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Mortgage Update

June 22nd, 2017 at 06:48 am

I think it's been a long time since I have done a mortgage update.

The short version is that our last refi was in 2012, for lower interest rate. Given the high unemployment rate here, we've not felt comfortable with a 15-year mortgage. (Well, between that and our health insurance literally going up by $1,000 per month). But we also did not want to reset the clock all over again for 30 years. So our goals with our current (30 year) mortgage have been to pay more principal than interest, and to also not have a mortgage on this house for more than 30 years total.

To that end, as long as we are well employed, we do throw an extra $3,000 per year at the mortgage. I fund with my overtime. (I think we did a bit more in the beginning to have more "principal than interest." Maybe an extra $1,000 in year 1).

We will want to shave off 10 years, so that we don't have a mortgage on this house for 40 years total.

I do have to say that these lower interest rates are absolutely amazing when it comes to mortgage amortization. Our first mortgage on our first condo was $1,500/month. We paid $1,400/month interest! (Only $100 was going to principal). We really barely paid anything down the first 10 years or so of home ownership. (We had basically the same mortgage amortization when we bought our current home).

In contrast, we've paid $40,000 off of our $200,000 mortgage, since our last refi. We are paying off about $8,000 per year, and that is just accelerating with time. So it feels like we are making some real progress. & to be clear, this is with much smaller mortgage payments. It's just that so much less of the payment goes to interest.

Current status:

We have shaved off 4 years off this loan. So that leaves 6 more years that we want to shave off. Will keep chipping away at it.

{Note: Our last $3,000 payment shaved off 7 months}

We don't have any plans to throw any (additional) extra at the mortgage. We have kids starting college in the near future and so are hoarding up cash and investments to that end. Would rather err on saving up enough for college and not having to take out any new loans.

It's all fairly moot as it is 100% likely that we will sell our house in the next decade (while still in our 40s). I am guessing it is most likely that we will sell before we ever pay off? It seems more prudent to save up the down payment for our next home. (Our plan is to downsize and pay cash for our next home. But I am guessing we will settle in our next home before sell current home. A down payment will give us more options on that front, versus having to wait to sell first).


2 Responses to “Mortgage Update”

  1. My English Castle Says:

    It is lovely to be mortgage free. It sounds like you have a great plan in place.

  2. Bluebird Says:

    Great job and planning with the mortgage!

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