The Re-Fi: 15 vs 30

I'm a little late on this, but it's still somewhat new. Jennifer and I finally refinanced our home on Aug. 23rd after shopping around late June. The Spencer's helped us find a loan officer to go through as they were shopping around at the same time. We found the best price/rate at American Loans. Ours was a little more costly and troublesome since we're dealing with a duplex, but still worth the hassle.

I ended up working with Jason Erskine - the quote he gave me at the start was extremely close to where we ended. It was just under $1100 in closing costs and our appraisal cost was $850 (usually half that for a normal house). The appraisal came in at $235K for an owner occupy and $240K as an investment property. We needed it to come in at $215K to ensure we had 20% equity (hated those PMI payments) - so success there! I bought in March of '09 at 209K, but it appraised then for $230K.

Then we learned why it's wise to avoid changing jobs while in this process for employment verification purposes. I was dealing with one HR department that needed my last paycheck to clear first while the new HR department didn't completely have me in their systems yet. Then to learn I was switching back again made it all the more important that we hurry the papers through.

In the end we locked into a 3% rate on a 15 year fixed loan. Our total payment actually ended up being about $50 less each month - this while paying $336 less towards interest (and instead towards principal)! And of course that number just gets less/better each month.

With the new job and the refinance kicking in, we are on track to paying off our home a year earlier than expected - can't come soon enough!

Side note: it was also worth it to check on home insurance as well. After talking to a friend we were able to lower my home insurance payments by $22/month and my life insurance by $15 a month (I knew I was paying too much for that) - all for the exact same coverage. If anyone wants to check with him he's at preston@kelcoinsurance.com.

 

Posted with Blogsy

Moab Adventure

I recently took a trip to Moab to participate in an adventure race with some brothers and friends. We got down there a couple days early to "warm-up" for the race. For the most part we got pretty lucky with the weather and were able to camp each night.
Thursday's activities consisted of setting up camp, watching a video about cryptobiotic soil, and then exploring around a trail that was new to me, Tower Arch.

On our way out we took a detour and got a little lost. Our route also required some team effort in order for us all to get out safely with Matt lowering the girls to Mike, then from Mike to me, and then from there they pretended to be on a slippery slide down to where Devon would catch them. Classic!
The next morning we met up with Greg, Kellie, and Ayla for rock climbing on Wall Street- on the exact route that me and Greg started on about 8 years ago.
Our afternoon activity found us at Slick Rock to make sure our bikes and legs were sufficiently warm/worn for the race the next day...that trail never gets old to me!
The Weather Channel told us there was a 60% chance of rain during our race...and we started that morning with blue skies and a warm sun! What I didn't even consider was the relentless wind...less than an hour in and that's exactly what we got - it was sooooo hard to paddle against! Greg's fingers were frozen, Parker got hypothermia, Devon is jumping out of the kayak just to reach shore, and we saw several kayaks being blown backwards! We got through it and started the bike. I left our passport in the transition area and had to ride an extra 6 miles for the mistake. Greg and I ended up riding with Mike and Matt to try and create a peloton of sorts to deal with the heavy head wind. We were excited to finally see some dirt trails, but didn't expect it to be so technically difficult. The race website described the bike sections difficulty with a 2 out of 5 stars- should have been closer to a 4! It is an amazing trail, don't get me wrong, but too difficult for our group and time constraints. We missed the cutoff for the rappel and had to head back after our decent. In all it took us over 8 hours and at one point I hit a wall and really needed some energy/water - very draining! But we survived and had an adventure...which is what it's all about I suppose! Below is a video of some footage I've put together to summarize the race. A special thank you to Jennifer for making sure I had everything I needed, making me those amazing breakfast burritos, and otherwise supporting my addictive/expensive habit of racing with my brothers - I missed you the WHOLE time!

Debt Free - Paying off the mortgage

Many of you may already know of our goal this year of paying down our mortgage. Jennifer got me interested in blogging about our progress for two reasons - 1) it will in some small way hold us accountable, and 2) it might inspire others towards similar goals.

How we got started
One day I started to listen to Dave Ramsey's radio podcast and became familiar with his 7 Baby Steps. It was entertaining enough to hear the different callers discuss their various financial situations and how Dave would advise them. But then I took notice to the callers simply calling in to scream, "I'M DEBT FREE!" Dave would interview how and why they did it, etc. What stuck out to me is that there were several people paying off more debt than we had with less money than we make (moving more dirt with a smaller shovel)! How is this possible?! This got me to run through some calculations of what it would take if we were to really attack our debt. To make a long story not quite as long, it actually turned out to be possible. And that simple realization, that it was possible...within our grasp to pay off our mortgage completely was enough to get us excited to try.

Progress so far...

Jennifer and I feel like we really started this January. At that point we were done with updates to our property, had just paid off the last of my student loans, no car payments, no other debt...except for the house (~$192K). We paid roughly $1200 in extra principal in January and February, then with our money back from the government (tax returns) we saw the biggest drop in our mortgage today from $188K to $182K. It doesn't seem that crazy, but we figure that payment alone will save us approximately $1.8K in interest avoided!

Overall goal

We know there may be some bumps along the way, but even so, we think it is entirely probable that we pay off our mortgage completely before my 35th birthday (about 5 years from now). We put together a budget that will require some discipline (an "envelope system" methodology using Apple's Numbers app and cloud capabilities), and Jennifer continues to save with her coupons and various deals.

We'll keep you all updated from time to time on our progress. We hope that this might inspire others to become debt free as that possibility becomes more apparent.