Friday, April 3, 2009
Well, it looks like it will not be worth it to refinance at this time. But that's actually GOOD news, because our mortgage is in better shape than I realized. We took out our mortgage in 2004, $102,000 at a rate of 5.75% for 30 years. We put it on a bi-weekly payment schedule right away, which made sense because our paychecks are bi-weekly. We time the mortgage payment with my husband's paycheck, so we know the money will always be there. Just putting the mortgage on a biweekly schedule has our mortgage paying off about 5 years sooner, basically giving us a 25 year mortgage. But here is the good part. Some time back, I don't even know when, I added $30 to each mortgage payment. It was barely noticeable to us because our insurance payments went down at this time, so the payment is nearly the same as it had always been. According to the mortgage man, this small extra payment means our mortgage will pay off in 17 years! WOW. I had no idea we had made that much progress. This motivates me to put as much on that principle as I can in the next year, before I hope to cut back on working. You save more interest by paying extra principle earlier in the loan, when the interest payments are higher. So who says $30 doesn't buy much these days?
Posted by Katchmo at 9:54 AM