How much does your interest rate matter?

Liz and I have been looking at buying a home recently (as if having a baby weren't enough stress) so I've had mortgage rates on the brain. We recently got pre-approved for a 4.75% loan, which appears to be just about the lowest rate in recent history. It was up around 6% last November, 9.25% in the summer of 2006, 15% in 1986, and a whopping 18% in late 1981. So how much of a difference does it make to be buying a home now instead of at one of these higher interest rates? Let's take a look.

If we don't count mortgage insurance or any other added fees, we can calculate that a $100,000 loan will look like this at the interest rates mentioned above:

As you can see, borrowing the same amount of money in the early 1980s, you'd have had to pay almost three times as much as you do now. The interest alone would have been over four times the price of the home itself! Now, the interest won't even sum up to the original home price. Of course, homes were cheaper back then, too. So maybe the home that cost $100,000 back then is worth $500,000 now.

The $8000 tax credit for first-time homebuyers (anybody who hasn't owned their primary residence in the past 3 years) is a nice extra incentive, but it's a pittance compared to the lower interest rates.

One more quick comparison before I finish: let's say that you bought a home for $100,000 five years ago and then refinanced it last year for 6%. Let's say you're now wondering whether you should refinance the home, which you've determined would cost you about $5000. You probably haven't paid off much of the principle on the home because the banks purposely weight the payments so you're paying mostly interest for the first several years. Assume that you've still got about $90,000 left on your mortgage and you decide to refinance for $95,000 so that you can get up-front money to pay for the cost of refinancing. Even though it's a 30-year loan, you plan to make extra payments to pay it off in 25 years since that's what you would have done anyway. Here's the difference between just paying off the rest of your $90,000 and refinancing:

So despite adding $5,000 to your loan today, you'd still come out over $13,000 ahead at the end of 25 years!

Another baby Chris photo

Isn't he just the cutest baby ever?

Here I am holding our beautiful baby boy, less than 15 minutes after he was born! Christopher James Jensen. Born 8 pounds 10 ounces!

My Very Pregnant Wife

Here's a photo taken March 17. Chris was born nine days later.

Baby Chris

We had our son this morning at 4:44 AM.  8 pounds 10 ounces.  Twenty and a half inches long.  Pictures will come later.  First, a nap.

Freedom of speech

Apparently there was a cable company that couldn't permit an Anti-Hillary movie to air on their pay-per-view channels because it fell under the time period that makes it subject to campaign finance laws. The Supreme court is now thinking of striking down the law competely, based on it First-Amendment implications.

It is odd how we can say that a film that gets released six months before an election would be okay, while a film that gets released a little closer to the elections should be subject to campaign regulations.

I understand the desire to prevent the nation from becoming a plutocracy, where he who has the most money controls the government. But the justices are right to be concerned about the implications of limiting the publication of free speech. What's the difference between the U.S.'s blocking the publication of campaign ads and China's blocking YouTube? Ultimately, if we can't trust American citizens to make an informed decision while they're being inundated with campaign ads, why do we think we can trust them any more when they're not?

Heist

Here's an interesting article that exposes some of the reasons that the credit crisis really happened, and why what Washington is doing now isn't likely to fix anything.

Youtube diplomacy

There are a lot of areas where I disagree with President Barack Obama, but you've got to admit the man is smart.  He's begun using YouTube to express America's goodwill toward Iran.  If this can help to improve relations between the U.S. and Iran, bringing the citizens together, that will be one undeniably good thing that he has done as President.

When I was in France, I was surprised at how many people there said, "What do the Americans think of us?  We hear that they don't like us."  Then I came back to the U.S. and people kept asking me, "What did the French people treat you?  We hear they don't like Americans."

The fact is, if people can realize that we all care about one another, and that despite our political differences we are all a part of humanity, we will be one step closer to world peace.  No amount of speaking softly, and no amount of carrying large sticks, can ever be a substitute for feelings of charity and goodwill among the populace of two nations.

Complaint to HBO

Submitted here

To whom it may concern,

I would like to add my voice to the thousands that I'm sure you have already heard regarding the scheduled airing of an episode of Big Love which contains scenes from a temple ceremony practiced by the Church of Jesus Christ of Latter-day Saints. While I realize that many people find it difficult to understand why Latter-day Saints would feel offended at having this ceremony publicized, that does not excuse ignoring the fact that they will. I am one of them.

We consider the temple ceremonies to be extremely sacred (and beautiful) events, which require a certain amount of spiritual preparation to be understood and appreciated. It is our hope that everyone in the world will experience these ceremonies first-hand, after having prepared themselves for it. However, to broadcast it without discretion for all the world to see is to show a fundamental lack of appreciation (and respect) for the sanctity of these ordinances.

In your official response to criticism regarding the airing of this episode, you apologized to "those who may be offended," but announced that you planned to air the show regardless. I hope that you will understand how shallow this apology sounds to those who you are offending. Likewise, the assurances that you have taken steps "to assure the accuracy of the ceremony" are unconvincing in light of the fact that the character who is supposedly attending the temple session "as she faces losing the church she loved so much" is living a lifestyle that would preclude her from temple attendance in the first place.

While you have made some overtures at explaining that the LDS church does not permit polygamy among its ranks, you still portray the polygamists in this series as being members of the Church of Jesus Christ of Latter-day Saints. This is patently false. Ever since the LDS church officially banned polygamy well over a century ago, those who continued to engage in polygamous marriages have removed themselves from fellowship with the church. They do not attend church in LDS wards, as they have their own religious leaders. If they go to a temple, it is one that they build (such as the one found on the FLDS compound in Texas recently), which is not associated in any way with the LDS church.

To Latter-day Saints, the Temple is such a sacred place that you must hold a current temple recommend from a bishop to enter therein. In order for a bishop to sign such a recommend, you would have to (among other things) attend church regularly and pay a full tithe. You would almost certainly be asked to participate in a church calling. A standard temple recommend is valid for two years, and a computerized barcode system keeps records synchronized between the temples and local wards. In and of itself, this does not make it impossible for an unworthy person to enter the temple, but it does seem extremely unlikely.

I do recognize your right as a production company, and as American citizens, to use your resources to portray anything you want--any way you want--on your network. Because Latter-day Saints are a peace- and freedom-loving people, I hope you feel free to air the show without the fear of retribution that you might face if you were offending members of certain other religions.

That said, I hope you will understand that Church members will not see this as a harmless and moving portrayal in a TV drama, but as an improbable excuse to show something that's "never been shown on television before." Don't be surprised, either, if we don't trust the intentions of the show's producers, including Tom Hanks, who has been quite open about his feelings toward LDS members who supported Proposition 8 in California. And although, up to this point, I have not had a subscription to HBO, please be assured that my decision to do so in the future will hinge largely on the respect you show (or don't show) toward that which I hold dear.

Sincerely,

James Jensen

Unemployment: An interesting trend

I noticed an interesting trend the other day, as I was researching unemployment rates in the U.S.
See if you can notice a trend in these two images: Here and Here.
Obviously, this isn't an in-depth scientific study, and the statistical analysis is rendered imperfect by the flaws in the electoral vote system. But it sure seems like the most left-leaning states are the ones with the worst unemployment rates. I can think of a few possible explanations for this:

1. People tend to vote for change when the economy is weak, regardless of who is in power. Maybe since these states were hit the hardest by the economic downturn, their citizens were more prone to vote for the "other party."
2. Liberal legislation puts more government spending toward taking care of the jobless. Perhaps people in states with higher unemployment rates feel safer with liberals in power, because they'll be better cared-for if they lose their job.
   
3. Liberal legislation favors public welfare over businesses. Perhaps the political environment of these states makes jobs harder to create, or makes it so that people aren't as motivated to get a job.

So it basically boils down to:

1. People in struggling economies tend to vote for the "other guy," OR
2. People in struggling economies tend to vote for liberals, OR
   
3. Liberal policies are worse for the economy.

I'm sure there are lots of folks who would love to debate endlessly about which of these possibilities is true. But just as an exercise in theory, let's explore the consequences of the first two (the consequences of number 3 are obvious).

If you assume that the number 1 priority of elected officials is to get re-elected (a bit simplistic, but bear with me), would it make more sense for liberals in office to strengthen the economy, or to further expand welfare for the unemployed?

On the one hand, if the economy improves, people wouldn't be as interested in voting for the "other guy." On the other hand, if unemployment goes back down, people would feel more comfortable voting for conservatives. Catch 22.