Yesterday was not a good day. We got a notice from our mortgage company that, after rebalancing our escrow account, we're running $595.06 short for the year. We also had an increase in property taxes due to a school levy, and an increase in homeowners insurance premium due to a sewage back up in our basement that resulted in a nearly $10,000 claim. So, after adding the increased taxes, premium, and shortage and dividing it over the next twelve months, our mortgage payment was going up $85 a month. That might not seem like a lot to some, but it's enough to put us over our heads and ultimately result in us falling behind on our mortgage.
If it weren't for the massive minimum payments on our maxed out credit cards, we wouldn't have a problem with paying our mortgage, even with this increase. We have got to find a way to get out from under our Target credit card and it's 24% interest rate. For ever $135.00 minimum payment, $96+ is going towards interest. We tried applying for a credit limit increase with my husbands credit union last month, so we could do a balance transfer. They countered with an offer for a private loan with a 10.74% interest rates, but the monthly payments would have been over $400 a month. We're trying to reduce our payments, not triple them.
Yesterday, the mortgage broker that we went through to buy our house called my husband. He left him a voicemail about reducing our interest rate on our house, and subsequently reducing our minimum payments. I've been looking at refinancing for several months, because right now we're in a 6% fixed interest rate on a 30 year mortgage, which almost seems criminal with the historic low interest rates we're seeing at the moment. But here's the thing; we owe over $108,000 on our house. According to Zillow, our house is only worth $95,000. Every refinance offer I've looked at has required a down payment of 5% minimum. We don't have any money for a down payment, we don't have money for closing costs or fees associated with refinancing, and we're not sure how long we're staying in the house anyway. The refinance offer I was looking at last night required a 5% down payment to refi, and would have taken 14.5 months to recoup the costs associated with the refinance.
However, the notice from our mortgage lender yesterday was enough to push us into action. My husband called the mortgage broker back last night and left a message for him to give us a call. The worst that can happen is he can offer us nothing, right? I contacted our insurance company to see what impact raising our deductible to $1000 will have on the premium for our car, and for our house. I don't think we can change the deductible for the house mid-term, but I want to see what the different rates are with our current provider because I'm going to shop around. I hate to, because I've been a customer for 13 years, but we just can't afford to pay any more than necessary. I work for an insurance company and would get a 15% employee discount if I switched, but I still don't know if it will be low enough to replace our current company. I'm going to give my credit union a call this morning to see about a credit limit increase/balance transfer from our high interest card. I've gotten a pretty decent raise since our last credit limit increase. And if we can transfer the balance, we're going to have to cut up our Target card. just get rid of it. It's a toxic card.
The good is, my husband got his bonus this morning. I wasn't expecting it until next month. The bad? It's 8:30 am and the bonus is gone. I paid our past due cable and electric bills and the Target bill that's due next week. At least we're current though. As long as we can keep current, we'll be ok. I see a garage sale in the near future. If I'd known my neighbors were having a garage sale today, I would have probably taken the time off work to have one myself. Oh well, hindsight is 20/20.
I think my husband is finally seeing how much we're struggling. Not enough to quit smoking, but enough that he's planning to start rolling his own cigarettes as a cost saving measure. Hopefully that will transition to quitting altogether in the near future.
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