First Time

[Lynn Coleman]

Hi all,

Well after building the Inkwell, Paul and I have come across a house that we can afford to purchase. Paul is a minister and we've been in ministry for 27 years, this means we've lived in housing provided by the churches. It also means that come retirement we don't have any equity in a house. So, to make a long story short: The church approved a housing allowance and we just made our first offer to purchase a home.

I'm excited and terrified at the same time. There is some remodeling that will need to be done and Paul has informed me that the one car garage will be his shop. (I don't have a problem with this but I think it's kinda fun.)

Anyway, rejoice with us and pray for us. We believe the owners will accept our offer, we've done a lot of the negotiating before a formal offer was put in writing but you never know.

Thanks for letting me share my joy.

BTW, anyone going to the Florida Tear Jerkers rally the first weekend in Nov? We'll be there.

Lynn

[mandy]

Lynn I'm so excited for you and Paul. I hope you get the house for what you want to pay.

Mandy

[mikeschn]

Well good for you. Home ownership is wonderful.

Irregardless of the terms of the loan, try to make extra payments so that the house is paid off by the time you retire!

Mike...

P.S. We have a 1.5 car garage, and in the summer it's my workshop too. In the winter I push stuff over, and squeeze a car in there!

[Lynn Coleman]

Irregardless of the terms of the loan, try to make extra payments so that the house is paid off by the time you retire!

Mike...

That's the plan. The finance gal told me that if we made an extra payment a year on the mortgage (not all the other stuff attached to the monthly bill) that in 22 years we'd pay off the 30 year loan. So, our goal will be to pay it off in 15. I haven't done the math but I'm thinking two payments a year should cover it...I hope.

Lynn

[M B Hamilton]

Lynn,

First off, congratulations - twice (buying a home and planning for retirement).

You don't actually have to make an extra payment as such. You can over-pay each monthly payment by one-twelfth and therefore only be making twelve monthly payments. The important thing is that all money that you send in excess of the bank's monthly payment is taken directly off the loan's principal. Since early in a mortgage you are paying mostly interest you save both time and money by beginning to make excess payments early in the mortgage.

Mark

[Walt M]

Praise God!! Congrats I'll keep you folks in my prayers till I hear that it's a done deal. BTW there are companys that will take your same monthly payments but instead of once a month you make payments twice a month(each payment is half of your regular monthly payment) it doesn't cost you "any" aditional money but cuts your mortage down by about 7 years. and you still can make extra payments. Blessings, Walt

[bledsoe3]

Congrats Lynn. I happy that you have made the move to home ownership.

[satch]

Nothing beats the feeling of sitting in YOUR living room, looking out YOUR window, into YOUR backyard. I too made my garage into a shop, don't even think of trying to put a car in it. Congrats on the new house, and good luck!!

[S. Heisley]

I'll add my prayers that the sellers accept your offer. They probably will.

When you pay extra money towards your loan, it's best to state that the extra is to be put towards the principal and then check to see that it goes there. Some lending institutions don't put it towards principal unless you stipulate it. (I had a friend who found that out the hard way.) Even though your monthly payment won't decrease, every extra penny you put towards paying off the principal is money that can't be charged interest on, which pays off your loan debt faster.

[The Teardrop Nanny]

Congratulations Lynn and Paul!

Now you'll have to find a way to incorporate all this into a new novel. I'm sure you will find much happiness in your new home, as you seem to be so happy already! Best wishes and prayers go out to you as you begin a new chapter in your life....that of the joys of home ownership.

Joanie
TDN

[Lynn Coleman]

Thanks all,

We are excited but we have to reel in our emotions until we hear that our offer has been accepted. There shouldn't be any reason why not but I'm trying to remember to be patient. I did however start to weed out my closet with clothing I haven't warn in quite a while. I also unloaded a huge section of my personal library and called a few friends to get first dibs on some of my books. It's cheaper than eBay.

But I think a few items (probably more than a few) will still end up on eBay. The new house has much smaller closets so we must decrease, sigh.

Thanks again,
Lynn

[Jiminsav]

High 5..

[BrwBier]

Some have suggested and it sounds like you would like to pay a home load off early. Everything I have ever read says that is a bad idea. A home loan is the cheapest money you will ever find. A financial advisor is the way to go in my opinion. In more normal times the extra payments made to your self can generate more interest than you are paying. Money is very complicated and I do not try to do I myself. Like anything else, ask around and get references.
Brwbier

[Eunice]

Some have suggested and it sounds like you would like to pay a home load off early. Everything I have ever read says that is a bad idea. A home loan is the cheapest money you will ever find. A financial advisor is the way to go in my opinion. In more normal times the extra payments made to your self can generate more interest than you are paying. Money is very complicated and I do not try to do I myself. Like anything else, ask around and get references.
Brwbier

I have heard the same thing. I was shocked when I sold my house and didnt have the interest to hold off on my taxes! I would talk to a professional to see the best way to use your money.
Best of luck with the house. it is a good feeling to look around and know that it is yours.

[Mark & Andrea Jones]

Some have suggested and it sounds like you would like to pay a home load off early. Everything I have ever read says that is a bad idea. A home loan is the cheapest money you will ever find. A financial advisor is the way to go in my opinion. In more normal times the extra payments made to your self can generate more interest than you are paying. Money is very complicated and I do not try to do I myself. Like anything else, ask around and get references.
Brwbier

Talking to a financial advisor is a good idea. However, before you consider investing the extra payment(s), you will need to see if you can get a rate of return on the "extra payment" that is in excess of the rates that you are paying on your mortgage (for instance: Home mortgage of 6.0%, Interest income of 6.1% or more - and I don't know too many financial advisors who can do that - unless you've got enough assets to buy the house outright - in that case, why are you getting a mortgage?).

It's all a balancing act. Investing the money and getting a larger rate of return may not be worth as much to you as the peace of mind of knowing that you are paying down major debt.

In fact, if paying down debt by the time you retire is your goal, then I would recommend that you put those extra payment(s) FIRST towards paying down credit card debt (which typically has a higher interest rate) and SECONDLY towards paying down a car payment (if you have one), then THIRDLY towards paying down the mortgage.

As you may already know, as a minister, you will have some significant tax advantages when paying a mortgage AND getting a housing allowance - more advantages than most people get. Just don't go "overboard" on the housing allowance. There are some limitations. Talk to your accountant about this, when it comes time to prepare your taxes and ask your accountant about the investment vs extra payments on the mortgage decision, too. It never hurts to get more than one opinion.

Andrea.
Disclaimer: Yes, I am a CPA and I do prepare taxes.