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Maybe Saved a Gajillion Dollars (Carpet) + Refi Talk

May 7th, 2013 at 06:00 am

I had to share because this seems to be one of those things where going cheap has never paid off for us (though always seems strongly encouraged by the frugies).

General rule of thumb is to only clean or replace or use up items "half as much" as recommended. Or even less. My other rule of thumb is I'd rather work (to pay someone else) than do a chore that I Can not stand. (There are plenty of chores that I don't mind and am not strongly opposed to. The list of chores I'd rather pay someone is pretty small, but makes life a lot nicer).

Carpet Cleaning...

We had someone come in and do the carpets for about $40 early on. Maybe every 2-3 years was a fine schedule. (I am sure they recommend every year).

Would I rather pay someone $40 to handle it or go through the hassle to rent out a cleaner. *no brainer*

Our carpet cleaning guy disappeared, and so we have been in carpet limbo for many many years. Saving Advice talked me into buying a carpet cleaner. Meh. I don't regret the purchase as it has come in handy (particularly in recent years) to clean up pet messes. BUT, cleaning the carpet would take probably days with this stupid thing and it's not very good (nothing at all compared to professional grade). So, I don't think it has been a useful purchase. But, hey, I got it and maybe cleaned the worst areas of the carpet once.

We were initially thinking of going petless when our cat passed, and new carpets were on the horizon. The kids had really thrashed the carpets (we were way too tired - with babies - to clean every spot as we went and deal with it at that point - a few years later and it's so overwhelming). The cat also did a doozie on the carpet in her final months.

Our family room is where most the cat/kid mess is, so it's not horrible - would just be one room to replace. We also had quite a cat mess in the other room (kept litter box in distant corner - no good non-carpet surface to keep it). I really wanted to clean that corner up ASAP but we didn't get a carpet cleaner out until this week.

This place was recommended as "reasonable" and awesome, and I checked online reviews to see "stains disappeared forever."

After being quoted to pay $150 for what we once paid $40, I was not sure on the "reasonable." One large room, a hallway, and the cat corner. Dh might have said "2 rooms and a hallway" which is a fair approximation. BUT, I had high hopes they would do a very good job, so we bit the bullet.

They came over at 10am yesterday. Dh called me around 1:00 yesterday to tell me they were still cleaning. O.M.G. {I think this speaks less to our mess and more to how thorough they were. Maybe a little of both}.

I was so pleased to come home to a house that did not *at all* smell like chemicals. They cleaned up the pet mess like new - it is sitting right now with a special enzyme treatment. The carpet looks brand new.

**The bad thing about this is I don't really see the point to clean them again for another 10 years or so. If we can abuse them like that and they can look this nice with one cleaning. Big Grin **

& the word is the carpets will stay like this. The stains won't creep back up. So, will see...

As of today, I am a convert. Screw this do-it-yourself, or cheap carpet cleaning people. Do it right and we can keep this carpet for many decades (which is also way more environmentally sound).

So, we are going to give it a few months (see how things settle) and then probably get the stairs and the upstairs carpets cleaned. (They aren't bad at all as there are no shoes or food allowed upstairs. Cat did not mess much up there). At this rate it might be $200+ to get 3 rooms and our large/open hallway done, but I think it will be money very well spent. (We have never cleaned the upstairs carpet - so it probably could use a scrub). I am crossing "carpet replacement" off our to-do list. I am crossing it off our near-term and our long-term to-do list. I doubt we will replace this carpet ever. Since we only plan to be here another 15-ish years.

So, saving that much money in the long haul makes me VERY happy. Big Grin

----------------------------------------------------

In other semi-related news, the 2.75% 15-year refi is an evil temptress!! Dh and I had a long talk about it over the weekend. On some level I think we could mostly flip a coin. But, we keep coming across two sticking points when it comes to tying up all our cash in a 15-year mortgage:

1 - We strongly believe in balance. We definitely are the most relaxed we have ever been on one-income and I am reluctant to give that up. We both are. We are richer now and saving more than ever before, so it's not like we have to try as hard as when we were in our teens and 20s. (We also to this day still have less income than we did earlier on, with the one-income situation). As far as "richer" I mean we have more assets. Most our savings is getting invested and compounding since we have far less short-term savings goals and pressures.

2 - We keep coming back to the point that a 15-year mortgage would pay off our home around the time the kids graduate college. BUT, we were just starting to get to a place to *start* to save for college.

We feel like it is better to keep borrowing at 4% (which is hardly anything!) and to 100% never have to borrow again. I am not sure I want to put ourselves in a position to have to borrow (at a likely higher rate) for college. & yes, I have said many times I am not overly worried about it and that college is quite inexpensive here. But I also believe in keeping as many options open as possible. So, we both think it's probably better just to lock in a good 30-year rate for the future.

It's just hard for us to get worked up about the mortgage. We got to have somewhere to live and if we had rented this entire time we would have paid a gajillion dollars more. It's hard to get worked up about the $600/month interest we pay to live in our *dream home* in *California.* It's infinitely less interest and payments than we initially signed up for in 1999 (8.25% on first home. We were paying about $1400/month interest on a CONDO, and renting the condo would have been about $3k per month. This is why it's hard for me to freak out about our current mortgage situation. My housing "Set point" is crazy high. To rent our current home would be $2k per month).

& finally, what would my wiser financial mentors say? Keep the mortgage. Not forever, but just for now.

The reason the 2.75% is such an evil temptress is because we do expect more income and windfalls in the near future. I kind of feel like we should lock it in. BUT, we decided we don't count our eggs before they hatch. This is the most basic of financial principles that we have always followed. We will survive. I think we would survive if we refinanced too, but I think it would be unnecessary stress and pressure.

I am going to keep an eye on 25-year mortgage rates. Rates are getting low enough that it might make sense. I have to run the numbers and doubt we would do this today, but if rates stay low a while, this might be a better compromise.

Yes, I am keeping debt to stay out of debt. But I am choosing debt that has been good to us and we have never had a problem with.

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In other real estate news - I saw final sales price on recent home sale. They asked $375k and sold for $381k. Big Grin Our home will definitely be worth $400k come summer (if not already). That $381k home sold in minutes. What I am curious about is if homes will zoom past $400k. It seems like a logical tipping point (that things would slow down at $399k) BUT with these low interest rates and home buyers being so "monthly payment focused," I will not be surprised if home prices blow past $400k this summer. I don't think it's sustainable in the least, but it's where things seem to be heading. Will see...

This puts our home at 50% equity. We did not overtly discuss this point in our refinance discussions, but may be in the back of my mind. The main reason we were hitting mortgage so hard in recent years was because we were losing so much equity. Was fighting just to keep 20% equity. Was very important to us to keep that flexibility. Succeeded - saved by the bell. We bottomed out right about 20% equity, and then things bounced back in a flash. It's less pressing now. We are still paying down mortgage much faster than historically, because of lower interest rates, and mortgage chips. So it's not like we are totally ignoring it and not paying down faster at all due to large amounts of equity. We have most certainly learned that equity comes and goes - just try our best to stay ahead of the curve. This time we lucked out. (It got awfully close towards the end of the bottom!!)

6 Responses to “Maybe Saved a Gajillion Dollars (Carpet) + Refi Talk”

  1. BuckyBadger Says:

    The thing about 15 year loans, is it's not *all* that different from just prepaying your 30 year so that it's paid off in 15. And that gives you the benefit that if you DO reach a point where the big mortgage is starting to pinch, you can back off for a month, or a few months, or for the rest of the loan. It's giving you that option. And 4% is so freaking low anyway.

    I ran the numbers with a hypothetical $400,000 loan. If you had a 15 year loan at 2.75% the PI payment is $2714.49. If you had a (new) 30 year loan and added enough every month so that you'd be paid off in 15 years it would cost $2959.67. So that's $245.18 a month extra for keeping your options open should you hit a rough patch. (Yes you would pay $43,907.13 more in interest over the 15 years, but you'd also be paying $154,960.43 LESS than if you weren't prepaying, so you're already gaining so much...)

    Unless the payment is low and you're planning on knocking it out in a few years, I just don't think the small savings is worth being locked into the higher payment. It's much nicer to CHOOSE to pay more and then have the OPTION to pay less if you want to.

    In my opinion, of course!!

  2. snafu Says:

    BuckyB makes excellent points. I'd keep watching the numbers. Are you in the group that qualifies for no cost refi mortgages? Would you keep the payments the same? Would you invest the monthly payment difference in a Mutual Fund or ETF or establish a MF as children's college a/c? I'd keep watching the numbers. Keep in mind the amortization tables re-set payment ratio making percentage of payment to interest high. Perhaps contact your lender, tell them you are looking at 'X' because they offer a terrific refi but want to see what they will offer since you have so much equity, been such as good client yaddta yadda.

    I currently have 2 DSs in university - bad family planning. We've always had them put 'skin in the game' for big ticket items they wanted. They've had to earn the money for tuition via savings, summer jobs, part time jobs in high school and a few entrepreneurial efforts. For two years they added research and applications/essays for scholarships, grants and bursaries to the rest of their activities. DS1 did two years at Community College since it was fully transferable and I believe many boys benefit from a quiet transition.

    I am seeing exploration by government and post university's executives to change funding parameters as our graduates are seeking their first jobs with an incredible amount of debt hanging like an albatross from their necks. These young people will soon be community leaders and they'll push for rapid change, the current methods are not sustainable. On another stream, other countries are moving their education programs to ever higher levels. Change is needed.

  3. snafu Says:

    Kitchen PS:
    Corral paperwork until needed: https://www.google.ca/search?q=wall+mounted+file+holders+office&tbm=isch&tbo=u&source=univ&sa=X&ei=8dyGUfneL9HZigLjkIGABg&ved=0CFAQsAQ&biw=1092&bih=449

    several of these like #5 left are DIY projects with items you already have at hand. Our DKs used to make these for me to hold tupperware & margarine lids which were stapled inside cupboards to had a magnets crazy glued on the back and held at the side of the fridge.

  4. snafu Says:

    so sorry, this is a new Mac Air and it's acting up!

  5. MonkeyMama Says:

    @snafu:

    "Keep in mind the amortization tables re-set payment ratio making percentage of payment to interest high." - Actually, this not true. I find these low interest rates kind of fascinating though, because the numbers really do surprise you when you run them. Basically, the bottom line is we don't pay much interest either way. But we hurt the back-end principal more than anything, because overall payments are so much lower. A lower interest rate means less interest up front. I know what you are trying to say, but it doesn't really seem to mean anything since we have gotten to the 5% and lower interest rates. If we refinance another 30 years today, right off the bat 35% of the payment goes to principal. If you run 6% - 8% amortizations then your statement means a heck of a lot more. Then you are starting over with 90% of your payment going to interest. & those are substantially higher payments - so ouch!! 3% & 4% loans are just an entirely different animal. (For example, you pay more principal than interest significantly earlier in the amortization schedule).






  6. MonkeyMama Says:

    @snafu:

    I don't really like the idea of attaching things to the walls, but your link is giving me some ideas to re-purpose some items around the house. I will let you know if I do (well, I will blog about it, and hopefully you see that).

    I have got two places in the kitchen area where I keep manila folders and those are totally fine, but maybe a repurposed magazine holder would make it look a little nicer. I actually also just keep a wild amount of papers (often 6 months+) to file later. I don't really care how that looks so will probably keep it that way. (I find it easier to keep in main living area where I sort mail and school stuff). But, I can rethink that too. You have me thinking...






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