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Originally Posted by PRJ
The trick is to not live beyond your means. That way you don't have to re-finance 3 cars into your mortgage and pay for them for the next 25 years just to make ends meet or have more cash available monthly.
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Here's what I'm doing in a nutshell with ballparked numbers, you guys have been just assuming that I've been living beyond my means.
My goal was originally to lower my payments but as I statrted looking into it, I can lower my intrest and raise my risidual and use the difference to payoff some bills. Right now, I'm paying about $2000/mo in House payments on a 6.25% 30yr mortgage that I signed on 5yrs ago so I have 25years left. The intrest rate I can get now is 5.75% so if I lower the intrest with keeping $2000/mo for 25yrs, that gives me about $34,000 after closing+taxes to pay a couple cars off with. Here was my rough draft thinking:
$2000/mo x 25yrs = $720,000
6.25% = $450,000-intrest $270,000-Principle
5.75% = $414,000-intrest $306,000-Principle
That's $36,000 difference. I think the Closing+Tax runs somewhere around $2k but I'm not up to speed on that part, but I'm pretty sure I'd still have over $30k difference when all said and done.
So basically, I'd keep my existing monthly bill but move some of the $$$ being paid into intrest over into usable funds. $30k over 30yrs only comes to about $100/mo savings on payments and since wifey did decide to quit working, I'd rather get out from under at least 2 - $400/mo car payments (totalling $800/mo for the next 3 years) than worry about saving $100/mo over 30yrs.