Finish Him! — Paying off the last bit of debt

It’s been a year since we started aggressively attacking our debt. The first to go was the car loan with an 8+% interest rate, and it was an obvious choice. Just by paying that off early, we’ve saved more in interest fees than we would have earned on that same cash in a savings account. Since we started seriously trying to kill our debt, we’ve gone on to also pay off Alex’s student loans and finished paying for the new windows in our home. That brings me to the topic of this posting: the last bit of debt, which is my truck payment. Over the past 10 months, I have been aggressively attacking that loan by throwing as much cash at it each month as I could without feeling like I didn’t have enough emergency cash available. The interest rate on the loan is only 1.75%, so I’m not saving an extreme amount of money by paying this off early, but it does add up. My agreed upon payment for the loan was $501 per month, and in the grand scheme of things this is quite ridiculous. Nobody should really be paying that much money towards a motorized couch, but when I first got into the loan, I had yet to see the light of mustachianism. (more…)

Refinancing our future

refinance-houseIn August 2016 I finally decided to take the plunge on refinancing. Interest rates have been low for quite a while now, and I’ve been on the fence about doing this for at least a year. After reading many articles about whether to refinance or not, it was decided that we should do it. The ultimate goal was to lower the payments and not take any equity out of the house. The lowering of payments was accomplished mostly by removing the private mortgage insurance we were paying on our FHA loan. When we originally bought the house in 2010, FHA was our only option. Our apartment rent was going up again and it was finally past the point at which we could mortgage a house instead and actually pay less on housing costs. The only problem was that we had not been saving enough to accumulate a very large down payment. With FHA, a 3.5% down payment of about $8k was enough to secure a mortgage in our price range. With that extremely low down payment came the burden of PMI though. Each month, $149 of my payment was not going towards principle, interest, or taxes. It was basically burning money, and I wanted to get rid of that specific burden as soon as I could. Recently, the housing market has been going gangbusters in our neighborhood, and with very little input by us, the value of our house has risen from the $230k we paid for it up to the mid $300k range. We’ve updated our kitchen and a bathroom, and installed new windows, but otherwise the house is the same as it was when we bought it 6 years ago. It’s amazing how real estate markets can change in relatively short periods of time.