I kept thinking today about what I could post on for my WFMW post this week. I had just about decided not to post when I came across the Financial Shape in 2008 Challenge over at Money Saving Mom. I think I am going to try doing the challenge this year. As I thought about this, I got to thinking about what we do that could help others. One of the biggest things I am proud of financially is how we pay on our house.
We bought our house 4 1/2 years ago. We accidentally got one payment ahead because I did not know that we did not have to make a payment the first month since we had just done all of the closing costs and such. Afraid of starting off late, I went ahead and made the payment. When I realized that we were ahead, I just kept it that way. I thought it would be a good buffer in case we ever had a big unexpected expense some day and needed some extra money. Then, we would have one month where we did not have to pay the house payment. This has happened a couple of times in the past. Each time, we saved up the money to get back a month ahead as soon as possible.
We also pay ~$50-$60 extra on our payment each month that goes directly to principal. If something happens and we can't do it one month, we don't worry about it. But we honestly don't miss it. We would spend that much on something frivolous instead, anyway.
By doing those two things, we have knocked off 27 payments on our 30 year mortgage! That's right! Over 2 years in only 4 1/2 years of paying!
That's what works for me. Head over to Shannon's for more tips.
A Slow Cooker Thanksgiving
4 weeks ago
8 comments:
That is so awesome! What a great idea to have an extra payment on the house. I usually have extra money on our utilities, because I send them what I budget vs. the actual bill. Once we get out of Credit Card debt I had planned on making extra payments each month. But I had never thought about making an extra monthly payment. I will have to keep that in mind.
Be sure to check the details of your mortgage. Some loans have a penalty for early payment. As ridiculous as that sounds, you should look into it just in case. And if so, I'd suggest finding a different lender.
But being one month ahead has come in handy when we've had a tight month come up, or unexpected expenses, to be able to say, "know what, let's skip the house payment."
That's fantastic! Now: How do you go about getting a house in the first place? It feels like we'll be renting for the rest of our lives.
Nichole,
We struggled with the same thing at first.
Here are a couple of things that helped. First, we moved outside of town. The market was cheaper in the smaller towns outside of Columbia. So, you might look outside the main area and be willing to drive a little way.
Secondly, we bought an older house that needed a little bit of work done on it. We did not need a lot of room and were willing to put in some elbow grease.
When you combine those two things, we were able to get a house with a payment only ~$25 more per month than our rent was. How awesome is that?!
I hope that helps.
That is awesome! If we ever get into the position of being able to buy I would love to know that I won't end up paying quite so much interest to the bank for the privilege of a 30 yr mortgage. Just reading this has spurred me on that much more to try make it happen. Thanks for the pick me up!
I feel you Nichole. I HATED renting, which is the first step. In the end, it's a huge leap in responsibility (no landlord to come fix _______), investment and stress in the beginning. But it's well worth in in my opinion. On the bright side, you no longer have to wait on a slow landlord, the investment is in YOU, and not your lessor, and no more shared walls! You can watch movies as loud as you want.
Go for it! Just make sure you have a good inspector that you can trust, and read the fine print at the mortgage company - they can be sneaky.
Tiffany,
Don't worry about sticking to a recipe. I was the same way for years! It was only after watching people like Rachael Ray and Giada de Laurentis on FoodNetwork that I really got comfortable cooking without being so strict.
You do exactly what my husband and I do with our mortgage. It is great to know that you can cut time off your mortgage as long as you do not have a prepayment penalty.
I hope you are feeling better! I hope your little one has not gotten sick.
Blessings,
Vickie@PursuingSimplicity
Great tip, thanks for sharing. Thanks also for commenting on my WFMW post. Stop by again any time!
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