in October I imagine my monthly payment will increased accordingly.

Escrow Accounts and Mortgage Refinancing

When I refinanced my mortgage I effectively switched banks from Wells Fargo to Chase. Wells Fargo will send me a check for the entire account value of my escrow account within a month. I have a new escrow account with Chase now.


New construction property taxes are a pain in the butt. After my property taxes are first assessed, it will be significantly easier to understand them. Property taxes should not change significantly from year to year so the monthly allotment going into my escrow should only change minimally. I hope to see no unexpected surprises in the near future with regards to property taxes.

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The Conclusion To My Mortgage Refinancing Journey

Fortunately, this will be the last in my posts regarding my mortgage refinancing journey. In my last post I mentioned that I was just waiting to close, and today I closed.  It feels fantastic to not have to worry about interest rates, closing costs, appraisals, etc. There was, however, one final obstacle that I had to hurdle prior to closing my refinance.

Three days ago my mortgage broker called and said that there was a minor hiccup with the refinance. He said everything was ready and the refinance was cleared, I just had to come up with $5,600 to escrow for property taxes. $5,600!!!!!!!! What!?!?! I was almost in shock. Why did I have to escrow $5,600 for property taxes? Apparently, the title company requires new construction properties who are closing within two months of property tax assessments to escrow 2% of the appraised value to cover their own behind.

I understand not wanting to be up a creak without a paddle, but $5,600? I discussed property taxes with my Mom for a few minutes where she informed me that when you pay property taxes, you are really paying for the prior year. Every October your property is assessed for property taxes. You then pay those property taxes in two installments, March and October. Your 2008 property taxes are paid for in March and October of 2009. So why did I have to escrow $5,600 to pay 2008 property taxes when I only lived in my condo for three months?

My mortgage lender couldn’t answer my question, so he sent me to his underwriter’s house yesterday. The underwriter had all of my documents ready to sign so that I could close if I got my questions squared away. He showed me the Hud and I nearly cried as the cash from borrower was $10,732.26. All I thought I was paying at closing was my closing costs of no more than $1,600.

There were two reasons for such a high number. First, the $5,600 escrow requirement as well as the fees necessary to set up the escrow account. What a rip. Second, my August mortgage payment hadn’t gone through when the underwriter put the package together so I had some principal, interest and late fees that were going to be removed once he verified my payment went through.

I finally got around to asking my question about property taxes. During the discussion I made him aware that the builder was still in charge of the property and association. As soon as I said that he told me I didn’t have to escrow $5,600 and he would cut the portion of my monthly payment that would be going into my escrow from $466 to $50.

I returned to the underwriter’s house this morning, the day the funds are dispersed, to sign all of the documents. Right away he showed me the Hud and I was pleased. The cash from borrower was now $2,760.41 instead of $10,732.26. The total cash from borrower was higher than the closing costs I was quoted ($1,600) because it included interest to both my old bank (Wells Fargo) and my new bank (Chase) for September. I won’t make my first payment until October. Also, I had to pay down principal until the outstanding balance was $240,000 to reach 20% of the appraised value and avoid PMI.

I’m definitely glad this whole refinancing is behind me. I now know what to expect from a refinancing. I learned some very important information about property taxes. I have a mortgage lender who I will definitely do repeat business with and recommend my friends to. I am no longer paying interest to Wells Fargo, which I’m ecstatic about after they screwed me out of $360. I have a significantly lower interest rate, when coupled with a lower term (15-year) will allow me to build up equity quicker and pay less in interest ($90,954.36 instead of $276,081.18, nearly $200,000 less!!!).

In the near future, look for a post about my new amortization schedule and my foray into property taxes. I will be discussing property taxes with the builder to figure out how this will work until I am given my own tax bill by the government.

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Update On My Self Employed Income Projects

I’ve decided to do a monthly update of my self employed income projects. The monthly goals update keeps me focused on accomplishing my goals. I’m hoping that by updating my self employed projects once a month it will force me to think critically about what I have accomplished, what I want to accomplish and define task lists to follow for the upcoming month. Hopefully these posts will keep me accountable and on task, as well as be informative and motivational for my readers.

Marketing a new sports drink online

I went a few weeks without making any progress on this project, but then in the past two weeks, I have made significant progress. My Dad and I met with the supplier of the sports drink and talked about our ideas and decided which products we will be selling. We decided to form an LLC for our company. In the past week I have done a lot of research on LLCs and I’m hoping to have one registered within the next two weeks. At the same time my Dad has been in contact with the supplier working out the details about what percentage of the sale will go to us. The following is my current action plan:

  1. Register our LLC
  2. Sign up for a Business Checking Account
  3. Sign up for a PayPal merchant account
  4. Set up the online store with PayPal
  5. Finalize the website
    • Reasons To Use
    • FAQ
    • Articles (Blog)
  6. Begin marketing campaign to gain organic traffic

Writing ebooks for academic subject tests

I haven’t accomplished very much in the past month with regard to this project. I did narrow my website name down to two options. Last month’s update discussed my project scope. I will do more work on this project once the school year commences and I have completed the bulk of the work on the sport drink project. The following is my current action plan:

  1. Decide on website name between the two options
  2. Set up website
  3. Develop outlines for ebooks
  4. Begin creating content as blog posts
  5. Develop tutoring credentials page
  6. Develop contact page

Affiliate marketing campaigns

I’ve done some minimal work on my only affiliate marketing campaign. So far I’ve made four sales on this one project. The negative is that I spent a good amount of time creating it to only have made four sales. The positive is that I made four sales off of a pretty poor product. I have two products in mind that will hopefully be much more successful.

The first attempt at following the One Week Marketing approach taught me one valuable lesson. Do not take a product to completion unless you’re confident it will convert. From this lesson I have derived a new plan for my affiliate marketing campaigns. Instead of making multiple pages for one product, I will make one page for each product until I find one that converts. Once I find a product that converts I will perform a full One Week Marketing assault on that product. The following is my current action plan:

  1. Create one page for each of the two product ideas
  2. If one of them converts, create a full scale marketing assault
  3. Research more products to market
  4. Create one page for each product
  5. If any of them convert, create a full scale marketing assault
  6. Repeat steps 3-5

Ebook about taking ideas to products

This project is in a holding pattern until the sport drink is up and running. I did some keyword research and decided on a website name for the sales page. I also developed an outline based on some minimal research, as well as a slogan for the product. I am waiting for my Dad to create an outline, which probably won’t happen until the sport drink is up and running.

Create a fantasy sports membership site

I have yet to do anymore on this site. I have a domain name reserved. I don’t know if I will be able to pursue this project much further until I have time to consistently blog about baseball and football. If I’m not consistently blogging with this site I will not be successful. I am targeting the beginning of fantasy baseball 2010 as my starting point. Until then I will be trying to develop the website so that all I have to do when 2010 baseball rolls around is write articles.

I also might experiment with the whole ehow game. At the very least, I see people making $100 a month, which will cover all of my online expenses. Additionally, I might start using this monthly update as a forum for expressing my future plans for this blog as they pertain to monetization. That way you all can get inside my head (not that that’s a good thing) and see where the blog is going. Feel free to provide some input as I am definitely not an expert.

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Goals Update for End of July 2009

Time continues to fly in 2009. Now that we are into August, I only have 5 months to meet my goals. I still think I can meet most of my goals, however, unforeseen circumstances might have changed the importance of a few of my goals. I will discuss these circumstances in the relevant sections. On to the update towards my goals for 2009.

Personal Finance Goals

  • Fully fund 2008 Individual 401k ($8,207.00/$8,207.00) – Completed in March.
  • Fully fund 2008 Roth IRA ($5,000/$5,000) – Completed in April.
  • Fully fund 2009 Individual 401k ($0/$5,264.00) – Last month I said I would put any additional funds that went above my $10,000 emergency fund into my individual 401k. One of the unforeseen circumstances mentioned above has been the ongoing journey towards refinancing my mortgage. I was above the $10,000 mark at the end of July, however, I am now very close to refinancing my mortgage into a 15-year fixed mortgage. This will increase my monthly payments, but greatly decrease my interest over the course of the loan. The new mortgage makes this emergency fund significantly more important. After I pay the closing costs, I will put everything above the $10,000 into my individual 401k. I will fund my Individual 401k before my Roth IRA as I have to pay taxes on that money if it isn’t invested in the account. My Individual 401k account goal for 2009 will increase every month as I realize more self-employed income.
  • Fully fund 2009 Roth IRA ($0/$5,000) – Funding this account is secondary to funding the Individual 401k, however, I believe I will be able to fund both.

Alternative Income Goals

  • Turn blogging into a source of income – The month of June saw many changes and additions to this blog in an attempt to monetize it. In July I did some tweaking and removing of ineffective ads. I removed the tabbed hopbuilder as it was completely ineffective. I wouldn’t be surprised if I didn’t even get one click. I am finding Microsoft’s Pubcenter to be rather ineffective as well, but it is bringing in a minimal amount of money. The large block of ads in the individual posts that I added showed no income for July, so I will most likely change to another Lending Club ad. I strongly believe in Lending Club. Once I finish investing in my retirement accounts, I will put some more money into Lending Club. Finally, I added a text ad for Casden Properties LLC, which will provide me with fixed income. In July I earned a total of $3.21 from text ads, which is a decrease from last year as my total traffic also decreased. So far I have earned a total of $140.27 through affiliate marketing and text ads, which is already enough to cover the $35 for my first year of hosting and the domain name. My overall goal is $565, which also covers my new laptop.
  • Increase monthly page views and subscribers – After switching my focus towards producing self-employed income, I haven’t done a very good job promoting my blog and I’ve also slacked off in the number of posts. My monthly page views decreased from 1,212 to 894. I will try to spend more time in the next month or two to get my blog to ranking higher for specific keywords. This is super important if I want to monetize my blog and I will place a renewed focus on this task in July. I also want to host a carnival by the end of the year.
  • Replace tutoring income through a company with my own personal clients – The school year is starting up, but in past experiences, the tutoring generally doesn’t get into full swing until a few months into the school year. I haven’t decided if I will really try to tutor on my own or focus my time on self-employed ventures.

General Goals

  • Travel to two cities I’ve never been to – I’m still planning on going to Atlanta to see the Braves play some games. I could potentially travel to San Francisco or Cincinnati to watch the Bears on the road. That could be pretty interesting. I will have to nail down those plans in the near future if they’re going to take place.
  • Get in shape – I’ve managed to refocus on getting in shape in July. I’ve started getting up at 7 every morning to bike. I’ve been biking most mornings prior to work. Days that I don’t bike I try to lift. Unfortunately I haven’t seen a major improvement in my weight loss, which means I’ll have to redouble my efforts and stay focused in August. I really wish I was able to run. I suppose it might be time to see a doctor.

It’s scary to think that the year is more than half over. I feel as though all of my goals are still within reach, however, some of them have definitely changed. I know replacing my tutoring income with personal clients is not that high on my list, although I may still do this. Also, I would like to fund my retirement accounts for 2009 before the end of the year, but with a heightened need for an emergency fund and the ability to fund them after the end of the year, that might take a back seat. I suppose we’ll find out in the months ahead. I hope to have some significant accomplishments next month as my mortgage refinancing looks like it will actually take place.

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