I had a question about mortgage and how it related to my financial independence
My current goals are:
Pay off Car- Done
Save an emergency Fund - 2,000/20,000
match 401k employer 4.5% of salary, employer puts in 9%
Pay off House - $279,879.31
Max 401K & Roth IRA
Live off 30% of income and invest 70% into vanguard index fund
Retire early and live off dividends
Currently my mortgage is broken down like this:
I pay $1900 per month and my bill says
Principal $510.10
Interest $874.62
Escrow $445.07
Current payment $1,829.79
So $70.21 goes to the principle
I got a letter from the VA today saying
"Per the new Department of Veterans affairs VA form 26-1880 eligibility on september 18, 2014 your loan has been marked for this program and notification is being submitted per issuing guidelines.
You will have a new lower monthly principle and interest payment of $1,201.57 beginning December 1, 2014 per program benefit specifications.
Statement date: September 18, 2014
mortgage amount $285,000
New payment amount $1,201.57
You must call 1-888-271-3305 withing 5 days of receipt to ensure timely processing
I'm confused about this.
So currently i have my property tax rolled into my mortgage which i believe is the escrow number above, meaning, my current rate is
$1384.72 and they are offering to change it to $1201.57
My loan is $279,879.31 but this document says $285,000.
Question: Does this mean to get the lower rate i have to pay an extra $5120.69? and Do you think it's a wise choice to take advantage of this offer and why?