Monthly Archives: June 2010

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Don't Let's StartWow… My finances are in a total funk of late…

The good news is that the mortgage refinance did go through without a hitch — I finally received a bill from my new lender.

In all, I managed to eliminate PMI, lower my rate 2%, and cut my monthly minimum payment by $750. Pretty good stuff.

My day-to-day finances, though, are in total disarray. See — I’ve been doing the mortgage auto-payment thing, on a weekly basis, for years now.

That’s done.

Shut off. Might not even get it going again…

And, like most responsible folks, I also plan my monthly budget around my biggest bill — the mortgage.

Well, it’s not such a big bill anymore. And, my first payment to the new lender isn’t due until August 1st.

That’s still a long way off.

So, I guess what I’m saying is that I feel like I’ve suddenly got a lot of money to burn. And I guess I do…except that I’ve also got $30k more to pay the contractor working on our house and a fresh and new $17k credit card balance.

I feel “richer” than I ever have but I’m in deeper debt than I’ve grown accustomed to since I finally got myself out of the red

It’s a peculiar situation…

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Totally unrelated photo...  Go Blackhawks!The headline is true — Thursday has come and gone and I’ve just purchased a house…from myself.

Yep, it was just a refinance but after signing my name 40 or 50 times I’ve now officially cut my monthly minimum payment by 60%.

That’s HUGE!

(For the record, I still won’t believe this actually happened until I get a new mortgage bill in the mail…in August, apparently…)

So, anyway, among all of the stuff I had to sign, there was this one sheet that listed all of the fees to be paid to Bank of America (my now former lender) to “release” the loan.

One of the “fees” was for mortgage insurance. It was for $170.30. That works out to exactly two months worth of PMI.

How messed up is that?

It was nearly two years ago that I’d paid my mortgage balance down to the point where PMI should have been cancelled automatically.

It never happened. Countrywide — at the time — wouldn’t let it happen.

I sucked it up and continued to pay $85.15 per month for insurance that I didn’t need *and* couldn’t cancel no matter how hard I tried even after they transitioned to become part of Bank of America.

The refinance was my way out — and it appears to have worked.

But they still got the last shot in with this phantom fee…

I can only shake my head…

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VW Bus - I Still Want One.With so many things up in the air (mortgage re-fi, mega pay cut), my spending this past month was far from ordinary.

  • $3000.00 : Contractor
  • $1346.10 : Mortgage
  • $445.00 : LenderVend Appraisal
  • $241.81 : PODS Storage Unit
  • $200.00 : Cash
  • $114.14 : Cable/Internet
  • $112.19 : Gas
  • $106.96 : Water/Sewer
  • $102.37 : Target
  • $100.00 : Capital One Bank
  • $99.28 : Electricity
  • $93.76 : Natural Gas
  • $92.84 : Business Expenses
  • $52.95 : Flowers
  • $15.66 : Walmart

All together, that’s $6123.06.

Okay, so the total isn’t so out of the ordinary but the breakdown certainly is. If you took all of the renovation and re-finance related expenses out of the equation, I actually had a pretty thrifty month as they alone made up for over 60% of my spending.

Cash was as high as it was because I took a bunch out for the day we took Duncan to the zoo. Sure, it was supposed to be FREE but it wasn’t.

The Target trip also related to Duncan‘s big day. We bought him a leather easy chair, a pool, and some clothes.

I made a $100 payment to my wife’s Capital One account to ensure that her balance was $0 (or less) for when we wrote that $17k check to ourselves. While the card is in her name, I’ll be adding it’s balance to my net worth updates this coming month.

The flower purchase was for a girl that asked Duncan to go to the prom with her. He couldn’t make it but we ordered her flowers on Prom day anyway.

And I can’t believe I stepped foot in a Walmart but that purchase was for a wrist brace after I totally messed it up at the zoo wrestling a hippo…

June’s spending should be even wackier, I’m thinking…

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I've actually never had one of these...So after yesterday’s post, you might be thinking, “Wow, Brainy’s got it pretty good these days, you know, cutting his mortgage payment by 60% and having an extreme renovation done and all…”

And, yes, it might seem that way but, in reality, it’s not that way at all…

Sure, the mortgage payment will go down 60% this month (or next). And yeah, we’re really having the house renovated but there’s something lurking at the other end of the, um, rainbow.

My 9-5 job cut my pay last month playing the economy card.

I don’t think it’s right. I don’t think it’s fair. In fact, I have a lot of thoughts on the subject but that’s neither here nor there.

But it does relate to my finances, obviously, which I document here so it isn’t something that I can “hide”.

My annual salary was cut over 5-figures. No matter how you slice it or how much money you bring in, that’s a game changer.

Last summer, they dropped the 401k match. I was upset then but… tried my best to ignore it as it didn’t really influence my take home pay or my day-to-day finances. (Not that stunting my retirement growth isn’t infuriating on it’s own…)

Now, though, aside from the obvious downward trend and concerns about the financial state of my employer, I can’t ignore the fact that my income has dropped in excess of, well, let’s just say we’re approaching the $20k mark.

That hurts — especially when it comes just as you sign off on a $33k renovation project.

See, you can’t time everything perfectly…

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Late this week we recieved the results of the appraisal done last week for our potential mortgage re-finance.

If you haven’t been keeping up with my nonsensical postings over the past few weeks, well, here’s a quick and dirty recap:

  • At the end of April we thought we’d take a shot at refinancing our mortgage to eliminate paying PMI, lower the interest rate, and, most importantly, lower our minimum monthly payment considerably. [link]
  • Through the re-fi process, we found out just how awesome our credit scores are. [link]
  • When we found out that an apprasial was required to move forward and schedule a closing date, we freaked out because a decent chunck of the interior of our house could *and* should be considered a total s-hole. Rather than do a quick and dirty (but still costly) clean-up, we called in an extreme makeover type of contractor. [link]
  • The quote for the renovation came just over $33k — we cleared out all of our furniture and green lighted the project. [link]
  • Just wanting the potential new lender to leave us alone, and because we don’t *really* need to refinance anyway, we reluctantly scheduled the appraisal even with 1/3 of our home completely empty and in various stages of disrepair and demolition. [link]

Okay, so now you’re up to speed.

So, anyway, the appraisal came in and it’s not as high as I’d expected it to be.

I mean, I could argue about the area homes that they compared our home to until I’m blue in the face — I don’t know how a smaller cape-style home on a 4-lane state highway that faces a HUGE auto dealship can be considered comparable to my huge (in comparison) three story double gabled-ell on a tree-lined residential street but, then again, I’m not an appraiser.

Eitherway, the appraisal came in high enough so that we’ve got nothing to worry about.

We scheduled the closing for next Thursday so, unless anything unforeseen comes up (like if they pull our financials again and see a sudden $17k credit card balance), I won’t need to pay my mortgage at all in June and starting in July, I’ll only need to pay $500 per month.

That’s 60% less than what my current mortgage payment is!

So in one fell swoop, I’m on the cusp of eliminating PMI, paying off my mortgage faster than planned, and paying for this remodel faster than expected too.

I can’t wait for Thursday to be in my rear view mirror so that I know that it’s all official.

Then I’ll have my cake and eat it too…

No, really, I can’t believe how things are falling into place so quickly — it’ll be a huge load off of my shoulders when it’s all done.

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Well, with the market taking a tumble for three or four weeks in a row, I kinda knew the cards were stacked against me pulling out another positive month.

I kept my spending in check (I’ll report that later) in May but it just wasn’t enough to overcome the swing in the market.

Here’s the breakdown:

Cash:
Everything is going here to build up a sum large enough to make payments to the contractor that’ll be renovating roughtly 650 square feet of our home.

Savings:
Hmmmm… Think the uptick in the cash has something to do with the downturn here? Yep — it does. I moved a few thousand dollars around.

Gov’t Bonds:
No additions this month, just pure interest.

401k:
Ouch. Nothing quite like losing over 5% in a short period of time. Doesn’t matter in the long run though…

Home:
No change — but that’ll change next month when I use the results of the recent appraisal to calculate this number.

Auto 1 & Auto 2:
What a load of crap these numbers are… Seriously, a jump of this size makes no sense. No sense at all. Even still — yeah, I’d “buy” my BMW for $5925 any day of the week.

Credit Cards:
An over-payment resulted in a positive balance on one of my credit cards. Weird, after a year of holding steady at zero I’m some how managed to have a credit for two consecutive months.

Auto Loans and Other Loans:
Zilch. Zero. Nada.

Mortgage:
With the possible re-fi still looming, I took a major step back here. Still made extra payments but not of the size I’m used to.

Can You Dig It?

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