Mortgage

Wow… What a week…

I’d meant to post something each and every night regarding all of the happenings but sometimes you just can’t find the time. In that respect — this week totally sucked…

On Monday night, we scheduled that appraisal that we’ve been avoiding since we initiated the mortgage re-fi exactly one month ago.

As a result, I hastily mowed the lawn and filled the POD in the driveway pretty much up to the limit to eliminate additional clutter. Somehow I managed to do this all of this prior to the finale of 24.

On Tuesday evening, the appraiser came over and asked about all of the updates (roof, siding, furnace, etc…) we’d made and then he ventured through the house taking pictures.

Obviously, the entry room was a topic of discussion. Further, since we’d filled the POD already, the parlor and the dining room were also topics of discussion…

Seemed like a nice enough guy but if I’ve learned one thing from all of the BMW and Cessna tucked away in the garage or an arcade game in the kitchen but he clearly mentioned repeatedly that “all things have value”…

Even still, I’m not a big fan of such subjective things. The success of our loan hangs in the balance of what one guy “thinks”.

I mean, it’s either worth it or it isn’t. It should be concrete. We’re either a risk to the lender or we’re not. It shouldn’t matter what color our walls are painted or how cluttered a one year old’s room is. It isn’t a cash out re-fi either so we’re not flight risks in the sense that we’re trying to squeeze money out and run. Our credit scores speak for themselves. This big gray area of unicorns and rainbows, err, subjectivity seems, I dunno, unfair, I guess…

Pimped out CayenneAnd, really, this is a *tiny* loan in the grand scheme of things. I could go out to our local Porsche dealership tonight and get an auto loan (at a comparable rate, even) for a new Cayenne without a problem — but for this I need to jump through hoops. It’s just a little frustrating…

So, back on topic… No word on the results of the appraisal yet — though my credit card was dinged for $445 for good measure. I hope it doesn’t turn out to be $445 spent for nothing.

Wednesday was Duncan‘s first birthday and we spent the day at the Bronx Zoo. The picture at the top of this post was taken on Wednesday.

It was a nice change of pace, taking a Wednesday off from work, but somewhere along the way (I wrestled a hippo) I messed up one of my wrists pretty badly. I mean, it hurts…

A few years ago I jammed my other wrist playing hockey (and stupidly continued to play for months on end) and it took nearly a year before it felt 100%. This time, well, it’s *way* worse — one of those things where it’d probably have been a better outcome if I had just broken it…

Thank goodness I’m right-handed *and* we’ve already moved 99% of the heavy stuff out to the POD already.

Thursday night we had the contractor that gave us the $33487.70 quote come back to go over his crazily over detailed quote for our first floor renovation in more general terms and to ask a few more questions.

After a couple of hours — mostly spent shooting the breeze — we signed off on it and even wrote the first check.

Today, Friday, we wrote that $17000 credit card check to ourselves to get all of the money needed in place for the renovation.

So, yeah, it’s been a pretty busy week and, hopefully, next week we’ll find out how the apprasial went and if the re-fi is going to go through, and if we’re really lucky, demolition might even begin on the house.

Magical UnicornAnd, if everything goes right, maybe my wrist will magically heal too…

Don’t unicorns have healing powers?

I can’t believe that I just mentioned unicorns twice in one post.

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When it comes to my finances, I like to think that I tend to attack my debts aggressively and, for the most part, follow the same line when it comes to my savings and investments too.

But this morning, my wife and I pulled a 180.

We sat down with a mortgage broker and discussed re-financing our mortgage — and not the cash-out variety so as to renovate the first floor of our home (which is desperately needed).

Nope, this was purely a defensive maneuver.

I want a lower monthly payment and I want to eliminate PMI.

That’s it.

Now, of course, we only filled out the application and all that this morning so who knows if it’ll actually come to fruition but it seemed like the right time to, well, play some defense.

See, financially, I think we’re pretty darn close to the best position we’ll ever be in — on paper anyway — with two comfy incomes, retirement accounts where we want them (and growing), over $20k in the bank, lots of equity in our home, and zero credit card debt between us.

Now most of the time I’m not one to prognosticate but I’m also not going to say that we’ll be exempt from any, I dunno, financial disasters in the future… and that’s why I want to take advantage of the situation I find myself in now, you know, before we finally cave in and buy a minivan…

This move could potentially cut my mortgage payment down to around $510 per month. I’ve made monthly car payments significantly higher than that.

That’s a difference maker.

Now this won’t mean that I’ll cut out the weekly payments or even the total amount that I send towards the mortgage anyway — it’ll just be a piece of mind thing knowing that I’ll really only “need” to pay $510…

This all, of course, hinges on an appraisal.

(insert scary fanfare here)

For long time readers, this causes me great anxiety

The guy said that it “could” be waived and I’m hoping my financial info and stellar credit are enough to make that happen but if not, well, we might be having some quick and dirty drywalling on the horizon…

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PIAC LogoI read an article somewhere that said something to the effect of “Saving is for Suckers” — I wish I could find it. It was just a few days ago…

Anyway, it wasn’t a broad stroke sort of thing — obviously saving isn’t for suckers — but, right now, with rates hovering just over one percent, well, it’d probably be a wiser strategy to put the money to use elsewhere.

As things currently stand, I’m saving like crazy so much so that I’m genuinely excited to post my net worth update.

Unfortunately, that also means that I’m a sucker.

I know it’s stupid — I should be paying down my mortgage at 6-something percent instead. Though I’m nearly 10 years into my mortgage, big payments now still make a much larger dent than payments of the same size 5 years down the road.

It’d be in my best interest to hit the mortgage hard right now while my savings are earning so little.

But on the other hand, there’s a lot of comfort that comes with a big number in the savings account. And I’m really trying to save up to get that much needed renovation (started and) paid for. Right now, I’m guessing I’m about 25% of the way there.

Now I know what you’re thinking, here he goes again… I’m not flip-flopping again — just re-evaluating my options.

Again.

I just want it all

Maybe I’ll go 50/50 in the new year? You know, throw half towards savings and half towards the mortgage…

I can’t believe I even said that — my own personal history in debt reduction clearly indicates that financial moves like that get you nowhere fast…

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With as much disdain as I have for CountryWide, you’d think that I’d be thrilled to see the note that they’re currently displaying on their website:

So long Countrywide.com...

Yeah, it brings me some satisfaction that their name will no longer exist (though their business practices won’t change a bit). I’ll admit that much.

So long — good riddance.

But this message also brings me a little bit of anxiety. Back when Bank of America took over MBNA, MBNA’s old site had a message very similar to this — so when the day came that I had to pay my credit card bills on Bank of America’s website, it wouldn’t let me log in — even though they’d said it would be a seamless transition.

The problem?

Yep, I’m one of those people that uses the same username for ALL of my accounts. The passwords vary but the user name is always the same.

Yeah, yeah, don’t give me that identity theft lecture…

Seriously, accounts that I’d had with 5 different institutions are now all under the same umbrella — that’s an identity theft risk in and of itself, no?

Anyway, at the time. I couldn’t use my MBNA user name to log in to Bank of America’s website because I already had a checking account with Bank of America using that exact same user name.

See the problem?

Same thing happened a few years later when BoA combined their Business site with the Personal site — I’d log in and see my checking account, my BoA credit card, a couple of MBNA credit card accounts, but no sign of the business account.

Both times, the issue resolved itself after a couple of months and a few *very* confusing phone calls.

“Thank you for calling Bank of America. Account number, please?”

“Um, Jenny Jenny 867-5309.”

“Okay, sir, you should be able to log in — I have that as a valid account number.”

“Nope, still not working, when I log in, I can’t see that account, just my other accounts.”

“Well, sir, you need to use the login information you used while you were with MBNA to access that account.”

“I can’t — it’s the same as the login information I’ve been using for Bank of America.”

Thankfully, I’ve never encountered a rude BoA customer service person on the phone. Not once. They haven’t always been able to help, but they’re not jerks about it either.

So I guess that on November 9th, we’ll see what happens over on bankofamerica.com. I’ll either be able to see just my mortgage account or everything but. I’m not too worried about it — I just find it annoying.

Oh yeah, and you know what’s really lame? Even though *everything* is Bank of America now, I still can’t make same day payments or transfers between accounts. Sometimes it *still* takes three days…

What’s up with that?

I can't wait for this day...Hey, what happened to paying off the mortgage before your kid is even in school?

Well, I’ve been on pace now for over a year to have my mortgage done and paid for in early 2014 — not that far away — but I’ve decided to take a different route and here’s the reasoning…

The primary reason is that we *need* to renovate the first floor. While I can envision having my main entry way looking as it does for another 40 months or so, I don’t want to.

The other reason is because I’m afraid that if we don’t do the renovation now (or I’m guessing in the next 18 months), we’ll run the risk of never getting it done.

See, I’ve come to the conclusion that in a worst case scenario (a major job loss), we could keep up with the mortgage as it stands now on just my wife’s income.

Now say, for instance, that worst case scenario arrives before we’re able to renovate the first floor…

See where I’m going?

Yeah, we’d be strapped for cash *and* be living in squalid conditions.

Seeing the ends are nearer for a renovation than they are for a mortgage payoff — and the benefits of a renovation far outweigh, well, the alternative (a worst case scenario = nothing), this is the wisest plan that I’ve come up with so far…

Seriously, I thought about this for like 5 minutes straight…

So I’m going to institute my “Mortgage Ladder” plan in November and start saving like a mad man.

Notice, though, that I did *not* say that I’d curb my spending

One thing at a time…

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LadderWow — it’s been awhile since we last talked shop… I mean, this place really is turning into a Mommy Blog.

Recapping financially, I’ve pretty much been on autopilot since the start of the summer…not really focusing on one thing over another, just kinda going with the flow.

It’s all good — debts are falling, assets are growing — but I’m sure I could make better use of the money that I fortunately have at my disposal.

So after a long conversation with my wife over the weekend, I think I’m going to try something new regarding the way I pay my mortgage.

Truth by told, the conversation only lasted around 15 seconds, but I’ve been thinking about it ever since.

See, I find myself with an entire year’s worth of minimum mortgage payments saved up. I call that piece of mind.

I know how I got there — but I still can’t believe I actually did it.

Now I’ve often complained of late that the monthly mortgage bill is a budget buster. I mean, a four-figure bill can’t help but get in the way…

So, what I’m thinking of doing is automating my monthly mortgage payment to be paid from my savings account — the one that has 12 months worth in it already.

My checking account will then be absent of the peaks and valleys that come each time a paycheck comes in and a subsequent mortgage payment clears.

All the while, though I’ll have that comfortable buffer of 12 months, I’ll continue to top-up the savings account on a weekly basis so as not to deplete things too drastically.

Make sense?

Basically, I’m taking my monthly mortgage payment from the forefront to the background and, over time, I’m hoping that it starts to feel like I’m not making mortgage payments at all.

That’s the plan anyway…

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Michael Ian BlackI’ve come to the conclusion that I have a low risk tolerance…

Not so much that I’m afraid to invest in moderately risky markets because I’ve done and continue to do that.

My results have been, as you’d expect, fifty-fifty.

Investing in Pets.com was a mistake.

Cashing out just before the dot-com bust was not.

Using that “found” money to buy a BMW Z3 was, yes, a mistake.

Anyway, I say this because there’s been a lot of talk in my social circle about purchasing homes.

I’m certainly not in the market, but living vicariously through these acquaintances (all of which earn an income comparable to mine) while they search for a home, I can’t help but wonder why they’re looking in the price range that they are.

Without actually saying anything outloud (I’m a terrible friend), I think that they’re all nuts. I’d never be willing to take out a mortgage *that* large.

Three grand per month? Yeah, I don’t think so…

But sometimes I sit and think, hey, wait a minute… I can apparently afford to live in a house that commands a $3k mortgage payment so why am I living like this?

I dunno, maybe this is where the often referenced ‘consumer confidence’ comes into play — you know, “Consumer confidence fell 6 percent during the month of July…”

You here stuff like that on the news all the time…

How do they measure that, anyway? Seriously.

So, I suppose my low risk tolerance is due to the fact that I have low consumer confidence.

Is that how it works?

I’m not sure…

I generally like to think my consumer confidence is pretty high.

Perhaps I’m fooling myself?

Either way, I’m definitely not confident that I could pay a $3k per month mortgage payment for 30 years.

No freakin’ way.

Thankfully, I don’t have to.

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Mortgage on the MoveAs of this morning, I officially owe less than six figures on my mortage!

Balance is now $99,623.76.

It feels like a weight off of my shoulders even though it’s a pretty meaningless milestone and, really, still a pretty staggering number too.

Even still, from my experiences wiping out credit card debt, every milestone reached seemed to bring me more and more momentum.

I’m not exactly attacking this balance quite as aggressively as I did on the credit card balances but I’m comfortably (relatively) on pace to have my mortgage paid in full sometime in 2014.

So, while I envisioned the day my credit card balances reached $0 as the day I could spend freely (and to a degree, I almost have, though under an unwritten no-debt-incurred rule), with this new 5-figure balance, I’m feeling that much closer to the day when I can obnoxiously spend freely.

Yeah, I know it’s 5 years down the road but I’ve got momentum on my side…

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PIAC Post Extension:
Yes, an entire year after breaking that 22% threshold (which is apparently a law with a TON of loopholes), I’m *still* paying PMI… Ugh.

Can You Dig It?

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