Hi Everyone,
I found this blog a few weeks ago and it has already helped me a lot. I'm 28 years old, live in the Hudson Valley region of NY, been working in banking for about 3 years. My SO is 30, a preschool teachers assistant. She is two semesters away from obtaining her Associates in Early Childhood. We are currently trying to start a family. Depending on how everything goes, she may continue bachelor level courses next fall. Here are our details:
Gross Annual Income
Me 45,000.
My SO 20,000.
My monthly income= 2230 (this is less Health insurance, group term life, 401k, HSA)
SO monthly income = 1680 (only during school year)
Total Income = 3910
Current fixed monthly expenses:
1008 on FHA mortgage (incl. taxes, homeowners, PMI)
500 on SO current Tuition
400 on groceries (~100 per week )
323 on gas and electric (100 yr old house with little insulation. We're working on that...)
320 on gas ($40 per fill up, per car, once a week)
130 on auto insurance (2 vehicles, we live 45 min from work, in opposite directions)
108 on mobile phone
100 on Emergency Fund
50 on internet
8 on netflix
Total Expenses: 2947
Income - Fixed Expenses = $963
Assets
2300 in EF (almost $8k was depleted this year from wedding expenses)
116,000 estimated Home value on Zillow
~3000 in 401k (contributing 6% with 3.5% employer match)
~600 in HSA
Liabilities
Student Loan #1 = 7310.00 @ 1.75% (currently deferred)
Student Loan #2 = 2145.00 @ 6% (currently deferred)
Mortgage = $95,500.00 @ 4.25%
Specific question:
I have been putting an additional $192 towards the mortgage every month, in an attempt to drop the ~$90 PMI. I'm not sure with Wells Fargo, but we might have to wait another 3.5 years to drop PMI, even if we have 22% equity before then. We had been paying ~100 per month towards the student loans until they slipped back into deferment when SO enrolled this fall. Does it make the most sense to keep paying down the mortgage? Should I be focusing on paying down the Student Loan at 6%?
Our 100 yr old house makes most of our additional income goes towards repairs and upgrades.
Thank in advance for the feedback!
Pav
EDIT: I just found out that the PMI is required for the first 5 years of the loan. That will be 2017. Both of the deferred SL are not accruing interest while on deferment. The emergency fund has 1500 and my checking account always has an additional 1.5 months of mortgage payments, plus the monthly expenses to pay off the credit card. I suppose an additional question is where the MTG rates will be in a year or so. If I can get a no-closing cost refi to a conventional mortgage, that's one way to lose the PMI.