I know, I know, it’s radical. And I know I’m likely to attract arguments from commentators who feel I’d be better off putting my money in stocks while they’re down.
But the truth of the matter is that this first goal – to topple our mortgage in one year – relates to the second mortgage on our property. That amount equates to $70,000 to pay off … in one year … plus the interest … YIKES! (For the details on this, check out the `About Our Goal’ page).
But I don’t think it’s hard to see that a second mortgage is no fun. And in fact, it costs us extra money. Our second mortgage is at a slightly higher interest rate. I work in a high-demand profession and one that is seen by banks as at low-risk of non-payment or unemployment. For that reason, it did not cost extra to set up the second mortgage and we did not have to pay mortgage insurance (despite not having a 20% deposit).
However, if one mortgage feels like a millstone, two mortgages feels like a noose. Two notices each month, each setting out the extraordinarily high interest payable (especially since this is the first year of our mortgage). Two mortgage providers and two loan products, each with their own rules, and each with the ability to snap their fingers and change the rules of the game for us, the little players.
When we decided to buy without a 20% deposit, we always planned to pay off the top 15% quickly. But then a funny thing happened. It looked to us like so much money was going out each month anyway, what was the point of working so hard? It was going to take years to pay it all off, so why bust our butts so much? Couldn’t we slacken off a bit? After all, we weren’t going to be mortgage-free for a very long time.
As well as that, interest rates went up. So our big extra efforts felt like they were going unrewarded…
Add to that all the little (big?) things you need (want?) with a new house…
Add to that the extra entertaining we do now we’re home owners …
Add to that the higher electricity bills and other costs in our big, new home …
Oh, and then add all the little reno jobs we’re itching to do…
Yeah, why try so hard?
Well that’s when I decided to …
**SNAP OUT OF IT!!!**
Man, those are all reasons we should be working harder, not slacking off! It’s time to pull out some big guns and put every last dollar we can scrounge into our mortgage!
Our goal is to pay off the remaining $70,000 on our second mortgage by June 2011, as set out in the About Our Goal page.
Watch us get there …
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