Thursday, December 31, 2009
One thing I'm not too thrilled to admit is that I failed to meet one of my 2009 Resolutions of paying off my smallest loan, titled "law school loan." In January when I declared that I would pay it off this year the balance stood at $1932 and today it stands at $1269 despite the fact that I paid more than the amount due and threw a couple of extra payments at it throughout the year. The 8% interest is killer.
Anyway, more beating myself up about failing my resolutions will come later. For now, here are the cold hard facts:
Not a bad month. Here's hoping 2010 brings a lot more progress.
Monday, December 28, 2009
Recently I had my annual exam and pap smear. This was actually the first time I've ever gone to a private OBGYN practice to have this performed as previously I went to my regular family doctor, the college health center and most recently my local Planned Parenthood. I liked the Planned Parenthood, especially when I didn't have "real" health insurance during law school and it is in walking distance from where I've lived the past 6 years. But I figured it was about time I established a relationship with a local practice because one day I may need care that's more than "preventative" if you catch my drift.
The appointment was fine (as fine as any half hour of your life in which you are prodded in such a personal way) and I paid a $20 co-pay when I left. Today I received a bill in the mail for an additional $10 for charges not covered by my insurance. The statement itself was enlightening.
My doctor's office attempted to bill $210 for the visit alone, of which I paid $20 and the insurance company "adjusted" payment was $56.
The pap smear is billed at $35, of which my insurance paid $27 and I am liable for $8.
The lab work is billed at $9, of which my insurance paid $7 and I am liable for $2.
Total charges = $254
Total paid by insurance = $90
Total paid by me = $30
Damn. Last year at Planned Parenthood, $35 got me my annual and six months of birth control pills. No wonder insurance companies are looking to do away with the annual exam.
Wednesday, December 23, 2009
Still have to get one (or maybe two) small presents before Christmas and want to make a charitable donation before the end of the year.
But here's my budget for the next two weeks and into the new years:
Starting Balance = $1280
Charity - 50
Wedding Savings - 500
Christmas - 75
Law School Loan - 54
Perkins Loan - 93
Misc. - 183
Here's hoping the rest of the year goes smoothly!
So just want to pop in and check on my budget. Something is off since I had $50 extra in my account today even though it looks like I went over budget...but that's okay because I have to turn around and pay my credit card today so that money will soon be out the window.
Anyway, here's where my money went for the past two weeks compared to the budget I set:
Groceries - 100/100
Sallie Mae - 407/407
Defaulted Student Loan - 260/260
Nice Collection Agency - 125/125
Sprint - 74/74
Holiday Shopping & Parties - 200/150+
Misc. - 101/240
A lot of the miscellaneous spending is holiday related but I just lumped it all together for convenience.
And since I got paid today now I get to figure out how the rest of my financial year will go.
I want to post a year end wrap up but that will probably have to wait until after Christmas.
Tuesday, December 15, 2009
Well we finally got out appraisal back and the news isn't so hot. Instead of the $155k we were hoping to get, our appraiser valued the condo at $150k. Boo. And so off in my humble opinion. Based on comps and improvements we've made I think our value should be at least $160k.
But the appraiser 1) used comps from older buildings; 2) used comps from our building for units that have not done any remodeling. We have a brand new kitchen and hardwood floors whereas the other units have old kitchens and carpets!
We are in the process of challenging the appraisal but if worst comes to worst we have to come up with close to $5k to cover the closing costs ourselves.
It totally sucks but I know in the long run getting a mortgage rate 2 points less than our current mortgage rate will save us a lot of money.
Updates to come!
Wednesday, December 9, 2009
I'm happy to report that most of our Christmas shopping has been completed. We managed to snag one present while at the supermarket and my fiance used his Christmas savings to buy most of the rest, minus a present I got for my parents.
Still have a little more to do...plus an office grab bag ($20), supplies for the office holiday party, a bottle of wine for a group holiday party, and materials for a Cookie Swap. Don't you just love the holidays?
Anyway, so here's where my money will be going over the next two weeks.
Starting Balance = $1267
Groceries! - 100
Sallie Mae - 407
Defaulted Student Loan - 260
Nice Collection Agency - 125
Sprint - 74
Holiday Shopping & Parties - 200
Misc. - 101
We got some less than good news about our refinance, but I'm waiting on more details before I post about that.
Wedding savings is on hold most likely until the new year due to yet another recent development but some wedding spending will be going on very soon too (time to pay those installment payments!).
For those of you in cold regions of the world, stay warm, and for those of you in the warmer areas, count your blessings!
Wedding Savings - 500/500
Groceries - 75/0
Christmas - 150/156*
Law School Loan - 136/136
Perkins Loan - 93/93
Misc. - 126/280
Wednesday, December 2, 2009
After hearing about the program again, I decided to finally make a decision before too much time has passed.
I knew from hearing a coworker's experience in applying that my job counts as "public service" so that question was resolved.
My next question was "how do I know the loans will really be forgiven after ten years?" Will there be an income cut-off or does my current income qualify me as just broke enough to have the loans forgiven no matter what (after I get married I will have to use our joint income of course). I still can't find an answer to this question, but here's one example I did find:
Example: Jane Justice started out owing $100,000 in qualifying debt at 6.8%
interest and took a full-time public service job with a starting salary of
$40,000 with annual increases of 5%. Jane stayed in public service and paid
$49,132 over 10 years under the IBR plan. The federal government cancels
$118,868, the principal and interest remaining.
Sounds good, right? Wrong. I pretty much AM Jane Justice...except I make slightly more money, have slightly less "qualifying" debt at a lower interest rate than 6.8%, and anticipate greater salary increases than 5%.
But to qualify for the program you have to pay your loans in one of three ways:
Income Based Repayment (IBR) Plan
Income Contingent Repayment Plan
Standard Repayment Plan with a 10-year repayment period
Any other Direct Loan Program repayment plan, but only payments that are at least equal to the monthly payment amount that would have been required under the Standard Repayment Plan with a 10-year repayment period may be counted toward the required 120 payments.
From here. I'll let you navigate that mumbo jumbo before I attempt to explain it.
I figured out right away that I didn't qualify for the Income Based Repayment Plan because I made too much money (ha!).
The Income Contingent Repayment Plan was less appealing since it only allows discharge after 25 years and you end up owing taxes on the amount discharged.
I thought maybe the Standard Repayment Plan would work but I still wasn't sure. I tried a few online calculators but it was all confusing and I wanted to hear the news straight from the horse's mouth.
So I called up good old Aunt Sallie Mae and got the skinny:
Yadda yadda you have to apply, yadda yadda we can add your Perkins loan to your payment, yadda yadda.....your payment will increase to $795.30 a month.
Excuse me? I am only paying $406 a month on my federal subsidized and unsubsidized loans. Throw in the $93 a month I am paying towards the Perkins loan (which will be gone SO much faster than 10 years from now) that amount only totals $499.
"Let me get this straight," I said, "you want me to give you $300 more a month so in ten years if maybe I have stayed a humble public servant the federal government may possibly forgive the rest of my loan?"
Click. Goodbye. At least now I know I made the right decision.
The explanation, apparently, is because I am on the level 30 year payment plan (where I pay the same $406 every month for the next 28.5 years) my payment is lower than it would be if I started paying based on the 25 year plan. But paying $300 more a month sounds like a crap gift to me, right?
And yes, I do realize that technically it would have possibly maybe saved me some money in the end but I plan to be rid of these loans in ten years without Uncle Sam's help thank you very much.
Tuesday, December 1, 2009
With rates at such low levels, however, we are trying to refinance already.
From my post when we first bought the place:
Estimated Monthly Payments
Mortgage = $937.68
Taxes = $175.00
PMI = $61.38
Currently Monthly Payments
Mortgage Principal = $146
Extra Payment to Principal* = $102
Mortgage Interest = $828
Escrow** = $256
*My fiance has been sending an additional payment of $102 a month so we can get rid of PMI sooner. Smart guy!
**Escrow includes PMI and taxes.
So...it seems we are paying $53 more a month than what we had originally estimated (before our extra payment to the principal). I'm not sure why that is but I suspect our taxes went up. I tried to look up our taxes online but the city's website isn't showing anything under fiance's name or our street address. I'm sure my fiance knows more but he's a busy guy today.
I do know this....our current mortgage rate of 6.75% bugs the hell out of us. With rates being offered under 5% to new buyers and buyers who are at risk of default, it seems like we are missing out. At one point, my fiance thinks that since we have so little equity in the condo and since we have an FHA mortgage already backed by Fannie Mae, that maybe we did qualify for the Making Home Affordable Program.
But like all other real estate questions I've seen, this one is complicated even for my legal trained mind. First, we called our bank and they said not only could we refinance at a lower rate, that there would be no closing costs or an appraisal!
Then, they called back and said there would be closing costs. The next call was to say they no longer offered refinancing on condos (ugh!).
Frustrated but not defeated we shopped around until we found a loan company that would refinance our loan at a better rate....with closing costs and fees of course. And we needed an appraisal.
So the appraisal was today! We cleaned, painted the kitchen (finally!), organized and staged. I hope it went well. It's a little frustrating because someone in our building is trying to sell off his multiple units and has priced them below market. And according to my research, a condo appraisal must use comps from the same building.
The loan company told us the appraised value must be about $1500 more than the purchase price of $152,659 in order to tack on the closing costs to the loan. Otherwise we would have to pay them out of pocket or they might not even give us the refinance.
We will hear back in a few days and then we can figure out what to do next, including plugging in the costs/benefits into this nifty "should I refinance?" calculator I found.