Anyone with mortgage debt? Ideas?

iVillage Member
Registered: 12-12-2004
Anyone with mortgage debt? Ideas?
10
Fri, 06-24-2005 - 12:47am
Hi, everyone. Anyone with huge mortgages? 30-yr? Over 300K? Want to pay off in 10-15 yrs, but cannot afford $4,000/month. Someone told me it is better to start saving for retirement and emergency savings rather than put extra toward mortgage, especially if you want to sell eventually. I'd personally rather pay off cc debts and cars and start a savings cushion. Any thoughts? THanks. Whiz.
Avatar for cl_phocid
iVillage Member
Registered: 03-26-2003
Fri, 06-24-2005 - 12:56am

Hey Whiz - I guess I fall into this category, though truth be told the mortgage is so far down on my list of things I'm worrying about paying off.

All my best,
Danni

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Registered: 12-12-2004
Fri, 06-24-2005 - 1:25am
Hi, Danni: Thanks for the info. on the extra mortgage payment. I dont want to (again!) refinance and get stuck in a 15 yr have-to situation. I mean, what if someone gets sick or laid off, then you are stuck with the higher payments. What you said makes sense--pay off the credit cards, and then start putting extra on the mortgage or other things. What about extra accounts for unexpected expenses, such as car repairs, or toward remodeling? Right now, I have a savings account (which I raid!) and a credit union account, and the checking/debit. Should I open another savings account? WHiz.
Avatar for cl_phocid
iVillage Member
Registered: 03-26-2003
Fri, 06-24-2005 - 1:44am

Hey Whiz - I'm a bit OCD with savings accts.

All my best,
Danni

iVillage Member
Registered: 04-02-2003
Fri, 06-24-2005 - 4:07am
I am not the best person to speak to about money but related issues but, I'd have to agree with everyone else you have spoken with. If you can send just a little extra toward you mortgage ever month I know that it will help and you can also think about it this way if you pay if off quicker you will no longer have a large tax write off at the end of the year. So try and carry a mortgage whenever you have a home whether small or large. We have friends that have their mortgage automatically deducted from their checking account bi-weekly. They were telling us that at the end their home will be paid off in 20 years and they will have saved 80,000, so it may be something to look into.
I hope it works out, please keep us posted.
-Cindy
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Registered: 08-19-2003
Fri, 06-24-2005 - 10:31am

We currently still owe $235,000 on our house for another 29 years. I think my plan of action will be as follows...

1. Pay off all credit card, medical, & auto debt. (Currently $15560, plus $3500 for auto loan next payment due 6/07)
2. Build a $10,000 Emergency Fund.
3. Contribute at least $400 a month to our Roth IRAS & DH's 401K.
4. Pay at least $100 extra on mortgage a month.
5. Set up savings accounts & weekly payroll deductions for budgeted vacations, auto costs, medical Rx & copays, home improvements.
6. Replace Kitchen.
7. Pay down mortgage as fast as we can.

I think this is my plan not sure how long it will take us though...

Shannon

Shannon


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Registered: 12-12-2004
Fri, 06-24-2005 - 12:37pm

Hi, Danni--Thanks for explaining everything. Here's what I have done: l) The credit union account will be my "emergency" fund. Just opened it. $500 balance. $200/month so far. Can't get to it easily. How much more should I put in each month? How do you figure out the 6 month cushion you should have? Add up salaries? (in case of job loss?) Add mortgage payment on top of that? 2)TSA--$14,000 yr max contribution.(no match). Balance after 4 yrs: $65,000. Between $900-$1100 every two weeks. 3) 457B plan. Opened last yr. $400/month. Just found out I can do salary reduction and do the same thing--max $14,000/yr. This saved on income tax last yr. May plan to increase it. 4) Roth IRA: $200/month. Yes, I know it is underfunded, but this is what I set up. 5) Savings account. What savings account?! Never mind. Balance: $136.57! 6) Social Insecurity Info: Sent away for the statement for me. What an eye-opener! I'll need to work till I'm 80. 7)Got on websites on how to get to $1,000,000. Would need to save $4,000/month. For 12 yrs. DH and I are at a disadvantage, because we are playing catchup.

I like the idea of another savings account, but I think I will set up the savings account so that I cant withdraw from it. Plan to go to bank today to do that! Q--Did anyone ever have a Christmas Club account? My GF swears by it (she has two teens) and says it comes in handy at holidays. Any thoughts? Thanks. WHiz.

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Registered: 12-12-2004
Fri, 06-24-2005 - 12:49pm
Hi, Cindy--thanks for the mortgage info. Bi-monthly payments? Is it more expensive to do that? Saving $80,000 off the life of the mortgage has my undivided attention. Here's our mortgage scenario: It is a 30-yr adjustable(!) at 4.785% interest. There are several options. l) pay minimum. 2) Full interest. 3) P&I 4) 15-yr. There's nothing on there for bi-monthly. I have been reading about the real-estate bubble that is going to burst soon, and I know friends who have lavish houses, $4000-$5000/month mortgage payments, and are just paying the interest only. I do not want to be in that mess. How does paying bi-monthly save on the loan? Thanks. WHiz.
Avatar for cl_phocid
iVillage Member
Registered: 03-26-2003
Fri, 06-24-2005 - 2:13pm

Hey whiz - first of all - I wanted to point out something about the retirement funds.

All my best,
Danni

iVillage Member
Registered: 04-02-2003
Fri, 06-24-2005 - 9:10pm
Hi, well I have not used that option but friends of ours do, we will be having dinner with them tomorrow night and I will find out for you. I do remember her telling me to call the bank that holds the mortgage and find out if they offer it.
I will get back to you when I know the details.
Talk to you soon,
-Cindy
iVillage Member
Registered: 11-14-2003
Sat, 06-25-2005 - 7:50am

Hi, new here, but we are re-financing our mortgage to Bi-weekly payments


What it is you pay 1/2 of your monthly mortgage every other week.

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