Mortgage Monday: The Checks Start Now

With payment book from the bank in hand, the first of our many mortgage payments is due this week. While 30 years is a long time to be making payments at least we now find ourselves with an end date and with every payment we own a little bit more of our home. Of course, we hope that it doesn’t take us 30 years to clear this debt, at least this is the goal, so we are going to be sure to pay a little bit more each month toward principal.

Having already made an early payment it is a little disconcerting at first seeing the principal reduced by so little with every check. But, again, it is still giving us more equity each month compared to the simple evaporation of funds that we have experienced over the last several years. Now that is a disheartening number to think about. Even if your average monthly rent was $1200, over the course of five years you will have ended up paying $72,000 and have absolutely nothing to show for it. In the end, given the places that we have lived and the years that we have been renting, it is safe to say that our total is probably just north of $100,000. Seeing that principal going down by so little doesn’t seem that bad anymore.

Of course, now with us owning our home, we are also responsible for the maintenance of the house and surrounding property. A few other expenses should be expected and even with major repairs, it is still better than renting… and more cost effective given the amount of space that we now have. Each check brings us a little closer to what continues to be our goal… being debt free. While credit cards were the culprit in the past, at least now the debt is something tangible and something worthwhile.

And I will finish with this simple notion that seems to no longer be simple. While it is nice if our house increases in value over the years, all I want is the stability. If the value of the property were to stay the same I would be happy in the end. What is now seen as investment should be, once again, seen first and foremost as a home. That is how things used to be and how I view our new home. Paying interest is the price of being able to buy a home and have that stability. Our limited funds are now being applied toward a goal, something of value, and stability unlike the month to month uncertainty of the past. Now, each month, we can settle a little bit more.

Mortgage Monday: No More Rent

Since we’ve been together, my wife and I have always written a rent check every month. The amounts may have varied over the years but the one thing that remained constant was the fact that we didn’t own the place in which we lived. It is a rather disconcerting notion when, at the end of the year, you look back and see all of the money that you gave to someone else without having anything really to show for it. It is primarily because of this that we have been wanting to buy a place of our own for years.

While it has taken longer than expected and it had happened under circumstances that we both wish could have been different, we are no longer writing rent checks. Now we find ourselves flipping through the payment book sent to us from our bank knowing that with each page that we turn we own a little bit more of our home. And with each month we add just a little extra, as much as we can, in order to shorten that three decade commitment a little bit at a time.

It really is a different experience when writing these checks (actually, setting up the automatic payment and watching the funds evaporate from our account). There is a goal in mind with a clearly defined payment period. There is certainty and stability in the payments we are now making and, to a certain extent, we look forward to making these payments as each check or transfer is one less that we have to make in order to own our home in its entirety.

Owning our own house also allows for the freedom to change or keep things the same as we see fit. There are few limitations especially without the presence of a homeowner’s dictatorship/association. It is true that we have to maintain everything ourselves but we can also fix things ourselves without the potential repercussions from a landlord and we can chose who we want to do the work if we find it is beyond our limited knowledge and experience. We are able to make things right in our own way in our own time.

We also have the peace of mind knowing that we are staying in the same place. There is no lease and we don’t have to worry about our rent going up next year or the owner deciding that they no longer want to have tenants. We have a place that offers us permanence and stability for the two of us and, more importantly, for our son. This is the home where our son is going to grow up and that is an amazing feeling.

Back To Zero!

The last time we have been able to experience a moment like we did today was right before our flight to Israel in the summer of 2011 (we were in debt once again before we even boarded the flight back to the states). After a couple of years of budgeting and chipping away at the payments, we got on that plane without the burden of debt. Today, while we still have other debts, we finally cleared the balance on our credit cards. Over four years later, after numerous struggles and setbacks, we have finally brought all those totals down to zero.

I must say this is a damn good feeling knowing that we don’t have to make those payments anymore. Well, at least not to pay down previous balances. We actually have a plan in place to keep these cards active having assigned specific charges, to maximize points, on each card. Order something on Amazon, use one card. Buy gas or groceries, use a different one. Go out to dinner, this third one will work. At the end of the month, we settle all the tabs. Heck, we are spending the same money but we are now getting points for the purchases we are already making.

Of course, as I stated before, we are not completely debt free. There are still a few other commitments that we need to take care of and, at the same time, we are looking to move by the end of the year so that means there is at least thirty years before we have to stop making payments on our debt. So, in reality, this is only one portion of our debt that had gone to zero unlike that short time in 2011 when, for a few months, we had absolutely no debt.

But, for now, we are just going to enjoy the feeling of those high interest pieces of plastic having been paid off. There is something uniquely satisfying about zero. I am also less stressed knowing that if something were to happen and we needed funds immediately, we have the credit to take care of most situations. Not the big stuff (the limits are still pretty low) but the moderate issues that everyone faces in life (i.e. something breaks, gets lost, needs to be replaced, etc.). And it is going to be that much more satisfying being able to focus on taking care of other debts rather than focusing on those high interest cards. It still isn’t going to be quick or easy but we can really start making some progress now!

No More Fees For You!

Over the years I have had accounts at a variety of banks. For one reason or another, I have also changed banks numerous times. Usually it was because of location or the simple fact that it was bought out by one of the larger financial institutions. In the past it was never much of an issue as I didn’t have many automatic payments and I didn’t write too many checks. However, things change and I am now in the process of shifting things over once again.

While the hours at TD Bank have always been very convenient and the sheer size of the company assures that there is always a location just around the corner, the benefits pretty much stop there. Over the past couple of years I have watched as the various fees have been scattered throughout my monthly statements. I always pay bills on time but ATM and ‘Balance Inquiry’ fees have been a source of annoyance. I sometimes wonder what the account balance would be if those $2 and $3 fees over the past several years where returned. Actually, I really don’t want to know.

In addition to this, the speed at which transactions are processed is about as fast as a constipated turtle. Having already transferred most of our funds to another bank, I can say with certainty that this is not the normal pace at which a bank should be operating. A perfect example is when, some time ago, I transferred my credit card balance to another bank and while I know this other bank sent the electronic payment and posted it to the other account, it still took TD Bank nearly two weeks before confirming the transaction and reflecting that on my statement.

I am done with this particular company. Heck, this bank wasn’t my choice anyway as I originally had an account with Commerce Bank. So now I am taking my funds, as limited as they may be, and moving them to a local bank. While there hours and locations may not be as convenient, the service and speed thus far is something that we haven’t experienced in the past. When we have a question there is always someone there to answer it, transactions are posted within a day, and the fees have magically disappeared replaced by an interest bearing checking account. It is a bank that choses to deal with their customers not solely the accounts associated with them. It is nice to be a person again… a welcomed change… only the latest of a year full of changes.