Nate and Danielle talk about their second mortgage, refinancing, and their other financial wants, needs, and aspirations through the year thus far.
Show Notes
2019 Quarter 2 Update
- We have officially paid off our $30K second mortgage as of 6/18. All told we opened the loan in mid July 2018 and paid it off 11 months later. We paid $778.58 in interest. So for the privilege of borrowing $30,000 we paid roughly $70 a month in fees in addition to an average of $2727 per month on the principle. Final numbers: we paid $2,800 a month for 11 months to pay off our loan.
- We have about $268K left on our house. We are on a 30 year fixed-rate mortgage at 3.875%. We are currently exploring refinancing the loan. Interest rates keep falling and with the second mortgage paid off, we have extra room in our budget. We are looking at a fixed-rate 15 year mortgage and hoping to get an interest rate around 3%. By doing this, we will increase our mortgage payment by about $600 a month. With the second mortgage we were required to pay $600 a month so we are in the same boat as far the budget goes, but we pay off the house 10 years quicker and save a lot of money in interest.
- Our car has around $11K left on it. It’s on a 0% interest loan so we just pay the monthly cost and aren’t trying to pay it off quicker
- We are both still maxing out our Roth IRAs
- Danielle took a “new” job and is received a $8K raise. Nate will make roughly $4K more next school year.
- We are investing all of Danielle’s new salary into her 401K to make sure that we are on line with 15% of our income into retirement
Overall we had a goal of paying off our second mortgage before Nate’s paychecks ran out for the summer (10 month employee). We did it. We did a good job sticking to the budget and making sure our goals were met.
Our next sights are set on the refinance and, if we do it, adjusting our budget to fit with our updated income and new costs.
We still plan on putting extra money down on the house each month to try and pay it off even sooner. Our long-term goal is to have the house paid off in 10-12 years. We may also increase our crash fund to reflect our new costs and the higher mortgage.