I think it’s been waaayyyy too long since I’ve updated about our budgeting. It’s crazy to think we started this plan almost three years ago, we’ve paid off all our debt (except our house) and we are saving again for our future.
Now, it’s time to address that one except. The house. We paid off mortgage number two (15% of the value) when we were paying down our debt and had it down to only mortgage number one (which was 80% of the original price of our house, so we could avoid paying PMI.)
So, we had this mortgage for our pretty new house, and we got rid of our debt, but we had to figure out how to make it even better for us.
We discovered the good and the bad about the current housing market very quickly. The good: We could refinance our house with a much lower interest rate, so much lower that we went from a 30 year mortgage to a 15 year mortgage with not much of an increase in our payment. The bad: The value of our house dropped so much that we had to come to the table with money so that we could refinance 95% of the current value of our house (remember it was less than 80% just a few years ago). Also, we had to get Mortgage Insurance. It was a bit of a downer, but we knew it was required by the mortgage company. Fortunately, because of the way we refinanced, we paid all of the PMI upfront, so we don’t have to worry about it again.
And now? Our house will be paid off right around the time our oldest goes to college! I don’t think there are many people that can say they purchased a house in their 20s and it will be paid off before they are 45! That’s our plan and while it was a little crazy, we are so happy we did it. We are teaching our girls about budgeting, money and responsibility. And, the best way to teach them is by example.
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