Wednesday, February 25, 2009

A little bit debt free... or debt unburdened?

Today is the closing day for our refinanced mortgage. By taking advantage of lower interest rates, Mr W and I were able to refinance our mortgage, add $45k to the mortgage for debt repayment, and: 1) not increase our semi-monthly payment OR 2) not increase our mortgage term. I played the banks fairly hard I think. Once approved by ING at 4.34% I called CIBC where our mortgage resides to see if they could get us a better deal. They came back at 4.3%, which ING countered at 4.29%. In the end, ING was far superior in response time and customer service. CIBC simply dropped the ball - taking several days to get back to me with an offer, whereas ING responded within hours of my emails. ING also allows to pay back up to 25% a year without penalty, a huge advantage for us to eventually start paying our mortgage down.

So while we are obviously not debt free, the debt burden has been lessened. Our monthly debt repayments have been reduced by hundreds of dollars, and we are saving thousands and thousands on interest. We still have our government student loans to pay off, which now seems achievable. This will be our first debt goal. Our mortgage has amount is still considerably below assessed value too, just in case things start to fall in this neighbourhood. In 2008 our house still increased in value by 6%- a slow down, but not a downturn yet.

Ahhhh spring. Time for reworking the finances :) Mr W is also away welding (although it is -32 with windchill in Prince George- Nancy I guess everywhere slightly north is cold too? Especially compared to the south coast!) which he often does in the spring. My bulbs are up, and yes, today we have a snowfall warning!

Since I have been posting finances lately, and little about the little boy, here is a recent pic from one of our geocaching adventures.


BJ said...

Congrats on the refi. That should really help eliminate your overall debt burden.

Good Luck

Heera said...

I personally am not a fan of mortgages; being in the Financial Advising field myself, I know some of the ins and outs of financing homes. However, now that your stuck to that Mortgage, you have to make due with what you have.

Great news for your situation though; consolidating debts into one payment will save you a lot of money in the end. Now the key is to not get back into the cycle of debt. I see so often that people are financing and refinancing over and over again. What you want to do is keep yourself to a strict monthly budget so you don't get yourself back into the same debt that you just got yourself out of. Use the extra cashflow that you guys have now to a) protect your family's income (i.e. insurance) b) repay your debt faster c) build an emergency fund and d) accumulate assets for retirement. I know it sounds like a lot, but even a few bucks here and there will go a long way.

If you require more information, please do not hesitate to contact me.

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