June marks our 2 year anniversary in our new condo. Since the home improvement projects are still lengthy and on-going, I've been getting a little antsy, just paying our standard mortgage payment every month.
We pretty much have just been tossing a few extra pennies on each mortgage payment to get us to a nice round number... (and we have only managed to reduce our final mortgage payment by a whopping $97.00.
But that all changes next month.
I'm getting a very healthy annual raise this year because I've been working my butt off and instead of inflating our lifestyle, we are going to start accelerating our mortgage repayment plan.
With the first condo, it took me being in the place a little over 3 years before I was able to refinance, eliminate the MIP, and jump on the "20 year" mortgage bandwagon.
This time around, we aren't going to do a refinance and pay someone to lock us into a higher payment with a likely higher percentage rate. Nope, this time around we are just going to start adding enough money onto our mortgage payment every month to get us to what a 20 year mortgage would look like with our current loan balance. (I love online calculators)
So instead of $764.00 a month, it will be $969.00 a month.... starting next month... which will basically wipe out my raise after tithing and it feels like its the right thing to do with our money, which makes me happy.
- This change will make our base annual costs around $18,300 a year (before home improvements) when we add in property tax, insurance, and HOA fees.... which is still $8,430 cheaper than renting
I tossed a few extra dollars onto our June payment to celebrate this welcomed change!
Current Mortgage Balance: $154,200.63
- June Payment:$808.83
- Principal paid:$293.85
- Interest paid: $514.98
Total interest paid on the new loan: $12,582.46
Estimated Value: $330,480.00*
*Until the improvements are finished, we are keeping the value at our property tax level because no one likes an unfinished project.
Getting The Keys
If your just catching along with our house buying and selling story, you'll want to check out the re-cap post on our 1 bedroom condo.
Money spent to move: $167,834.96.... Remaining Profit from original sale: $14,589.16
We got the keys and the same day we moved in, we also started to remodel. (After the boxes were out of the u-haul, we ripped out our master bedroom closet)
Here's what we have spent so far on the remodel:
Here's what we have spent so far on the remodel:
*When we file our taxes for the year, I always factor in what our return would be BEFORE our mortgage expenses drop us into the "itemizing" category. For 2017, we were able to write off over $7,000 and the amounts listed in the chart above are the amount we received back because of our mortgage and property tax deductions... and the sale of our condo and those expenses we could write off. For 2018, we only saved on our state taxes, not having enough deductions to itemize our federal taxes.
**We also track how much cheaper it is to be homeowners vs. renters. Our 2 bedroom housing comps tell us that to rent a 2 bedroom for the first 6 months would cost us $13,156 verses $8,440.50 to be homeowners (That's 6 months of Mortgage, additional principal, Prop Tax, HOA, and Earthquake insurance expenses since our Homeowner insurance was purchased in escrow.) So that's how we get our $4,715.50 "living in our condo savings" for 2017. For 2018, we used the same numbers and the difference was $7,227.33. For 2019, we will use these factors in 2019 Housing Comps.
So, we are currently in the hole $3,860.21.. and still in home improvement land.
However, we have $176,279.37 in equity, if we assume our property tax value is accurate at $330,480.00. If we were to sell our condo today after 6% commission fees and another $4,000 in closings costs, (plus the amount we are in the hole for) we would walk away with $148,590.36 verses the $181,691.35 profit we had before we bought this place.
So we have a ways to go to make this home a worth while investment. For us, having our own room and more space, and being on the bottom unit and closer to the park and play area is worth the $33,100.99 difference for the time being.
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