Author Topic: Reader Case Study- Couple looking for suggestions  (Read 1379 times)

Vini

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Reader Case Study- Couple looking for suggestions
« on: May 24, 2020, 07:09:11 PM »
                                    
Life situation: Unmarried couple that files separately, I mortgage the home and he helps with extra payments and the vehicle loan plus vehicle expenses.  With finances we treat it mostly like a roommate situation. We live/mortgage a cape cod in northern Vermont with 2 kitchens, 2 bathrooms and 3 bedrooms, for the past year and a half, also have 13 acres an hour away with a camp (no running water) that we own and pay taxes on worth about 50,000 now.  He works all over doing fire sprinkler work and has a company vehicle for that, I work in town and walk/bike there.  The mortgage is a 20 year at 4.9% and originally 150,000.  I have about 20,000 in my 403b and about 5,000 in a roth, and he has about 75,000 in a 401k.  We are considering renting a room out which we have done elsewhere in the past, as well as moving to the camp and possibly renting the whole house for 6 month stints in the warm weather months.  We ponder moving to the camp, it has served as a school for us, learning timber-framing, foraging and some basic self sufficiency, but i would then be forced to commute to work and it would add an extra hour or two to his work commute which is already at that.  It is very rural up there and we are unsure how to sustain an income up there. 
Gross Salary me-57000   him-50000                                 
my Pre tax deductions 403b 93.86 a pay period,   medical Insurance 75.00 a pay period, union dues 13.00( not sure of his)
                        
                             monthly pymnt  Yearly         Monthly Income   approx 6000 for both of us         
                                 
Mortgage                 $1,322.73   $15,872.76            
extra    pricipal pymt       $1,500.00   $18000.00                              
Car Payment              $327.00           $3,924.00   
Car Insurance              $103.00           $1,236.00                              
Electric &Water             $145.00           $1,740.00                        
Phone Bill                      $23.00           $276.00   (for both of us)         
Propane                      $75.00           $540.00                                                                                                                       
13 acres taxes              $73.00           $876.00            
Nursing SO              $7.00           $84.00                           
vehicle registration      $7.00           $84.00                           
trailer registration      $2.00           $24.00                           
Nursing License renewal   $8.00   $96.00            
Drivers License renewal   $2.00   $24.00               
Groceries                      $1129.00   $8,400.00   (highest it has ever been I know we can cut it in half now that we know.)                     
Internet            $53.00       $636.00  (we use xfinity)
Hulu+netflix                     $59.00        $708.00  (trying to convince him to cancel)

DEBT includes mortgage and vehicle nothing else outstanding                     
116659.1            

MrThatsDifferent

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Re: Reader Case Study- Couple looking for suggestions
« Reply #1 on: May 24, 2020, 10:25:58 PM »
Might be helpful to include your goals, hard to advise if we donít know where you want to end up.

former player

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Re: Reader Case Study- Couple looking for suggestions
« Reply #2 on: May 25, 2020, 01:16:40 AM »
Might be helpful to include your goals, hard to advise if we donít know where you want to end up.
Agree with this, although the things which stand out immediately are -

1.  For two people your food costs have been insane,
2.   You are saving the same for retirement in a year that you have been spending on food in a month,
3.  You have chosen to pre-pay your mortgage over making retirement savings and need to do the math on your interest rate on the mortgage as against making (tax efficient) returns in the market,
4.  Apart from property your biggest efficiency is probably to sell the car that you don't need because you can walk/bike instead.

brooklynmoney

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Re: Reader Case Study- Couple looking for suggestions
« Reply #3 on: May 25, 2020, 06:17:06 AM »
Why is the interest rate on your mortgage so high? If you have good credit you should be able to refi. Rates are at historic lows.

Vini

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Re: Reader Case Study- Couple looking for suggestions
« Reply #4 on: June 03, 2020, 08:58:43 AM »
Might be helpful to include your goals, hard to advise if we donít know where you want to end up.
Goal- We are considering renting a room out which we have done elsewhere in the past, as well as moving to the camp and possibly renting the whole house for 6 month stints in the warm weather months.  We ponder moving to the camp, it has served as a school for us, learning timber-framing, foraging and some basic self sufficiency, but i would then be forced to commute to work and it would add an extra hour or two to his work commute which is already at that.  It is very rural up there and we are unsure how to sustain an income up there.
 To make that less vague- We plan to use our current residence as a rental beginning with just rooms to let and transition to making our primary residence our camp, where we hope to have income from the current primary residence and perhaps some side jobs.

Vini

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Re: Reader Case Study- Couple looking for suggestions
« Reply #5 on: June 03, 2020, 09:07:36 AM »
Why is the interest rate on your mortgage so high? If you have good credit you should be able to refi. Rates are at historic lows.
I have been looking into this and it seems very close.  From quotes Ive gotten its at least 4,0000 in closing cost even with using my own bank where I currently have the mortgage.  So right now with doing an extra payment Im paying approx 13453 in interest, if I go ahead with  refinancing at an interest of 2.7 is what Im being quoted and I continue the extra payment I would pay about 6837 in interest.  however add to that the closing cost of 4000 and its about even.  So it seems to be only a lateral move.  I am open to more suggestions on this.

former player

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Re: Reader Case Study- Couple looking for suggestions
« Reply #6 on: June 03, 2020, 10:18:18 AM »
In my world $13,453 and $10,837 are significantly different figures.  And after the first year $13,453 and $6,837 are very signficantly different figures.

I mean, it's Hulu+netflix more than 3 times over just in the first year.  Make OH happy by telling him he can keep Hulu and netflix because you've just saved so much on mortgage interest.

Vini

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Re: Reader Case Study- Couple looking for suggestions
« Reply #7 on: June 03, 2020, 10:53:39 AM »
Thanks!

fuzzy math

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Re: Reader Case Study- Couple looking for suggestions
« Reply #8 on: June 04, 2020, 12:15:59 PM »
Have you posted here under a different name? your story seems familiar to me