Refinance Saga Revisited

When we signed the papers for our refinance, we were told we would be getting a small refund check of about $250 - $300.

The check came in the mail. Only it was for $2800+!

We weren’t sure why, but actually think we figured it out. I had already paid our first mortgage payment for the month. Our loan funded on the 8^th of January and, per the paperwork with the check, we got a prorated refund for our mortgage payment.

I know we SHOULD probably put the money in savings and bulk our savings back up, but I REALLY, REALLY, REALLY want to send the whole thing towards our debt! An extra $3000 payment would go a long way towards getting us back to where we were before my dad died and the holidays hit!

I’m going to have to mull over what to do with the money.

My options are:

·        All the money being paid towards our credit card debt.

·        All the money going into savings.

·        Splitting the money between savings and debt either 50/50 or some other percentage.

·        Putting the money in savings but earmarking it specifically for our family vacation this summer.

o   I was also thinking about using any tax refund for our family vacation. But that would obviously depend on how much of a refund we were to receive.

I just don’t know. Along with our normal and “extra” payments, we will pay $2600+ towards our credit card debt. (Due to the refinance, we get to “skip” our February payment. We put half of our normal payment into savings and the other half is allocated towards our credit card debt.)

It’s good to put our options in writing and to give myself an opportunity to sort the ideas out.

I will keep you updated on what we end up doing.

Refinance Saga

As I have been so MIA lately, you haven’t really heard the ongoing saga about our refinance. It was supposed to be quick. It was supposed to be easy. It was supposed to be painless. And it wasn’t any of those things.

Start to finish actually took 3 months! Can you believe that? It took us longer to refinance the loan on our house than it did to sell our old house and buy this house initially! We responded to a refi mailer we got from our mortgage company. They led us to believe that it would be super quick and fast if we went with them. They lied. The only thing we can figure is that once they get you on the hook, they don’t worry about finishing the refinance quickly because you already bit.

After about 2 months of (what we felt was) jerking us around, The Husband actually went to the mortgage office in our town and spoke with actual people. They were very kind and worked quickly and efficiently to get the ball rolling for us. However, at this time we were rolling into the holiday season so we knew there would be a natural slow-down.

Our loan then had to be transferred from their corporate office to our local office. And we had to start the process All. Over. Again.

To be fair, this was all happening during the final stages of my dad’s life and The Husband was so good about taking care of things and not burdening me with the details. In fact, he only told me what was going on with the refinance when I asked about it. He dealt with everything during that time so that I didn’t have to waste precious time or energy on it. I appreciated it so much!

Once we got the loan transferred “in-house”, things really did start moving along. We had to resubmit all of the necessary documents and re-sign some paperwork; but the biggest pain during the whole thing was actually our solar loan. We took out a 10-year loan on our solar. We have been paying on it for 1.5 years, with 8.5 more to go. Technically, there is a lien on our solar panels: not the house, not the mortgage, just the solar panels, but the lien on the solar equipment, makes it appear that there is a lien on our home. We had to contact our solar company and for the “low” price of $250 (plus a $30 wire transfer fee) they will release the lien on the solar for 25 days so we can refinance. We will have to do this every time we refinance our loan until the solar loan is paid in full. (We don’t plan to refinance again, but you never know what will happen to interest rates.)

To get a better rate on our loan, we bought a point. I don’t actually understand all the logistics regarding what that means, but I understand the end result. By doing this, we were able to get a slightly lower interest rate. The Husband did the calculations and the point will pay for itself in 23 months. Because we will have the loan for 27 years and 8 months, it was worth it. He also figured the math so we knew at what point was our “break-even” point for buying the point. For the first 23 months of our loan, we aren’t actually saving any money, but after that, and for the remaining 25 years, it will be worth to have refinanced and to have bought a point.

We bought our first house over 15 years ago and we have always had 2 mortgages. I am so excited to only have one mortgage payment every month! The bottom fell out of the market about 18 months after we bought our first house so we couldn’t ever refinance it. We were miles under water in that house for years and years. Once the market recovered and we were able to sell it, we didn’t have enough equity to put 20% down so we had an 80% loan and a 10% loan. In addition to paying on our current house for 2+ years, and pretty significant appreciation, we owed less than 80% of what it is worth and were able to refinance into one loan. I’m so excited!

Our previous loans were: 1^st mortgage at $2953 per month. We paid $3000 per month on this loan, so about an extra $47 per month. And our 2^nd loan at $279 - $375 per month, interest only. I paid a minimum of $300 per month but always tried to pay $50 over the minimum payment so at least something was going to principle.

With our refinanced loan, we have to pay $3003 per month… that is an increase of $50 over what we were paying for our first mortgage, but an overall decrease of about $250 - $275 as we won’t have to be paying a second anymore.

Hopefully we can send our “savings” towards our credit card. That would be $3000 extra sent towards the credit card over the course of the next 12 months.

As always, wish us luck.

20 Goals for 2020

Here they are, if a little late for the new year. I came up with 20 financial goals for 2020. Some are basic: pay off debt, save more, etc. and some are much more personal to us!

The last 8 months have been a roller coaster! My life was crazy and busy and I let finances fall by the wayside. I budgeted intermittently, I paid debt sporadically, and I transferred more money out of savings than into it. I want things to be different this year!

These are 20 financial goals that, if successful, will drastically improve our financial situation by the end of the year! In an effort to increase my chances of success, I want to check-in with my goals monthly. Even though I’m getting a late start, I want to get off on the right foot!

Please wish us luck as we try to do better and be better!

1. Get credit card debt below $10000. This has been a monkey on my back for way too long! Because of Christmas and my dad’s death, our credit card debt ballooned to over $20,000… again! I’m hoping to get it down in the $19K range before the statement actually hits, but it’s very depressing! I have a lot of work to do to get out of debt, but it’s not impossible. It will just take discipline and hard work. Pay on the credit card monthly and STOP charging on our credit card.

2. Track our family spending every other month of the year… which will help us with our next goal.

3. Increase contributions to envelopes and go “cash only”: In order to get out of credit card debt, I have to stop charging on my credit cards, therefore, I need to fully fund my envelopes. I want to increase contributions to my envelope so that I will not have to charge any of our daily living expenses: food, gas, toiletries, clothes, etc.

4.  Increase Christmas savings: Last year I budgeted $200 per month, and although it was great to have that money, it wasn’t enough come Christmas time. I want to increase my Christmas budget by 50% every month. By doing this, my hope is that I will fully fund Christmas and not have to charge anything for Christmas, including traditions, parties, foods, and gifts.

5.  Church Tithing: In July of last year, we started donating $200 per month to our church and then in October, upped it to $300. I want to continue monthly donations to my church. My goal is to donate $300 EVERY. SINGLE. MONTH. We have been married for 17 years and never in our marriage have we tithed every single month in a calendar year.

6.  Pay off car! This rolls right into our next goal…

7.  Once The Husband’s car is paid off, put $345 payment into savings each month towards a new car fund.

8.  Save $5000 above and beyond my “normal savings” or any car savings. Can be used for vacation, debt payoff at the end of the year, towards a down payment for a car, buying a car for The Boy, etc. I am using a 52 week challenge to meet this goal and I have already deposited the first 4 weeks into my savings account and have budget for the following 5 weeks in my February budget.

9.  Meal plan 8 months out of the year. I know 8 months is random, but it is really hard for me to do it every month and life gets busy. I’m starting with a goal of meal planning 2/3 of the year. This really cuts down grocery costs and I hope it will help me stay within budget.

10.  Assuming I can meet all of the above goals, my last goal would be to increase my savings rate. Right now, we only “save” $200 a month but I tend to transfer $500+ money out of savings every month, so currently we have a negative savings rate. I would like to get out of debt and add at least $500 a month to our savings account.

11.  Open, and use, a Health Savings Account for The Husband’s braces.

12.  Increase my 403b contributions by $100 sometime during the year.

13.  Increase The Husband’s 401k contributions by 3% by the end of the year.

14.  Have one billing period where I don’t charge ANYTHING (except autopays) on my credit card.

15.  Have a successful “No-Spend” September. Last year we had a horrible no-spend month. With my dad’s illness I was constantly shuttling between my house and my parent’s and it made life, and planning, difficult. This year, I want to be more prepared and truly see a difference in our finances.

16.  This one sounds silly, but I want to add it anyway. I drink… A LOT… of tea. I also buy a lot of tea. I want to drink the loose leaf tea I already have and not buy anymore until I am only down to 3 flavors. I could probably go for at least 6 months without buying any more loose tea. Yes, I have that much!

17.  Add all our “subscriptions” to our monthly budget. We budget, but I forget things like the pool cleaner, The Girl’s IPSY bag, private lessons for The Kids, etc. I want to get all those things actually added into our budget so we can see how much we actually pay out each month.

18.   Don’t spend any money, out of pocket, on supplies for my classroom. It’s so easy to buy everything I need myself. I want to utilize my classroom budget as effectively as possible and not purchase supplies for my classroom using my personal money. (This does not include lessons I might choose to purchase.)

19.   Keep current (monthly) with what I owe The Kids. Our children “work” for us sometimes and we pay them a wage. I keep track of what we owe them and pay them “whenever”. I want to keep up on this better and pay them monthly.

20.   Check in on my financial goals monthly. I know that’s more often than most people, but I need the motivation! And the accountability!

Radio Silence

I’m sort of back… and I can’t say I’m sorry for the radio silence. It came as a result of several different things: busy lives, the holidays, and (mostly) because my dad passed. It’s been a difficult and trying couple of months.

Our debt has been pretty stagnant the last two months and probably increased. I am currently burying my head in the sand when it comes to the numbers. I have paid minimum payments, but that’s about all I can say. Nothing has been paid late. We have continued to donate to our church, and our kids are fed. Right now, those things feel like winning.

I settled a couple of smaller debts that we owed. They were both small, one was very recent and one was from a year and a half ago. The new debt was for something we are sending our kids to, a live show in San Francisco. The older debt was actually from my trip to Japan and has just been hanging over my head waiting to be calculated out. There was some “I owe you, you owe me” that needed to be figured. I did that this past weekend and it felt good to get rid of that.

In other news, with both our kids in high school, it is an expensive time to be a parent. They both attended their Winter Ball last month and it was costly. The Boy went with a date and The Girl is going with friends. We had to buy tickets, and corsages, and dinner, and a dress. You get the point. To top it off, The Boy was invited to another school’s Winter Ball, too. We are definitely entering into the most expensive time in their lives. I hope we survive.

Our refinance, which was supposed to be quick and painless, is still not finished. It’s been over 2 months. We thought staying with the same company would be easier but it hasn’t been. I guess once they get you on the hook for a refinance, they don’t care how long you dangle. And dangle we have! At this point, I will be happy when it is finally finished.

That’s about it for our update… I will write another post when I have time… or inclination!