Ms. Money Savvy » Mortgage

Mortgage Update

savvy — Fri, 16 Jul 2010 22:01:19 +0000

Less than a week after I submitted our refi application online, the appraisal company called to set an appointment. They came out a few days later. The appraisal was completed in under a week. Unfortunately, the appraisal came in a bit higher than we needed it to. However, I did notice some errors (fence and sprinkler system weren’t included) and one of the ‘comp’ houses was not really comparable since it doesn’t have a basement. I submitted a dispute form and will hear back from them next week.

In other news, Mr. Savvy bought me Rosetta Stone. Yay! I’ve been waiting to learn Spanish for years so I’m glad he bought it. He purchased levels 1-5 so I know it wasn’t cheap but I’m not going to worry about it because it’s been on the list of ’stuff I want’ for quite a while. When’s the last time you splurged on something you really wanted?

The Mortgage Process Continues

savvy — Sun, 04 Jul 2010 12:26:09 +0000

Well, this past week I’ve faxed and e-mailed numerous forms to PenFed for our refi application. The appraiser came on Thursday and said his report should be completed his coming week. I must admit that’s the part I’m most nervous about. Like a lot of people, our house is worth less than we paid for it in 2006. The question is how much less. I guess we’ll know soon.

Happy Independence Day!

What’s Next

savvy — Thu, 24 Jun 2010 19:32:13 +0000

I’ve pretty much given up on trying to reduce our expenses. We’re fortunate to be able to save a lot of money in addition to meeting our obligations so I’ve decided not to worrry about it. However, I am concerned about debt reduction, specifically our mortgage. I want Mr. Savvy and I to be able to retire in a little less than 17 years. However, I refuse to retire with a mortgage. Housing is most people’s largest expense. Once that expense is removed, the amount you need to live vastly decreases.

We bought our current home in 2006 so we’re only four years into a 30 year mortgage. While we’ve been putting a little extra to the mortgage every month, lowering the interest rate will make a big difference. So we decided to refinance. However, like most people, the housing values in our area have dropped. There are two foreclosures in our neighborhood, one right next door to us. I’m sure that our house isn’t worth what we paid for it. We don’t plan to move so that isn’t a major concern. The issue is how much less. Based on my estimates, we’ll be subject to PMI if we refinance but I’ve crunched the numbers and it’s still worth it financially. That said, the next few posts will be a timeline of our refinance process.

While we’re members of a local credit union, I’ve heard great things about PenFed. Their rates/terms beat our credit and the closing costs are lower so we decided to apply with them. Tuesday evening after work, I went online and completed a membership application. There was a slight glitch with the website but I was able to call and immediately get it resolved (even though it was probably well after 7pm). Next I completed the mortgage application. It asked the usual questions – loan amount, income, assets – and didn’t take long to complete.

Yesterday I received what appeared to be a form email from PenFed stating that they’d received our application but due to the large volume, refis are currently taking 45-60 days. It went on to say that a loan officer would call us but not to call them until that time. Based on that, I didn’t expect to hear from anyone anytime soon but that’s not a problem for us.

Imagine my surprise when I received a call from a loan officer this afternoon. She said that she’d reviewed our application and everything looked good. I expected that would be the case because our only debt other than the mortgage is my student loan, which is currently in deferment since I’m in school. We have a good income, good credit and a low debt to income ratio. She said she’d be e-mailing some forms that we need to sign and return. She also confirmed that we’d locked in the rate, would be using them for escrow and were paying closing costs from our savings (vs rolling into the loan).

Hopefully the rest of the process will be as quick and easy. Has anyone else refinanced their mortgage lately?

Almost There!

savvy — Fri, 07 May 2010 14:51:03 +0000

photo credit: dview.us

I’m so close I can taste it. Today is payday so I sent a chunk of money to the car loan. God willing, I should make the last payment in two weeks. Though I haven’t been as good as I could be (still don’t bring my lunch to work), I’ve done a pretty good job of eliminating frivolous spending.

As soon as the loan is paid, I will restart automatic transfers to my IRA. In addition, I’ll set up an auto transfer to a ‘car fund’. My car is only six years old and has low miles so I’m not planning to buy another one for at least four years. However, it would be nice to pay for the next car with cash. The only problem is that I hate letting savings (other than our emergency fund) accumulate. I always think the money would be better used to accelerate our mortgage payments. One of my goals/criteria for early retirement is to have the house paid off. It’s much easier to retire when your expenses are low. How do you balance savings vs debt repayment?

Happy New Year

savvy — Sat, 02 Jan 2010 16:00:02 +0000

photo credit: jurvetson

Happy New Year to everyone! The partying is over and now it’s time to head back into reality. I start back at work and school on Monday. I didn’t make any resolutions but I do have a few financial goals for 2010. Unfortunately, I may be stymied by the fact that our bills are increasing. I got a notice from our mortgage company that our escrow payment is going up ~$110/month! This is because both our property tax and insurance have gone up. Bleh. Next, we got a notice from DirecTV that they’re raising their prices. I asked Mr. Savvy to call and cancel some of our services but I think he’s addicted.

That said, my first goal for this year is to finish maxing out my IRA for 2009. I’ve contributed $2000 thus far so I need to contribute another $3000 prior to April 15th. I could have accomplished this already if we hadn’t gone on so many trips this year but such is life. Next up is to have my car paid off by June 30th. When I bought the car, my goal was to pay off the loan as aggressively as possible but I was a bad girl and life/fun got in the way. We’ve taken numerous trips, built a patio in the backyard, bought dining room furniture, etc. Those are the only two goals I’m going to set for now because those are most important to me. Once I get the car paid off, I’ll set some new goals. I’ll also be adding some graphs to the sidebar to get up with my progress. What are your financial goals for this year?

Stupid Money Tricks

savvy — Mon, 07 Dec 2009 21:47:15 +0000

photo credit: goto10

In my zeal to get rid of all my ‘excess’ bank accounts, I forgot one small detail…the mortgage comes out of the ING checking account. I had already transferred all the money out when the December payment posted, or at least tried to post. Of course, ING rejected the payment and sent me an e-mail. When I get home tonight, I’ll log on to the mortgage site and see what the damage is. I’m pretty sure it will be at least $25 for a returned payment. Doh!

Have you made any stupid money mistakes lately?

Nothing Much

savvy — Tue, 07 Apr 2009 19:32:56 +0000

I forgot to announce the winner of last week’s book giveaway! Product Junkie Diva, please e-mail me with your mailing address.

Tax season can be somewhat busy for me. In addition, I recently returned from a long weekend of skiing. Therefore, I haven’t been doing much with my personal finances. I have noticed that mortgage rates are still decreasing though. A refi is so tempting.

That said, I promise to get back on the bandwagon soon. If you haven’t filed your taxes yet, you only have eight more days so hop to it!

No Go on the Refi

savvy — Mon, 22 Dec 2008 14:40:58 +0000

Well I talked to our credit union loan officer on Friday afternoon. She said they (the credit union) are not writing many loans for more than 90% LTV. In addition, she stated that since we bought our house only two years ago, it would most likely appraise for ~$20K less than we paid for it. Therefore, she advised against making an application.

She stated that since we have a relatively good interest rate (5.8%), we should just keep doing what we’re doing, which is paying a little extra to the mortgage each month. I was a little disappointed because I would have loved to lower our interest rate. However, we’re still on track to meet our goal of having the mortgage paid off much sooner than the term of the loan. So we’ll stay the course for now and re-evaluate our loan again in the future.
photo credit: honorfoto

Time to refi?

savvy — Thu, 18 Dec 2008 19:42:57 +0000

photo credit: woodleywonderworks

Mortgage rates are dropping like crazy. We’re a little over two years into a thirty year mortgage. I see that our credit union has a twenty year loan for only 4.875%. Needless to say, I’ve already put in a call to one of the loan officers. My only concern is PMI because we don’t have 80% equity yet.

Nevertheless, I’m eagerly awaiting the loan officer’s call. It’s always been our plan to have the mortgage paid off in 20 years or less. Getting a shorter term and a lower interest rate will definitely further that goal.

Are any of you thinking about refinancing?

What NOT to Do When the Economy Is Bad

savvy — Tue, 23 Sep 2008 20:05:28 +0000

photo credit: Mike Licht, NotionsCapital.com

Yeah, the economy is bad right now. It’s been on the news for months and most everyone is feeling it, either in their pockets or investment accounts. So here are a few tips on what NOT to do in this sluggish economy.

Live off your credit cards – It’s really essential now to put the cards away. Your focus should be on establishing cash reserves and reducing any existing debt. Take your credit cards out of your wallet so you won’t be tempted. If necessary, freeze them in a bowl of water in the freezer.
Raid your retirement – Withdrawing retirement funds is a permanent fix to a temporary situation. In addition to pay penalties and taxes, you will miss out on years of compounding. That $10K you withdraw today could have been as much as $100K at retirement.
Tapping your home equity – Even if someone will give you a home equity loan in this market, it’s still a bad idea. There’s no indication the decline in housing prices will stop anytime soon and you don’t want to be stuck owing more than your house is worth.

Have you changed your spending or investing habits in this economy?