Archive for September 2004

Fully Amortized Mortgages Considered Harmful

September 27, 2004

Update: Stop reading this now. It’s drivel. It was written by an idiot. (me)

I’m doing it. I’m refinancing my house to an adjustable rate interest only loan.

Now that I’m on this side of the fence, I can’t believe that we little people, the not-banks, put up with such ridiculous risk. It’s a form of oppression brought on by financial ignorance.

When you give (just being pedantic) a 30 year fixed mortgage on your little ol’ homestead, the lender works out a payment scheme for you whereby you pay down the debt secured by your house “automatically” over the course of 30 years. You don’t have to think about it. Just make the minimum payment and 30 years later your home is paid off.

It’s a rip-off.

It’s a pretty well known fact that when you make your first year of $1000+ payments on your mortgage, you probably only pay down about, what, $1200 of your debt. Somewhere around 90% of your payments went to paying interest on your loan. If you keep it up for several years, your payments start to make a bigger dent in the principal of the debt, until near the end of the 30 years most of the payment actually pays down the mortgage.

Folks have invented a few feeble methods for knocking down the debt faster. You can make payments larger than the minimum payment. That money goes to the principal. Some folks who are more clever make two half payments per month. That cuts a number of years off the loan.

But what if you lose your job?

If you have an interest only loan your minimum payment is lower. You can weather a tough financial time by paying interest only and make up the difference in missed principal when your position strengthens.

If you were to get an interest only loan and make the equivalent amortized payments for a couple years and then lose your job, you’ve paid down more principal so your position is stronger if you should need to sell the property securing your loan.

I’m going all out and getting an adjustable rate. This is going to free up a lot of cash flow for me. I’m going to invest that cash flow in the marketing associated with my investment strategy. I expect to be able to pay down the principal of my loan with a combination of small payments made consistently and larger payments made periodically as I close deals.

This flexibility would not be possible if I locked myself into an amortized loan.

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The Right Way To Invoke SQL

September 27, 2004

The right way to call SQL from Lisp. I like the direction in which Daniel Barlow is headed.

Lisp Environment

September 17, 2004

After reading way too much Paul Graham I decided I must learn Lisp.

The learning curve is steep for this Python junkie. One of the major difficulties for me was just getting the hang of transferring my thinking from edit/save/run to the Lisp REPL. Another was the fact that Vim facilities for working with Lisp just aren’t up to snuff.

The first Unixy editor I learned well was Emacs. After that I used SciTE for awhile. (I wanted to get back to regular PC keystrokes. Maybe I was insane…) Finally a coworker showed me how to use Vim effectively and that’s where I’ve been for some time.

Trouble is, when you go to learn free Lisp, you pretty much have to use Emacs, and retraining my hands from vim reflexes to Emacs reflexes was too hard.

Viper mode for Emacs is great. The only thing that still drives me wild is that viper maps the V key to visit instead of something like Vim’s visual mode. But I can live with that.

That’s the keystroke part of the story. Now you need to control the REPL from Emacs. SLIME seems like the best call here.

And then you actually need Lisp. I started with Clisp, but ended with CMUCL. I use Debian and the Lisp packages there seem to behave well together.