Category Archive: Mortgage

We Found The Perfect House For Us

Four years ago, my wife and I purchased a new home.  With three kids, we needed a place that was big enough for a family of five, close to work, and within our budget.  Here’s how we found the perfect house for our family –

First, we looked for a house located within reasonable driving-distance from where we worked.  There are several neighborhoods in our area, but we managed to narrow our list down to a top five.

Second, we each jotted down a few must-haves and would-likes – to create the list- the things we were looking for in our new home –

Must-Haves:

a quiet neighborhood with paved streets

four bedrooms

two bathrrooms

a two-car garage

space for a workshop

outdoor space for the kids to play

paved drive

trash pick- up  (If you have lived in the country, like me, you’ll get this one!)

less than 10 years old

municipal water / sewer

   Would-Likes:

front porch

covered back porch

workshop / shed

area for a garden

tall ceilings

extra-large closets / plenty of storage

tank-less water-heater

With our budget, our top five neighborhoods, and the list – we began our search –

house-48818_640

We started online – using sites like zillow and realtor – and we also searched the local papers and spoke with friends.  We walked through several homes – and drove by dozens more – but none of them met all of our criteria.

We searched for several weeks, driving through our preferred neighborhoods, checking with local realtors, and talking with friends.  We were beginning to feel like we would have to change either our budget or the list – but then, it happened.

We stumbled upon our perfect house – our home.

We were driving through one of our preferred neighborhoods, checking on a house that I had found online.  We decided to take an alternate route, a road we rarely used.

My wife spotted the “for sale” sign.

I pulled into the driveway – and we knew.

I dialed the number and scheduled a walk-through.  The house had almost everything on the list – and it was within our budget.  We were so excited, but we knew that finding the house – and finalizing its purchase – were two entirely different things.

Thankfully, i only took a few weeks, to negotiate the final price and sign all of the paperwork.  Four years late, we are thrilled with our decision.  The kids love the place and we couldn’t be any happier.  I’m glad that we created the list and stuck with our budget – and I’m thankful we took that road, that day, to this house.  Now – to pay if off in less than 10 years!

Side note – For those interested, we got almost everything we wanted on the list – except for the covered back porch and the workshop.  For now, my shed will serve as a workshop – and my next project is to put a roof over the back porch.  Also, I added gutters to the house, which were not on our list, but should have been!  (Sounds like an idea for a future post….)  Blessings.

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We Bought The House We Could Afford

Four years ago, my wife and I began to search for a new home.  Our family had grown and we were looking for a new place to live – our home for the next 20+ years.

Before looking for our new home, we spent several months saving up enough money for a down-payment.  Our goal was to avoid PMI – private mortgage insurance.  Once we had saved up our down-payment, we began the process of looking for our new house.

We set a budget – a desired purchase price and a desired monthly payment amount.  We began our search with these numbers in mind – and fixed.

One of the things I was concerned about was qualifying for a mortgage.  We had never been through the process before – and were a little apprehensive.  Our credit scores were fine and we were debt free, but the housing market was in an odd place.  So, we placed a few calls with some local mortgage companies and did some research on the internet – and we were amazed.

We not only qualified for the amount of money we needed to purchase the home – we qualified for more than we needed.  Much more.

We had a decision to make – to stick with our original plan – or to look at bigger, more expensive homes.

We live in a rural area where home prices are relatively stable and reasonable.  The amount we qualified for would have allowed for us to finance a very nice home – but we would have quickly become house-poor.  The monthly mortgage payment would have really put a strain on our budget.

afford a mortgage

Instead of focusing on the amount for which we had been approved – we stuck to our budget.  We purchased a home that we could both afford – and enjoy.

We love our home.  It’s not fancy, but it’s in a nice, quiet neighborhood.  Our kids love it and we are blessed to have it.  Our goal is to pay it off in less than 15 years – 10 would be better – and we’re thankful that we maintained level heads and purchased within our means.

As I look back, it would have been fun, on some level, to look at those much bigger, much more expensive homes.  As I look forward, I’m thankful that we stuck to our plan, stuck to our budget, and chose the home that we did.  Blessings.

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Paying Off Our Mortgage Progress With Chart November 2014

My family and I have lived in our current home for almost 5 years.  We are working hard – paying off our 15-year, conventional mortgage.

I use a simple pie-chart to track our progress.  Having a visualization keeps us motivated and excited about the progress we are making.

We purchased our home in February of 2010.  Hopefully, we’ll pay it off in less than 10 years – which is our stretch goal – but as of right now, we have shaved 6 months off of the length of the loan.  Our progress was slowed, just a bit, when I changed jobs, but we are back – on-track – making principal-only payments on a regular basis.

Here’s a chart with details for our current progress –

mortgage payoff chart

The percentages above represent the amount of our mortgage we have paid – 27.25% – and the amount we still owe – 72.75%.

Each month, we make our scheduled mortgage payment, plus an additional principal-only payment.  (Some months, we make more than one principal-only payment.)

Keep in mind, this chart doesn’t represent our equity – it represents that amount we owe on our mortgage.

This month marks a bit of a milestone – In less than 5 years, we have paid off more than 25 percent of our mortgage!  That’s pretty cool.

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How We Are Paying Off Our Mortgage

We have a 15-year fixed-rate home mortgage – and we are working hard to pay it off in less than 10 years.

We purchased our home in February of 2010.  The original mortgage term of our our loan was 180 months, with the loan due to be paid off in March of 2025.  So far, we have whittled away 7 months from that date.

Here’s what we do –

Each month we make our monthly mortgage payment.  We do so via an auto-draft from our online banking account.

Then, we make an extra, principal-only payment.  We write (type) the words “apply to principal” in the memo section of the check.  Our mortgage company knows to apply this payment towards our principal – and to not treat it as a prepayment for the next month.

(Once in a while, we will combine these payments into a single check – or withdrawal from online banking – but I prefer 2 separate transactions, so that I can more easily keep track of our extra payments.)

Throughout the month, should we make any extra money – or find that we do not spend any budgeted funds – we’ll take that money an send it to our mortgage company, as an additional principal-only payment.  Often, we’ll have months where we send 2 or even 3 principal-only payments.

ncnblog mortgage

I have seen all kinds of formulas for reducing a mortgage, including bi-monthly payments, or adding an extra payment at the end of the year.  These definitely work – but for us – our simple system works.  We make our payment – then we make a principal-only payment (usually just a few dollars) – then we work hard to make (or save) extra throughout the month – and we send that.

Our approach is hands-on and keeps us focused on this long-term goal.  (We are paying off our mortgage in addition to saving for retirement and kids’ college.)  Blessings.

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