Hello!
I am looking for a reassurance I guess? Or maybe some opinions on what I did…
Prior to covid/during Covid we (wife and I) were in about $22,000 of credit card debt. Young, dumb, and two work related injuries while not having an emergency fund was the cause of it. Due to Covid our financial situation took a major hit, and it wasn’t very good prior to Covid. Most months I felt like I was robbing Peter to pay Paul. Overtime at my job is essentially guaranteed outside of a pandemic, well when Covid hit I took roughly a $40,000 hit in income due to the loss of OT. I did DoorDash on the side to keep us afloat and took a forbearance on my mortgage so we could salvage some form of normalcy for our 2 young boys.
Work started to pick up again in February so I ended the forbearance (balance was put to the end of the loan) and began making normal payments again. I started looking at options to refi my mortgage after I made 3 payments and a friend of mine does mortgages so I went through him. We discussed a multitude of options and ultimately decided it would be best to refi from a 3.75% 30 year(which had 24 years left) to a 3% 24 year term while simultaneously taking about a $24,000 cash out. My old mortgage payment with everything included was $1,475 and after the refi it went up to $1,613.
I used all of that cash out to immediately pay off our credit card debt. I put the extra $2,000 in our savings account, which combined with our tax return gave us some much needed breathing room and a small emergency fund. By paying off those cards we are saving around $550-600 per month just on minimum payments. Minus the difference in mortgage payments and we’re still ahead by minimally $415/mo.
My wife is a part-time teacher and her take home pay is enough to cover the mortgage payment 9 months out of the year. The 3 months she isn’t paid my income covers everything and anything we do extra such as a small vacation or additional purchases we just pull what we need from the savings account. We’ve learned to slow down what we spend so we aren’t making a huge dent in the saving through the summer like we used to.
If you’re this far down thank you SO MUCH for reading this all! I’ve never been good with managing money and I just want to make sure I didn’t step in some pitfall or disaster I didn’t think about.
Am I good or was this not worth the higher mortgage?
Submitted August 14, 2021 at 05:57AM by splitbmx248 https://ift.tt/3lXBa5A
