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To refinance or not to refinance

July 14th, 2012 at 07:16 am


Our initial mortgages (yes, 's' as in more than one) was taken when we bought our house in October 2006, and consisted of:
*the main mortgage (80%), a 30-year at 6.375%
*a piggyback, amortized over 30 years, but a payout after 10 (or was it 15?) years. Rate: 8.125%.

In August 2010, we refinanced. The goals were:
(1) lower our payment
(2) lower out rate, and
(3) consolidate both loans into one.
In 2010, both (1) and (2) were reasonable wishes. However, (3) depended on the 80% home-ownership holy grail.
Fortunately for us, the appraiser came up with a value on our house that made us reach the 80%. What a sigh of relieve when I got that phone call!
So we refinanced, another 30-year at 4.75% this time. We are "saving" over $300 a month, but that means we've also added 2 years to the amount of time we'll be paying for this loan.

Now is July 2012, and rates are even lower than what they were 2 years ago. This time, there are 2 goals:
(1) lower our rate
(2) lower the loan period to 20, or, if at all possible, 15 years.
I've made a few calls, and both should be possible. I was quoted 3.625% for a 20-year.

The downside: payment would go up (about $150). But, we're at a place were we can afford that extra payment. So, is it worth it?

Heck yeah!
Ever heard "the more you spend, the more you save"?
It drives me nuts when I hear this in commercials, because it's just stupid to suggest to people that "the more they spend, the more they save". No! The more you spend, the more you spend. Period.
In this case, however, it would mean that over the period of 20 years, we would truly save over $100,000 in interest. I don't know about you, but that's not money I can just turn my nose up at.

But are you planning on staying in the house for 20 years? you're asking (yes, I can hear you).
Maybe not, but here's the kicker:
*30-year at 4.75%:
Principal paid to start is around $300. After almost 2 years, we're paying $350 towards principal
*20-year at 3.625%:
Principal paid to start is $720. That's $720 that's going towards equity and not in the bank's pocket.
Or put in other terms: I'm building equity in my house twice as fast.

Next step: call my mortgage officer to schedule a new appraisal.

Let's recap...

September 28th, 2011 at 04:16 am

Last blog entry was in July 2007... Holy moly, 4 years.

So, where are we at? First, let's take a look at where I left thing at...

Hhmm... Not all that inspiring. Our total credit card debt was a bit above $12,500.

And in September 2011? $10,500. We actually reached an all-time-high of $21,800 in August 2009 (Did I mention I keep record of everything? Wink )

The numbers are not aw inspiring, but there are a few things that have changed since 2007:
1. I changed jobs in early 2010 and am making a bit more money
2. We have a plan to pay off the debt - which started in February 2010
3. We have the motivation!! - laugh all you want, but this is making a huge difference.

So the plan:
I love spreadsheets! So I've come up with a card-by-card and month-by-month pay off schedule.

If we stick to the schedule (and WE WILL!), we're on our way to pay all of our credit cards by April 2012. The monthly payment on credit cards is along the line of $1200-1400 depending on the month. This is a big chunk of our budget, but it's just necessary at this point. I'm simply tired of dragging this debt around. It's ridiculous and preventing us from enjoying ourselves.

So here we go... April 2012! Let's do it Smile

I'm back!!

September 10th, 2011 at 07:02 am

Well, I don't know what to say. I thought I could go on my own. Create my own blog, but it's hard work, especially when you don't have a supporting community as there is here.

I've decided to close my Wordpress blog and come back to my SavingAdvice blog.

Posting this right after the year-old "I did it!" post is a little ridiculous, but I'll live Smile

I'm on vacations, visiting family and friends right now. I think being here at home is giving me some inspiration and motivation to start blogging again.

I need to do a little bit of dusting around my page as well, but I'm glad I'm back here.

I did it..!!

July 19th, 2007 at 03:22 pm

Update July 2012: well, the blog is still up, but I have not posted to it in ages. I will probably not delete it, but will not post to it either
My own Wordpress blog is up and running. You can check it out at:
http://thelittleblogthatcould.wordpress.com/

I will still post post here about my personal finances, but you'll be able to find more generic or non-PF related post over there.

Let me know how I am doing.

I will be at a school next week

July 14th, 2007 at 03:22 pm

My boss is paying for me to go take a Java course next week. I'm pretty excited about it. Especially knowing that I'll be at Sun's Burlington Campus Smile That's pretty awesome actually. I'll be learning Java where it was invented.

We haven't discussed any raises when I get back the following week, but since the class is all paid for (it is $2,000!), I though I wouldn't push my luck.

I did sign a paper saying that if I left the company within the year after I completed the course, I would have to reimburse the full amount. That part I'm not thrilled about. Even though I understand the reason, I though that a pro-rated reimbursement would have been more appropriate.

Anyway, so that where I'll be next week.

Flying out on my own - step 1

July 12th, 2007 at 12:26 pm

I have been thinking of creating my own blog for a little while now. My first step is figuring out what I need for a platform. The 2 big names out there are Blogger and Typepad.

Blogger is free, but Typepad charges a http://www.sixapart.com/typepad/pricing.

I have found a bunch of blog entries comparing the two, but none recent. I have opened an account at http://forum.authorityblogger.com/index.php, where I have started a thread asking just that.

What would I talk about you ask? I have compiled a list of topics that I want to talk about:
- Personal finance and money in general
- Energy efficiency and conservation / Living green
- House and home improvements
- Gardening
- Cooking and Baking
- Pets
- Pregnancy, Parenting and Babies
- Current events
- Work, Career and Job Search

It is as random as I could come up with Smile
One topic that I will not discuss: politics.

[UPDATE 09/2011: so, this little plan didn't pan out as well as I had hoped it would. It takes time and efforts that 'm simply not willing to spend to develop such thing. No worries though, SA is a much better place for my needs, and the people are way cooler Wink]

Rant about work!!

July 9th, 2007 at 11:57 am

I am very angry right now. Here's the deal, we have been in a office for the past year where we all share one room. I don't mind it so much, but we are all craving some kind of privacy. Well, there it is! We are moving tomorrow in permanent spaces. Problem? There are a limited number of "real" offices and the rest are cubicles.

When the announcement was made a few months ago that we would be moving by our director of something-something-very-important, I had asked him for one of the "real" office. Why did I think I deserved it? Well, I'm the employee with the most seniority. I have been working here for 4 years and the next most senior employee has been here for only 1 year. He told me would get it.

Today, he tells me that I am not getting one of the offices. No, I am getting a cubicle. Well, that's just BS! Especially when the people who are getting offices are:
- The CEO, alright, I guess she could get one
- The CFO, who is there part time
- One sales guy, who is NEVER here, always traveling left and right
- Our dear director of something-something-very-important. The guy has been here a few months and I know so much more than he does, but he has "Director" in his title, so he gets an office.

This is so unfair.

I realize that it's very trivial,but it's little things like that that make me feel so not appreciated and make me want to tell them where they can go.

Where does the picture of the rock fit in all of this? Well, it doesn't, but I like it Smile

Increased my Roth IRA contribution and yearly goal update

July 3rd, 2007 at 02:15 pm

My Roth IRA at Vanguard is now worth $ 2,456.51. Up 5.66% since January 19. Not bad.

I've decided to increase the contribution from $50 to $75.

It's not going to make a HUGE difference, but it's still 50% more.

2007 GOAL UPDATE
My goal of putting 10% of our income in a savings account is not going to happen. I am able to put between $100 and $200 every month, but $7,000 is too much at that point.

I have come up with a http://lau.savingadvice.com/2007/06/09/payment-repayment-pla... a few months ago, and we are sticking to it. So far so good! We should end up with only one CC by December.
The car loan will be gone by February, just like my goal was set to. Smile

Right now, we cannot make the $1,550 and $300 payment on the mortgage as I wanted to, so I am sticking with the regular payments of $1,477.32 and $252.45 respectively.

Computer fund slowly growing

June 28th, 2007 at 02:18 pm

Update on http://lau.savingadvice.com/2007/03/18/my-new-computer_23710/ post.

The HSBC account I opened for it is slowly growing and has $ 121.01 in it. The configuration I want has gone down since last March. I've also had to change a few components as the initial ones were not available anymore.

Previous quote: $ 513.96
New quote: $ 436.96

Only $300 more to go

Today is volunteer day

June 16th, 2007 at 06:54 am

I'm getting ready to go and volunteer to clean the Esplanade, along the Charles River, in Boston.

I'm part of an association called http://www.bostoncares.org/.

Boston Cares organizes and leads team oriented volunteer opportunities throughout Greater Boston that have a positive impact on individuals and communities

Check it out if you live in the area.

Life Insurance Quote

June 13th, 2007 at 03:11 pm

One thing that was very overdue since we got the house was to get both me and hubby covered with life insurance.

And because Suze says that no insurance is useful except term life, I requested quotes just for that: Term Life.

Wow! I didn't expect such high premiums.
I asked for coverage at $250k and $500k, for 20 and 30 year term.

For me? $452 to $1,225.
For hubby? $1,600 to $4,615.

Well, we might look at a lower coverage.

The dog ate my glasses

June 12th, 2007 at 09:06 am

Oh yeah, he did. Really.

I left him alone downstairs last night for about 5 minutes. When I came down the stairs, my glasses were on the floor. One lens was out of its socket. One branch is completely chewed and bent.

I don't think I can have it fixed. It is was only the lenses, it wouldn't be too bad, but frames are so expensive. And off course, hubby and I didn't think it would be worth getting the vision plan. Well, THAT was a smart move.

I bought these glasses in France, and I was covered by insurance so it wasn't much. I don't even know what I should expect to pay for a new pair... Any idea??


And on a totally unrelated subject. I've been watching the http://dsc.discovery.com/fansites/deadliestcatch/deadliestca... on the Discovery Channel. AWESOME show!!
I've had the biggest school girl crush on Sig Hansen... I've never cared for the whole blond hair, blue eyes, Norwegian type, but there's something about him...

Debt repayment plan is written

June 9th, 2007 at 06:36 pm

I've computed all the debts we have which includes:
- 4 credits cards
- 1 credit card at 0%
- 1 medical bill
- 1 car loan

The plan is to have all of it, except one credit card paid off on February 2008.

The debt totals $11,447.28. Hmm... not great, but we'll get to it.

The plan: snowball the payments until one remains and gets paid off.

The order it will be paid off:
- Chase $25 owed
- Home Depot $35 owed
- Target $311.98 owed
- Citi $1,138.24 owed (all at 0%)
- Medical bill $241.78
- Car $4,603.89
- MBNA $4,918.39
Total $11,249.28

We can allocate $1,180 every months towards that debt, increasing it by $10 every months.

We're actually already 2 months into the plan. The goal is to see all 0.00 in that first column. Smile



------- Edit -------
D's comment about putting the payment from the 0% card into a high yield savings account and only making minimum payments got me thinking: how much would we make in interest if I did that?

The minimum payment on the card is $20. Since we make between $160 and $165 payments, it would leave us $140-145 to put in the savings.

We have an E-Loan account at 5.12%. Let's see...

So we're talking $22 in interest. What should I do? Not as much as I thought it would be.

Is it worth it??

What happens to my money for 4 days??

May 24th, 2007 at 07:28 am

I opened an HSBC savings account a few months ago. I am scheduling a transfer for this month, and checked last month's transfer to see for what day I should plan it...

Well, well, I didn't notice but, the money was taken out of my account on April 19, only to be credited in the HSBC one on April 23. That's 4 days of money floating around somewhere. Granted, it was only $25 so I didn't lose a lot of interest, but if I'm not getting the interests, someone else must be...

Just a thought!...