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Pay your mortgage off early even when you don’t have extra money to spend.
I am a saver. I really try to save money where I can. We have a family of six and I do not plan on having debt, other than our mortgage, (if we can help it) while raising them. Raising four kids will be expensive enough without worrying about who we would need to pay back. 🙂
Many of you have asked for my old webpage with all of my finance tips on it. It has been so long that I can’t even find it anymore, so I am writing them again. 🙂
Lets take a look at our mortgages. When buying a house,we put down as much as we can. We have always put down as much or more than we need to in order to keep our payment lower. We have never paid the PMI (private mortgage insurance) because of this (I think if you pay less than 20%, you have to pay the PMI- this is a waste of money if you can afford to put more down).
We put down at least 25-30% on each home. We have lived in three houses so far, making a profit on them. A realtor once told us that the way to make it big with real estate is to move every two years. We pretty much followed that rule until now. We are planning on staying in our home until our kids graduate. I won’t lie- moving & living closer to the lake crosses my mind on occasion, but then I am reminded that we have four young kids and living by the lake would scare me every day with the water so close (I know many families love this, but I am a worrier at heart).
Plus, we have my parents that live on the lake and my brother that has a lake in his neighborhood, so we can just visit- they are both just a 20 minute drive! 😉 We moved to our neighborhood specifically for the schools (I was a teacher in the local district & I loved the way that they teachers cared for the children).
Our other mortgage advice is to buy as low as you can- everyone knows this, but we really buy as low as we can. We are not afraid to “fix up” anything. My husband & dad have made so many improvements to each of our homes (adding porches, building things…) Foreclosures & short sales can save you hundreds of thousands of dollars! Don’t be afraid to purchase something that isn’t “perfect” – you can make it so much better than you imagined!
Lastly, pay your mortgage bi-weekly. We have ours set to come out every other week and doing this we will pay it off 8 years sooner on our 30 year mortgage. Doing this allows us to have it paid off before our first son enters college, but our goal is to have it paid off before he enters high school. This is a realistic goal and I see us reaching it because we are determined. Extra money is paid to our principal. If you want to see how soon you can pay your mortgage off, get on an amortization schedule.
Lastly- think before you refinance! You can always pay extra towards your principal, but if you get on a 15 year or less and run into a point where you can’t make the steeper payment, you will regret this. Also, make sure that you are lowering the rate by a good amount because when you add in the closing cost, it might not be worth it. Do a lot of research before you commit to a refinance. 🙂
See more on saving money here