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Archive for March, 2012

Mortgage Countdown..

March 18th, 2012 at 01:17 pm

We are coming to the end of our mortgage - 8 more months and $14,000ish to go. Can't wait until it's gone! We started out in 1995 with 2 incomes, a 15 year mortgage (we put 20% down) at 7.5% fixed interest. In 2002, with 8 years left and only one income, we refinanced to a 10 year mortgage at 5 5/8% and cashed out some of our equity to buy a new car. We justified that because the amount we saved in interest paid for the car.

I realized around 2004 that, even though we maxed out DH's 401k, after losing my income (40% of the household income) we were living paycheck to paycheck. We didn't have any extra cash at all left each month. We had a 3 month emergency fund by accident with money saved before I quit my job to become a SAHM. Thank goodness we were smart when we bought our house and purposely decided what we could afford based on just DH's income - instead of letting the realtor talk us into buying "more house".

We are in great shape now. We managed to live very frugally on the one income and resisted the suggestions by our families to refinance to a longer term again. I started my new job 6 months ago so that income already feels like "gravy" to the budget. Once the mortgage is gone, that extra money will all go to savings - mostly for college for the kids.

I love to watch HGTV and find myself wanting to yell at the people buying homes with 30 year mortgages and 2% down - don't do it!! Save more money, put more down, and don't max out your budget to the point you can't save anything toward retirement!!