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Mortgage Update

January 26th, 2011 at 10:28 pm

My raise barely covered our health insurance increase (if it even did), but this year we get some tax breaks compared to last year.

So, we decided to put $50/month extra to the mortgage.

I didn't for January since my raise was only in effect for half the month.

However, dh has had a good ebay/amazon/craigslist month and so we should get a $50 deposit around 1/31 (from amazon). I was also going to add a $20 gift he got to the 2/28 payment. With the new found money I canceled the initial mortgage payment and will pay it directly on the mortgage bank's website to make sure the principal gets applied correctly. +$70 for January. Looks like I will have even more for February (more expected sales).

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I haven't been big on the mortgage pre-payments. So, what has changed? Well, being able to max out retirement is one (that was our primary goal - mortgage paydown being secondary).

We also borrowed money (closing costs) to refinance the last time, so we feel an extra priority to pay those costs down. We've never borrowed a penny against our home, otherwise (even through many other purchases/refis. We usually pay cash for closing costs).

Then there is the psychology of breaking the $200k barrier. Not only is it a big fat six figure number, but we had paid our first mortgage down to almost $200k in 2001, before we moved. Logically I know our community is very high end, and we have a real house, a garage, a yard, and over twice the space, for a mere $30k more in loans. But, by the same token, we paid our first condo down very quickly (we both worked) and it's a bummer that in 10 years all we have accomplished is nothing on the mortgage balance. Back to where we started... This wasn't exactly what we had planned, anyway. I suppose that is the part that bothers me. Making no forward progress on that debt in 10 years, was not part of the plan. We have more and we work far less, but expected to make more forward progress all the same.

That said, paying down the mortgage is still not a huge priority. If we came into some extra money, we'd consider paying down a small chunk to make up for lost time. Mostly our plan is to resume our old $1300, $1500, or $1800/month payments, once dh returned to work. How much would depend on his income. Last we both worked, we were able to swing $1800/month for a 15-year mortgage (higher interest rates than at current). I think $1800/month would be very reasonable with 1.5 or 2 incomes. I make much more money now than I did in 2001. Our current payment is $1100 - we refied from $1500 to $1100 over the years, with dropping interest rates. We are sticking with the 30-year as long as the interest rates are this low. I don't want to fret over a $1800/month payment in case of a lay off or something like that. I certainly can't afford that on my income alone. But when we are both working, we will gladly pay the extra principal.

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ETA: I received a $20 rebate today for my Visa. I get 1% cash back on this visa - only used for vendors who do not accept my AmEx (3% cash back on that one). The Visa rebate is just deposited to my checking account automatically, every January.

So, I Was able to keep the 2/28 mortgage payment @ an extra $70 as well.

Talk about timing! I took out the $20 I moved up to January, and another $20 *magically* appeared in my account. Too funny! So I added $20 back to the 2/28 mortgage payment. This was in Quicken. I will actually make the payment closer to the due date - see what else turns up.

1 Responses to “Mortgage Update”

  1. ThriftoRama Says:

    I understand the mortgage thing. Those small amounts do add up though. I'm a true believer in "snowflaking". I've done it with student loans and every other kind of loan and all but one are gone now!

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