When we bought our modest Cape Cod home back in June 2009, we thought interest rates on mortgages would never drop lower — they were already at historic lows! We got a 5% interest rate on our mortgage and put 20% down so we’d avoid paying PMI (private mortgage insurance). You know, doing it “right.” It’d be our one and only mortgage for the rest of our lives, barring a big lottery win.
Oh, how wrong I was on both counts.
First of all, mortgage interest rates have dropped even further in the four years since we purchased our home. And then we busted that whole “only one mortgage, ever” idea.
I’d flirted with the idea of refinancing our home last February, when interest rates were around 4%. But I knew despite the 20% down payment and principal-building monthly payments, we weren’t going to crack that magic 80% loan-t0-value ratio come the crucial appraisal time — home prices were still fairly low for the Northern New Jersey/NYC metro area.
I decided to bide my time. By December, I was back to researching home prices in our area, brokers, banks and their corresponding rates, and figured it was worth a shot.
After a ton of Internet research, I decided I wanted to go with Guaranteed Rate, a newer mortgage company out of Chicago. I found a representative, Joe Cafiero, out of the Philadelphia area who was very active in answering questions and assisting others on Zillow.com, and who had a great rating across the board. And he wound up being even better than the loan officer from our local bank who worked with us on our original mortgage.
Our stellar credit scores (hovering thisclose to 800, but actually 800 at one credit reporting agency in my husband’s case) allowed us to lock in a 30-year mortgage interest rate at 3.375% for 55 days, at .25 point. Yeah, points suck, but if you’re going to stay in your house forever like we are, do the math for each interest rate/points option — it’s usually worth paying a little more up front to save tens of thousands of dollars in interest in the end.
The Paperwork — Ack, Ack.
This was the most tedious part. It took forever to scan in all of our supporting documents, as they would jam in the feed tray of my dad’s printer/scanner, and I had to start from scratch because of the craptacular software. And I didn’t want to send the company a billion PDF files. It was a few hours of my life that I’ll never get back, but it got done.
Then the appraisal had to happen — and the estimate had to come in at a certain number so we could (again) avoid the PMI payments (a complete waste of money — they don’t go toward the principal!). I was on pins and needles the entire week it took to get the appraisal report.
Amazingly, the appraisal came in very close to what we were looking for. But in order to get to that 80% LTV ratio, we would have to make up the difference by paying $3,000 toward the mortgage principal. Otherwise, we’d be paying PMI for a few years. In the end, it was a no-brainer: Pay the $3,000 toward the principal now, rather than make PMI payments toward nothing.
The next step was getting through the underwriting process. After submitting our 2012 W-2 forms, we waited. Three days later, we had full approval for the new mortgage loan. The refinance was actually happening!
Our closing was scheduled for last Friday — the day that crazy blizzard named Nemo slammed into the Northeast. The woman from the title agency barely made it to our house — she’d already moved up the closing a few hours since we were home. After signing a bajillion pages, initialing a few thousand more, and handing over a sizeable bank check, we were good. Then we watched her head back down our front steps in her five-inch heels and prayed she didn’t fall.
Dropping our interest rate from 5% to 3.375% is saving us a whopping $362 a month in a lower mortgage payment. The closing costs will be recouped in 10 months. Even though we made 3 1/2 years of payments on the original mortgage loan, we’ll still save nearly $60,000 in interest by the end of this new 30-year refinance mortgage loan. And I’m hoping with some well-timed extra principal payments, we’ll be on track to shorten this mortgage by a few years.
I think we did the right thing. The numbers say we did, at least.
With a number of friends and family in the hospital, visiting doctor specialists and getting high-cost medical tests at an alarming rate, my mind turns to the need for good health insurance. Luckily, most people I know have access to affordable health insurance, whether through their jobs, pension plans or the federal government.
One (unbelievably strong, sweet and brave person) I know just underwent major brain surgery. Another family friend has been fighting back from failed kidneys and a host of unfathomable maladies, and hopes to have a second transplant in the coming weeks. A close family member has needed numerous diagnostic tests and medications. Yet another friend gave birth prematurely and her son (who is home, healthy and happy) spent time in the NICU.
If they didn’t have adequate, affordable health insurance, their medical conditions and treatments would be an incredible financial burden for their families.
Unavailability of good AND affordable health insurance, that which can cover everything from an annual routine physical to a multiweek hospital stay, keeps many people in my father’s generation from retiring early. While most workers qualify for Social Security at 62, Medicare health insurance doesn’t kick in until age 65. That means most “early retirees” must scramble for health insurance coverage. For example, my father-in-law could get medical insurance through his union, but it’s cost-prohibitive thanks to sky-high premiums. Or he can wait until he’s 65 and get on Medicare, and possibly add on coverage at a smaller cost.
If and when I retire many years from now, there’s no guarantee Medicare, or Social Security for that matter, will still be around. I likely won’t have a pension because I’ve never been in a union, nor do I have a government job, and I don’t work for a company that offers one.
But for those people retiring now and others who are facing big medical challenges in their lives, the need for adequate health insurance is a priority.
Hallmarks of Good Health Insurance
1. Features reasonable premiums
2. Covers hospitalization
3. Has reasonable co-pays, co-insurance and deductibles
4. Provides easy access to primary doctors and specialists
Having health insurance is a no-brainer for most people, but having good health insurance is of paramount importance, especially if you find yourself facing a major medical issue. Just giving birth to a child (no C-section) could have cost us $30,000 — with health insurance, we paid $3,300. It was still a lot, but far from full price.
ImpulseSave is a new way to save money.
How hard is it for you to save money toward your dream vacation, an iPad or a new TV? Most of us give in to the temptation of using our credit cards for immediate satisfaction (and immediate debt). What if there was another way to put money aside on the spur of the moment AND see how quickly you’re progressing toward your goal?
That’s where ImpulseSave comes in. It’s an exclusive website service that has people across the U.S. “impulse-saving” anytime, anywhere. There are plenty of opportunities to save your money and protect your assets. Link up your checking account, set up the ‘auto-save’ option, and the money is automatically routed into your ImpulseSave account! Easy-peasy. The account is FDIC-insured, so your money is safely tucked away until you’re ready to use it to pay off a credit card or, like me, buy your daughter a playhouse for the yard!
What I like best about ImpulseSave is the ability to push money over to your account whenever the mood strikes. The “impulse to save” usually strikes when I’m contemplating spending money on something else I need. The instant gratification of saving the $5 you’d normally spend on a latte is pretty neat. And it’s a social community experience, as you can leave encouraging comments for others working toward their own savings goals.
I set up my ImpulseSave so I can auto-save $75 weekly toward a new $300 playhouse for Miss Frugalette (trying out new names!), and my progress bar shows that I’ll meet that goal in 24 days — just in time for summer fun! Other people are saving toward a new iPad, trips to Iceland, or to pay off their credit card debt. I did find the site a bit hard to navigate at first, and would love to see a bit more instruction about how the site works and how to set up auto-saves, but overall, it’s been a good experience so far.
A few great points about ImpulseSave:
- ImpulseSavers are saving an ADDITIONAL $4,000 a year on average
- ImpulseSavers are actively saving towards 3 goals, on average
- The interest rate on an ImpulseSave savings account is 0.40% APY
It’s Giveaway Time!
The Penny Frugalista is giving away 20 invites to ImpulseSave!
This is your chance to get into this exclusive site and start saving for the things that are important in YOUR life.
Enter the giveaway by simply entering your email address in the box below and get a chance to be one of 20 lucky readers awarded a coveted invitation to the ultra-exclusive ImpulseSave site. Entries will be accepted starting at 9 a.m. EST on Friday, May 11, and ending at 3 p.m. EST on Saturday, May 10.
EDIT: The contest is closed!
I’ll be contacting the 20 randomly-selected lucky winners after the contest ends. Good luck!
Women, we get the short end of the stick. Not that we weren’t already aware of it.
We do all of the cooking, cleaning, and childcare, PLUS hold down a full-time job. And sometimes other part-time gigs, too (you PF bloggers know what I’m talking about).
So why do men get the bigger salaries?
Women are STILL making only 77 cents for every dollar a man earns, on average. Forget you single ladies — you’re only earning a pathetic 57 cents for every dollar your male counterparts earn. And mothers earn 7 percent less than childless women.
We carry the babies, fill your stomachs, scour the pots, and make sure your underwear is clean. We make sure your clothes aren’t a wrinkled mess when you walk into the office in the morning, and some of us (not me) pack you a nice lunch every day.
Sure, we’ve come a long way, but we need to close up the wage gap. Jezebel put up an eye-opening chart that shows what a woman could do with the extra $10,000 a man makes per year, and then what she could buy with that money over a lifetime of work. And as we age, the wage gap becomes even larger!
The Economy’s Not Helping
Who out there has gotten a raise in the past few years? How about a bonus? You’re the lucky ones. Many people — both men and women — have had stagnant incomes.
We women work our asses off 24/7, and some of us haven’t even seen a cost of living raise in 4-5 years. I do realize it depends on the industry, but if we’re not given a chance to advance, how can anyone not expect morale and productivity to take a nosedive? Many of my male friends have continued to see raises, promotions and bonuses. Most of my female counterparts have not.All the while, prices are rising: gas and commuting, groceries, clothing. You know, the necessities.
Stereotypes Still Exist
A New York Post headline screams, “Wisconsin GOPer: Women make less because ‘Money is more important for men.’” Those are words from a state senator, folks, and I take offense. Money is important to women like me, too — we need it to keep food on the table, a roof over our heads (in Northern NJ, middle class folks need two incomes to pay for the average mortgage), and send our kids to college. Without money, it’s hard to survive. That’s why women want to make as much as the rest of you guys.
Yes, we birth the babies and get time off for that. Have you seen what we go through with pregnancy and labor/delivery? And nowadays, most of us head right back into the workforce after our maternity leave is up. The days of the stay-at-home mom are a thing of the past.
Ironically, Tuesday, April 17 was “Equal Pay Day.” At the current rate, it will take another 45 years to fully close the wage gap. I hope the sexism ends before our children enter the workforce.
When it comes to shredding, I like to think I’m up there with the best of them. Every piece of junk mail, every credit card balance transfer, every scrap of paper with our name and address — all of our personal information goes through our shredder. Financial information is at the top of the “to-shred” list.
The problem is that I have two large piles of papers left to be shredded, thanks to a recently emptying of my old, plastic “file cabinet.” Utility bills from 5 years ago? Unnecessary. Store receipts from 3 years ago? Sayonara. Credit card statements from 8 years ago? Why do I still have you?
In this electronic age, is there really a need to keep paper statements, receipts or paystubs? Turns out that there’s some paperwork that you should hang onto for a few years.
What to Keep
Tax Returns: Liz Weston recommends filing away tax returns and the associated forms for 7 years — that’s how long Uncle Sam can take to audit you. If you’ve submitted a fraudulent tax return, there’s no cap on the audit time.
Loan Paperwork: If you have a year-end summary, you can ditch the periodic statements. Also keep loan payoff notices indefinitely.
Investment Statements: Same as for loan paperwork — hang on to the monthly or quarterly statements until you get a year-end summary, then toss others. Keep the year-end paperwork until you’ve withdrawn all the money in your investments.
Receipts for Major Purchases: You may need these for insurance purposes if you’re claiming a loss or damage through a policy.
Home Improvement Paperwork: Knowing how much you spent on renovations/upgrades can help add to your home’s price, should you decide to put it up for sale.
Insurance Policies: Hold on to these for as long as the policy is in effect, if not longer. I like to file away previous homeowners and automobile policies for comparison purposes, to make sure the coverage matches up from year to year.
Personal ID Documents: Birth certificates, marriage certificates, divorce papers, old IDs.
What to Shred
Old Receipts: Once you’ve reconciled receipts to credit card statements or checking accounts, throw those suckers in the shredder. Exception: Receipts for major purchases, as outlined above. We mainly have receipts for our debit-card purchases, such as groceries or gas.
Bank and Credit Card Statements: From now on, I’m only going to keep one year worth of statements. Which might be overkill, since I can access years of statements online through the credit card companies. Our bank has gone “paperless” and no longer send account statements, so that’s fewer documents to store and shred.
Utility and Phone Bills: I’m only filing a few months’ worth of these, in case I need to dispute a charge. Again, digital statements are all available through my online accounts.
Paystubs: If they’re over a year old and you have your W-2 form showing income for the year, chuck your paystubs.
Shredding can be a stress-buster. SHRED! DESTROY! ELIMINATE! Sure, the machine is doing all of the destroying, but it’s sort of satisfying to watch a whole piece of paper become confetti.
I just wish I’d started sooner. Back to shredding credit card statements from 2004!
True confession: I missed a credit card payment. Oops.
I’ve never missed a credit card payment before…NEVER. It’s embarrassing to admit, never mind to blog about it.
How did it happen, you ask? Well, it’s not that I forgot it. On the contrary, I thought I had paid the bill through my online billpay portal. But instead of paying this particular credit card creditor, I mistakenly entered the payment into the wrong payee field. And I didn’t notice it until I’d logged back into our online banking — 3 days AFTER the due date. I immediately sent the payment to the correct creditor, but it was technically late.
If he’s reading this, I know exactly what my father is thinking at this moment: “This is why I still mail my bills!” True, it’s hard to screw up and pay the wrong creditor when you’re writing a check and mailing it, but you could always write out the check to the wrong company… right?
The creditor charged me a $15 late fee, which was the minimum payment due, and upped the next month’s minimum to $33, plus the $15 from the previous month, for a total of $48 due. As a rule of thumb, I pay much more than the minimum payment, so it’s not an issue.
The payment wasn’t 30 days overdue, so I’m hoping it doesn’t get reported to the credit agencies — that would suck. But I don’t plan to need any credit anytime soon, and the last time I checked, my credit scores hovered around 800 for all three agencies.