My Big Fat First Mortgage

This starts out like a Yo Mama joke. My mortgage is SO big... I'm not even comfortable divulging the total. Lets refer to the balance in a way that protects the innocent. 

$X55,000.00 

And its safe to assume that first number is not a one. 

A little history...

When we bought our house 3+ years ago, the principle balance was $X82,000.00. That was after putting 20% from the equity in the house we later sold. So in 3 years, we've paid off just shy of 30K. Im pretty happy with that. Especially considering the financial turmoil we've been through. 

At the time of purchase, we weren't necessarily biting off more than we could chew. These were the times of plenty. In the beginning it was no big deal to carry our shiny new mortgage AND the paltry payment from our previous house. We did that for 3 months or so. It was surprisingly easy. Although I was certainly happy when house #1 sold. 

In any case, our mortgage payment represented right around 30% of our monthly income, as recommended, and all was well. For our circumstances at the time, it was not necessarily a bad decision. 

Enter unforeseen circumstances. 

This is the part where I try not to focus on the coulda and shouldas. 

Mere days after the sale of house #1 completed. I was informed that my job was being outsourced. More on that later, but the long and short of it is, that over the course of the next 3  years that payment often became 50% of our income, sometimes more. No the interest rate didn't adjust. But, our income certainly did. I've come to think of The Mortgage (and sometimes the house itself) as the monkey on my back, a burden to be borne, the albatross around my neck. 

How to change those circumstance has been perplexing me for some time now. Even if we are back to a cushy double income lifestyle, the writing is on the wall. As long as we have this mortgage as it stands now, the flexibility of our lifestyle is limited. Our monthly overhead is too high.

So what our my options? 

Moving. Even with the plummeting house prices, we aren't exactly upside down. But close enough that after real estate fees, it would almost certainly cost us money out of pocket. As long as we've been able to make the payment, this is something I've avoided. For us, the logistics of moving, suck. Selling this house while it contains our menagerie would be difficult to say the least. The only feasible way is to buy another house first, move everyone there, and sell this house uninhabited. We have not had the cash flow to carry two mortgages. Moving doesn't really work. 

Truth be told, we like this house. We are comfortable here. The pack of mutts is comfortable here. Its close to our network of friends. Close to the city, and work. It's big enough that we can garden, entertain, and not feel like we are on top of each other or our neighbors. Not too old. Not too new. Well-Maintained. The house is a keeper. During all our trials and tribulations, when I would lament our lot in life, we always came back to "If you have to be stuck somewhere, this place ain't so bad". And its true. The price tag stinks, but we' d just as soon stay. 

This brings us to an obvious second choice; Refinancing. Much like moving, this is also something I've avoided. Until recently the conditions have not been favorable. We bought our house before prices took a huge tumble, but interest rates were still rather modest. Every time I've made an inquiry with our credit union, it would take us years to re-coup the closing costs of a refinance through money saved on our monthly payment. Once again, as long as we were able to make the payment, I avoided rocking the boat. 

And make payments we did. Even in the worst of times, we've always been able to put just a little something extra towards our mortgage. $50 here $100 there. Even just $25 or the odd windfall. I try to do it before I think too hard about where else that money can go. That's the only reason's we've been able to pay off nearly $30K. A little here and a little there.

I have a number in my head of what I want our mortgage payment to be. It's about $600 less than what we are currently paying. With the rates now, and the principle we've paid off, I can get right in that ballpark, which is kinda hard to believe. Still it going to take some work. They aren't handing out mortgage like they used to.

Yes, with circumstances as they are now, I could keep my high mortgage payment and keep plunking away at it. The lower monthly payment is my primary concern. After my own job loss and The Husband's employment drought, this mortgage has made our lives quite difficult. I can always pay more of my own accord. They don't take too kindly to voluntarily paying less. Even now. I consider lowering this payment, a step towards shoring up my financial house against disaster.

My first mini mission: to unfreeze my credit report with one of the 3 bureaus.
I froze it when our house was broken into some months ago. That was no easy task then, and unfreezing it is proving to be an equal pain. I need to get this done before the re-finance can proceed.

Next: Keep paying down the principle. When I said our balance is $X55,000.00, that is exactly what I meant. I've been paying it down to a nice round number as a game I play with myself. Also, I'm considering this re-fi a one shot kind of thing. It behooves me to pay as much as I can now, to refinance for that much less.

Furthermore: Consider the benefits of applying a cash lump sum to the principle balance. This would eliminate some of my precious cash cushion. I might actually consider that in exchange for an even lower payment, and   the flexibility I am looking for.