Tag Archive for debt

Car Loan & Mortgage PAID OFF! YAHHHH!

I am so excited I can scream! Both my car loan and mortgage are finally paid off. I paid off my car loan before my mortgage, but I didn’t want to celebrate until getting rid of my mortgage. I made the final payment on December 21, 2011. Whoo hoo! I have been waiting for this moment since August 2000, the month and year I purchased my home. It took 11 years and four months to pay it off the full mortgage and I can tell you that the wait was so worth it. Paying off my mortgage was my Christmas present to myself, the best Christmas present ever. Well I got an iPad which I absolutely love but that’s just going to have to stay in second place. I didn’t seriously start to track the pay off of my car loan and mortgage until 2009. Click here for the details.

Now that I have no mortgage it’s going to feel a little weird not to have to give the bank money every two weeks. I have decided that I am going to save what use to be my mortgage payment, since I have been living just fine without that money anyways.

Saving my old mortgage payment won’t really be a New Years resolution since I made that decision last year. I actually don’t make New Years resolutions any more. Why wait until the beginning of a new year to try something new, or make a goal, or start fresh. Just do it when you want to change, and that could be any time through out the year. Besides I think New Years resolutions are over-rated. Gyms use this as a marketing tool to generate more business because many people want to loose weight for the New Year. Don’t get caught up in the hype surrounding resolutions. Do your homework if you plan to join a gym and NEVER give a gym access to your bank account. Check out community centers, their prices are often cheaper than larger gyms. Most condos have gyms as well, if you live in one or have a friend that does, take advantage of those gyms.

So what are some of the things that you want to accomplish?

Debt Pay Off Part 3 – Interest Rates, Terms, and Amortizations

This is part 3 of a series of how I paid off $95,778.5 in less than 3 years.

When it comes to interest rates and terms it’s important to know that you can negotiate interest rates. When you see a rate on a banks website, that is called their posted rate. This rate is often set high, so they have room to negotiate. Shop around with different banks, credit unions and other companies that offer mortgages to see what’s best for you. Never get pressured into buying a home or obtaining a mortgage. This is one of the largest purchases you will ever make, so take your time and do your homework.

After you’ve determined whether you will qualify for a conventional mortgage, a high ratio, or a HOLC/HELOC, you will need to decide what term is best for you. When I purchased my first home, I put 5% down,(high ratio mortgage) amortized my mortgage over 25 years and took a 5 year fixed rate term.

Mortgage Term

A mortgage term is the length of time your mortgage contract is in effect. It is also how long you are guaranteed a particular interest rate. At the end of your mortgage term you can renegotiate your interest rate.

Amortization

This is the life of the mortgage. Amortizations are usually 25 years or 30 years, meaning this is the amount of time it will take to pay off the mortgage.

Open Mortgages

An open mortgage can be paid off anytime without a penalty. Most times you can also make additional payments on your mortgage throughout the term without a penalty. Open mortgages usually have higher rates than closed mortgages. The rates are higher because there are more flexibilities when it comes to paying off your mortgage early, or leaving one bank for another.

Closed Mortgages

Closed mortgages have lower interests rates than open mortgages, but are not as flexible. You cannot pay off your mortgage early without incurring a penalty with a closed mortgage. You can however, take advantage of any pre-payment options your bank offers in a closed mortgage.

Convertible Mortgages

This mortgage is similar to the closed mortgage with the added benefit of changing terms without paying a penalty. (This mortgage varies among banks)

Click here for part 4

Debt Pay Off Part 7 – So You’ve Moved In, Now What!

This is part 7 of a series of how I paid off $95,778.5 in less than 3 years.

When I first moved into my condo I was really excited. The first thing I wanted to do was paint, I wanted to customize everything to my liking. Be careful of the “I want everything right now” syndrome. It is extremely tempting to buy everything all at once, especially with all of the commercials advertising new mattresses, sofa’s, dining tables, and bedroom sets. Consider buying what you need now, versus what you want. Do you really need a new sofa or bedroom set. Maybe the one you have can last another couple of years. If you do need new furniture, please be very careful with those don’t pay for one year deals. Usually these companies allow you to pay for the item within one year of the purchase date without charging any interest. However, if you don’t pay for the item within one year and decide to pay for it a day late, you will pay all that interest that you incurred within the year. So please read the fine print.

Don’t forget to change your address with the following:

Utilities & Services

  • Cable
  • Telephone
  • Internet
  • Physicians/Veterinarian
  • Attorney

Financial & Personal Products

  • Banks
  • Credit Card Companies
  • Department Store Credit Cards
  • Insurance Companies (health, home/life, auto)
  • Accountant
  • Professional Memberships

Government Services

  • Driver’s License
  • Post Office
  • Income Tax/CRA
  • Unemployment Insurance

Subscriptions

  • Newspaper
  • Magazine

After you’ve updated your address, check your finances. You may need to open new accounts, transfer funds and order new cheques.

Click here for part 8

Debt Pay Off Part 9 – Staying Motivated

This is part 9 of a series of how I paid off $95,778.5 in less than 3 years.

Staying motivated to get out of debt is not easy, especially if you have a few more years to go. I did a few things to keep me motivated.

Volunteered to help others get out of debt

Since I was on the debt free journey, I knew there had to be others that wanted the same thing. I began teaching young adults at my church about what I was doing to get out of debt. I am sure I learned more from them than they did from me. This really helped me to stay on track.

Set short-term goals

If you have a large amount of money to pay off, setting short-term goals will help. For example, if you have $100,000 to pay off. Set $25,000 goals, this will help to keep you motivated by achieving smaller milestones.

Celebrate your successes

Celebrate when you hit your milestone of $25,000. (previous example) Celebrating will remind you of all the hard work you’ve put in to reach that milestone. Of course you want to have a small celebration until you’ve hit the ultimate goal.

Tell people that will motivate you

Don’t be afraid to tell others of your plan to get out of debt. You may find that some people will make fun of you, but try to surround yourself with people who will motivate you. Blogging is a great way to find supporters.

Create a group of debt free fanatics

If you have a group of friends that are on the same path as you, try creating a money group. This will help you all to be accountable with your money. You’ll also have a support group when obstacles come your way or when you feel discouraged.

Listen to the Dave Ramsey show

Dave Ramsey is the host of a popular debt free radio show called the Dave Ramsey show. It’s a great show to help keep you motivated. I listen to this show every day. I never get tired of hearing people’s lives change and hearing people yell “I AM DEBT FREE”!

 

This will be my last post on the “Debt Pay Off” series. I hope you found some tips that will help you achieve your financial goals and help you pay off your mortgage. If you have any questions or feedback, feel free to send me an email at callmewhatyouwantevencheap@gmail.com

 

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