New Directions
Hello FOGA Readers!
Mr. FOGA and I went out for dinner today. We got a coupon in the mail for a free entree at Bonefish Grill, so we took them up on it. It was a nice dinner where we talked about all the new directions and changes coming in our lives shortly.
Within the next two months, I am going to be moving to a new location for work (yay for promotion) with new partners. I get to relearn everything I’ve known off the top of my head for the last two years. Mr. FOGA is going to part-time at the end of the month, so he can focus on what he wants: his health and getting the certifications to switch to IT. Plus, in our financial journey, we have paid off all our debt sans the mortgage, fully funded the IRAs, and fully funded our emergency fund- lots of crossroads at once.
Now, on top of that, we just realized that we are no longer interested in paying off our mortgage.
Wait. What?
I can already hear it. Aren’t you the person who said that “this was the ultimate goal?” Yes, I am. In fact, I’ll do you one better. I also said this:
Here’s the thing though. I went and used a refinance calculator since one of the three homes I have been mentioning sold, and another is pending. Using it, they asked a lot of basic questions- current loan info, future loan info, how you plan on being in the home, etc. Payment ended up being about the same since I was lowering from a 25-year to a 20-year mortgage. We were also saving about $35,000 in interest, which was great, but there was one problem that never really occurred to me before. I only see us in this home for about ten more years.
Why the hell are we working to pay off a mortgage when we’re not going to end up staying here?
I didn’t actualize this until dinner when we were talking about it. Once it came out, it was canon. I didn’t feel that we needed to sacrifice to pay it off. We’re still planning on paying towards it, but it’s not our driving ambition anymore. It’s a side quest that doesn’t need to get completed to finish the primary mission.
What Now?
Right now, we are planning to get to 20% loan to value. That is when the PMI drops off and (if the bank lets us) we can remove escrow from our account. That way we pay the taxes and the insurance ourselves and pay the same amount towards the mortgage. So, since our PITI + additional principal (principal, interest, taxes, insurance, and mortgage insurance/PMI) are $2000, we would remove the taxes and the insurances from the equation and still pay $2000 a month or a little less. Built-in principal pay-off with very little stress.
We were planning on doing much more, but this feels comfortable if everything can come together.
From there, we can focus on whatever else we want to without being concerned about the mortgage. Definitely a difference from when I initially started talking about our mortgage here on FOGA.
I guess I am starting to see that we may be okay now. I don’t have to worry about something truly catastrophic coming out of the woodworks to ruin our lives. Even if I lost my job tomorrow, I have places I could go and friends and contacts who could help. It’s a nice place to be. 🙂
In Summation
Well, those were some new directions we are going in now. I was actually planning an entirely different post, but then we had that talk which changed things. Change seems to be the theme of this year. I’m not usually a huge fan of change, but I’m warming up to the idea.
How about you guys? Any changes coming up for you? Let me know in the comments.
Until next time,
-Ms. FOGA
I had a similar epiphany this year. I was even on Fire Drill podcast talking about paying off my mortgage by the time I turn 43 (now just over 6 years away). But my refinance to a 15-year fixed loan at 3.125% makes me not be in a rush to pay it off anymore. I will invest the “extra” money that I would have otherwise thrown at the mortgage balance, and the bulk of the compounding happens in the last few years, so it would be silly to take that cash and throw it at a shrinking mortgage balance at, say, year 13.
Change is Good!
Hi Josh! Yeah. Not even sure we may refinance now. It may not be worth it since we would still be paying a little more towards the mortgage and that would remove a lot of the benefits of refinancing. Plus, we get to focus on investing sooner.
Change is odd for me, but it seems to be more in a positive direction lately. 🙂
Thanks for reading!
Look at you growing and evolving as a financial human! I had a similar epiphany with my student loans. I’m okay if it takes us a bit longer to pay them off because we have other goals we’re interested in, and that’s okay!
Hi Moriah. It’s crazy how long it can take to get to that point. Living life is definitely more important. Especially if we’re moving in seven years (give or take). lol
Thank for reading!