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$, Mortgages and Having a Life

$, Mortagages and Having a Life

  • Grin and Bear it, you have nothing to complain about.

    Votes: 0 0.0%
  • If you can get a lower rate, take it.

    Votes: 9 90.0%
  • Enjoy life now, go for more money in your pocket!

    Votes: 1 10.0%

  • Total voters
    10
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jmf

Cyburbian
Messages
594
Points
17
OK, I have written about this before but am wondering, what would you do?

We have a mortgage, at this point we are getting by but we have little money to do fun things with ie visiting friends in other places; buying another kayak. Then there are the expenses which right now seem impossible: new car to replace my '97 Golf with 250,000km and money for retirement (RRSP, I don't know the US equivalent). Then if we consider thinking about maybe having a child (is that iffy enough), I think we will be in way over our heads.

So, we can
1) grin and bear it until late 2005 when our first term is up.

2) keep the same amortization period (10 years left now) and have a slightly lower payment (about $15) biweekly by getting a lower interest rate (by 1%) now (no penalty)

or

3) switch to a longer amortization period (12 or 15 years) and a lower interest rate (by 1%) and save from $60 to $110 biweekly (still no penalty)

Any comments, suggestions, harassment?
 

jmf

Cyburbian
Messages
594
Points
17
One should never ask a lady her age, but since we're all friends here, I am just north of 30.

I think we will keep the house for a long time although my husband works for a big company and maybe moved to the US or abroad for 1-3 years. We would probably try to rent the house if we went away.
 

donk

Cyburbian
Messages
6,970
Points
29
It depends on how close to the line you are living.

If you change the amortization to a longer time period you'll end up paying out more in total then with a short loan, but may end up living a higher quality of life during that time. I would only change if the amount of money was going to be significant. (60-100 every 2 weeks, but not for 15) so that you can enjoy life more. You'll need to be saving up for the road trip to DC next spring.

Also keep in mind that rates are on the increase, you will probably be better off redoing your mortgage now then in 2 years, especially if it is penalty free.

I'm spoiled on this topic, mortgage payment of less then $200/ month and only 15 more payments until the house is all mine.

The US equivalent to an RRSP appears to be a 401(k)
 

Chet

Cyburbian Emeritus
Messages
10,624
Points
33
Your poll might be over simplified, so I didn't respond. Do you have an emergency fund?

I would probably say refinance at lower rate and longer term, save the $60-$110 / bi-weekly until you have a comfortable cushion, then if your circumstances warrent in the future see about refinancing again to a short term higher pmt.
 

Tranplanner

maudit anglais
Messages
7,903
Points
34
Yeah, I agree with Donk...if you can renegotiate now, I'd go for it. You're either paying now or paying later - so take your pick I guess. I just wish I had the $$ saved up for a downpayment right now - by the time I do, interest rates will probably be quite a bit higher.
 
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