I bought a house!

[morfiend]

Serenity,


  Do yourself a favour,check with the bank on mortgage payments,I'm assuming you have a mortgage.  If you can pay the mortgage weekly or biweekly!  The first month can be tough because you have to pay the mortgage and then start the weekly or biweekly payments.

  What this will do is reduce the amortization length considerably,as 25 year term can be reduced to 16 or 17 years and that will save you thousands of dollars! Also most mortgages allow you to make an anniversary payment of upto 10%,while most wont have that amount of cash on hand,you can still put even just a 1000 dollars against the prime!   Again this will reduce the amortization length greatly.


   I managed to drop a 25 year term down to 13 years doing this and do to a small inheritance I was able to pay it off in 8 years,it was sub 20 grand inheritance but we put it towards the mortgage on 2 anniversary dates.


  My estimate is I saved about 200,000 dollars in total payments,I now make those payments into my own savings and investments!


  YMMV.



    

[Serenity]

Serenity,


  Do yourself a favour,check with the bank on mortgage payments,I'm assuming you have a mortgage.  If you can pay the mortgage weekly or biweekly!  The first month can be tough because you have to pay the mortgage and then start the weekly or biweekly payments.

  What this will do is reduce the amortization length considerably,as 25 year term can be reduced to 16 or 17 years and that will save you thousands of dollars! Also most mortgages allow you to make an anniversary payment of upto 10%,while most wont have that amount of cash on hand,you can still put even just a 1000 dollars against the prime!   Again this will reduce the amortization length greatly.


   I managed to drop a 25 year term down to 13 years doing this and do to a small inheritance I was able to pay it off in 8 years,it was sub 20 grand inheritance but we put it towards the mortgage on 2 anniversary dates.


  My estimate is I saved about 200,000 dollars in total payments,I now make those payments into my own savings and investments!


  YMMV.



    

Huh... I'm not sure I completely understand the difference between monthly and weekly. Would I still be making the same payment amount? Or would that being going up considerably as well?

Who nice collection of bow cases there! Show me what you got!! I just got a brand new PSE

Nice crib btw!

Thanks! And not bows, rifles

'Couple SKSs, 'Couple M-44s, 91/59, Garand, AR-15, AR-10, M39, etc...

[Dragon]

Huh... I'm not sure I completely understand the difference between monthly and weekly. Would I still be making the same payment amount? Or would that being going up considerably as well?

Congrats!!


Normally it is similar to the monthly payment divided into 2 equal payments.  If your monthly payment is $985, it gets totaled to $11,820 then divided by 26 to make bi-weekly payments of $454.62 each.  Rounding it up to $460 per payment just chews away at the principal and lowers your interest further.

[morfiend]

 When you pay weekly or bi weekly you pay the exact same amount as you would monthly,only it's split up in 4 payments. Say you have a 1000 dollar a month mortgage,first you have to pay the monthly payment of 1000 dollars,then you must pay 250 dollars for the first weekly payment so the first month you do this can be tough as you end up making 2 payments that month but once past that it's just 250 per week.

  The key to this is how the bank charges interest on the loan,now as a US citizen you may have tax benefits from the interest paid so I would consult an accountant to be sure you get the best benefits. In Canada we cant deduct the interest paid so it's in our best interest..pun intended... to pay off the mortgage asap!

   As I said I brought the amortization term down from 25 years to 13 so I saved 12 years of payments,you only pay a small amount on the prime, about 90% of each payment is just the interest calculated on the loan over the amortization length.

  A 100,000 dollar home will cost over 300,000 in payment over a 20 year term!this is at about 5% give or take.




    

[Serenity]

When you pay weekly or bi weekly you pay the exact same amount as you would monthly,only it's split up in 4 payments. Say you have a 1000 dollar a month mortgage,first you have to pay the monthly payment of 1000 dollars,then you must pay 250 dollars for the first weekly payment so the first month you do this can be tough as you end up making 2 payments that month but once past that it's just 250 per week.

  The key to this is how the bank charges interest on the loan,now as a US citizen you may have tax benefits from the interest paid so I would consult an accountant to be sure you get the best benefits. In Canada we cant deduct the interest paid so it's in our best interest..pun intended... to pay off the mortgage asap!

   As I said I brought the amortization term down from 25 years to 13 so I saved 12 years of payments,you only pay a small amount on the prime, about 90% of each payment is just the interest calculated on the loan over the amortization length.

  A 100,000 dollar home will cost over 300,000 in payment over a 20 year term!this is at about 5% give or take.




    

Very interesting! I'll have to investigate this further!

[Getback]

Awesome! That pipe may be a vent for the plumbing.

[pembquist]

More gratuitous advice. If you have a fixed rate mortgage based on this house being your primary residence than the interest rate should be very low. You may not want to pay it off any faster than you have too as it is very cheap money. When you convert the house to a rental the interest expense comes off your income on the front of the form and is not part of either a standard or itemized deduction. It often makes much more sense to take money that you would be using to make extra principal payments and put it into retirement accounts where it will be tax deferred or tax free and safer from financial disaster than a paid off house. Remember that extra principal payments are paid with after tax money not gross rental income.

Just something for you to consider.

[scott66]

Congrats bud!! Where are you going to put the cockpit Size simulator cage for AH? With the 10 foot projector screen..

[DREDIOCK]

Another great idea! Man, y'all are fantastic! (And I can see my budget drying up as I type lol)

Hey. No problem. We have no problem spending your money. And we're good at it too!

[Serenity]

More gratuitous advice. If you have a fixed rate mortgage based on this house being your primary residence than the interest rate should be very low. You may not want to pay it off any faster than you have too as it is very cheap money. When you convert the house to a rental the interest expense comes off your income on the front of the form and is not part of either a standard or itemized deduction. It often makes much more sense to take money that you would be using to make extra principal payments and put it into retirement accounts where it will be tax deferred or tax free and safer from financial disaster than a paid off house. Remember that extra principal payments are paid with after tax money not gross rental income.

Just something for you to consider.

Definitely another thing to consider! I really appreciate the financial feedback folks, since this is my first. At the moment, I'm on track to stay at Milton for Primary, and IFS won't likely start before January, so I may have up to a year before I convert this to a rental, so just enough time to plan!

[MrRiplEy[H]]

Awesome! That pipe may be a vent for the plumbing.

(New houseowner) Hmm what is that pipe on my lawn...

A few weeks pass

(New houseowner) Hmm what is that truck that visits the neighbors lawns every few weeks? Gee that must be expensive!

A week passes

(New houseowner) Hmm why is there that foul smell on my yard?

A day passes

(New houseowner) Hmm why is my toilet overflowing when I flush it?
(New houseowner) <insert Eddie Murphy Jewish imitation here> Achaaa!

[Serenity]

(New houseowner) Hmm what is that pipe on my lawn...

A few weeks pass

(New houseowner) Hmm what is that truck that visits the neighbors lawns every few weeks? Gee that must be expensive!

A week passes

(New houseowner) Hmm why is there that foul smell on my yard?

A day passes

(New houseowner) Hmm why is my toilet overflowing when I flush it?
(New houseowner) <insert Eddie Murphy Jewish imitation here> Achaaa!

(Image removed from quote.)

It can't be septic... I mean, it CAN, but the house is hooked up to a public sewer system.

[Hetzer7]

It can't be septic... I mean, it CAN, but the house is hooked up to a public sewer system.

It is, theres a 4" pipe that runs from your house to the public sewer pipe that typically runs down the center of the street. For certain thats the clean-out drain that goes down to your 4" sewer pipe. Also, the 4" sewer pipe almost always runs downslope at an angle to the public sewer pipe, it does not join it at a right angle. This way it keeps the flow of the sewage in the public pipe going one direction.

<S> Hetz

[MrRiplEy[H]]

It can't be septic... I mean, it CAN, but the house is hooked up to a public sewer system.

If you're hooked up then you won't have to worry about emptying the tank. So that pipe must be some inspection/cleaning or ventillation hatch.

[mbailey]

It is, theres a 4" pipe that runs from your house to the public sewer pipe that typically runs down the center of the street. For certain thats the clean-out drain that goes down to your 4" sewer pipe. Also, the 4" sewer pipe almost always runs downslope at an angle to the public sewer pipe, it does not join it at a right angle. This way it keeps the flow of the sewage in the public pipe going one direction.

<S> Hetz

Former Construction guy here/ Large Loss Property adjuster now..........Yep, its a cleanout for the sewer lateral that leaves the house and runs to the street. By the looks of it...its a fairly new one, they use to be made from cast iron.....It leads me to believe that at some time there was an issue with the lateral that leaves the house, and repairs were done to it.....which again is a good thing, because having to jack hammer the sewer lateral out of the concrete inside your home if it collapses can be a messy nightmare......the cast iron pipes would react over time with the lime in the concrete and it would speed up the deterioration of the pipe.....also happens with copper lines that are run thru concrete.....many times you dont know you have a problem until your water bill is off the wall...or the broken lateral has washed out so much soil under your slab that it starts to crack. Then again it may have only been repaired in the yard, in which case your lateral is still the same one in the home. I say that because your home is very similar to "Levittown" type construction we have here in PA....and I dont see any signs of a basement where the lateral would be located.....

Hey Serenity, if you ever have any questions regarding homeowners insurance / claims and such, dont hesitate to give me a shout.....Ive helped a few guys here who had questions on their homeowners claims/policy with good results.