When my dad bought in 1968 his monthly paymentwas 68 dollars which included escrow to cover prop' tax and home owners insurance. 30 years later the monthly had risen to 172 dollars per month.
I still remember coming in from school to find dad sitting at the kitchen table cutting up credit cards too. He had done a consoldation loan then slowly built dept on all those cards again. He taught me some valuable lessons.
I signed 10% for 25 years with Jum Walter Homes. Refinanced during the 3rd year to a 20 year note at 8.39% . Chopped off nearly 2 years without a payment increase.
Because I didn't play the escrow game my payment has never changed from 604 per mo.
Never sent them an extra dime either. There were times when i could have paid extra toward the principle. About 8 years ago I had an opertunity to pay the balance off completely. There were even more times when I was very glad we didn't, especially the nearly 3 years my wife couldn't find a job. We had always had extra money withheld from our wages that guarenteed a tax refund which would cover the property taxes and home owners. That doesn't work when you dont have a job.
When a half dozen friends and neighbors said I was crazy for not putting my money in Carolina Investors for 7.39 gains, I just agreed , "Yep I'm the crazy one". It was a scam and they lost their asses.
Some will point out the flaws in my method to the madness like loss of interest earned on that tax withholding method of saving and/or point out the interest we've paid out too. I consider that the fee we've paid to play by their rules, honor our commitment to the terms and maintain our credit rating over all the years.
Come August 2014 we'll have a mortgage burning party without a single regret.
Everyone has to figure out what is the best plan for their own income, debt, and spending habits.
Good luck to all.
