Well, it’s pretty much set. Sometime towards the end of the month I will be signing a brand-new mortgage. Yikes!
I don’t have all the details yet, I am waiting for Esther at my bank to give me a call and let me know what she’s drawn up for me. After my last post I took everyone’s comments into consideration, my parents opinion as well as the suggestions my bank made were very helpful! I think I’ve come to the conclusion (you know, from people older and wiser than I) that I should do the repairs to my house, get it over with… especially since those things tend to get worse not better. So, that pretty well leaves me with options 1 and 2 from my last post.
I either refinance and get enough to pay off my SLOC, then cashflow the repairs or I refinance, get enough to pay the repairs and still hopefully pay off my SLOC by the end of the year. Both options will reduce my current interest rate, both options increase what I owe on my mortgage and in both scenario’s I get rid of my SLOC at some point this year. I’m happy with that.
At my appointment yesterday I learned about a thing called Blend & Extend, which apparently many banks offer but not many advertise. I was fully expecting to have to pay a penalty (it would be $2,700, yikes) but Esther told me that’s not necessary. I can choose to renew for a 5 year term loan with them now and pay a ‘blend’ of my current interest rate and the better interest rate they can offer me, essentially we meet somewhere in between. I get a lower rate with no (? still need to 100% confirm this) penalty and the bank gets to keep me as a customer and make lots of potential money off me. (Little do they know that I’m not going to have my mortgage that long, heh)
I’m now waiting on Esther to draw up some papers and then I will be able to go in and sign. I told her I am flexible with my mortgage payment and amortization period BUT although I am flexible with my mortgage payment because it is so low, I still want to keep it as low as possible. 😛 Even though I am going to pay off the mortgage early by prepaying it I need to/want to keep my bare bones budget under $1,000 for at least another year just to offer me flexibility with my job situation. (Cutthroat business, contracts come and go and I don’t want to be caught with a $1000 mortgage payment when I’ve only got $1000 coming in)
My mortgage had and will have the option to prepay 20% of the original loan amount per year without penalty in increments of $100 so whatever happens, come January 2012 I will be humming along with the big repairs to my house done and no debt except my mortgage. WOW, this is all going so fast!
Honestly when I started blogging 10 months ago I could not have imagined to be in this position financially. I’ve been planning to pay off my student debt this year but it’s all starting to feel very real now. It’s also nerve wracking, I haven’t been sleeping well and I think I’ll be restless until the papers are signed and I log into my bank account to see everything rearranged. Eek!