by Vicky Monroe
Last year, my partner and I had a long stretch of a few months when we weren’t able to make any progress on our mortgage. Luckily we turned things around and have been steadily paying down our mortgage for the past few months. We’ve been averaging about $2400 per month in overpayments.
The next time we make a principal payment (which should be this Friday), our loan will finally hit the $130s. Our loan started off at $179K when we bought our home in January 2021, so I’m pleased that we’ve been able to pay off about $40K so far.
We’ll Probably Make Less Progress This Year
Unfortunately, we probably won’t be able to make as much progress for the next few months. In my last post, I wrote about the dental work that I need, including oral surgery to remove my wisdom teeth and Invisalign, which the dentist said costs $4K to $5K. So a lot of our savings over the next couple months will probably be going toward dental work.
However, I’m planning to get a second opinion about the Invisalign. My partner has the most perfect teeth I’ve ever seen, and the dentist still recommended Invisalign. I don’t really care how my teeth look, so I want to make sure straightening them is medically necessary before I sign up to wear plastic aligners 24/7, which I suspect I won’t enjoy.
After doing some research, I found out that there can be some pain and discomfort with Invisalign. Honestly, I’m a big baby when it comes to pain (especially tooth pain), so I’m a bit wary. I may try a night guard first (I just found out I’m a teeth grinder) to see how I tolerate sleeping with a retainer before I take the plunge and get Invisalign.
If you’ve used Invisalign, I’d love to hear your thoughts and experiences in the comments, especially regarding pain and discomfort while wearing the aligners! I’m still planning to save up for Invisalign even though I’m unsure, because I don’t want to go into debt if I make the decision to get it.
Mortgage Cost Increase
Another reason we won’t be able to make as much progress on the mortgage is that the payment just increased. Our property taxes went up by about $80 per year, which isn’t bad on its own. However, our PMI increased by $230 per year, and our homeowner’s insurance went up by $475 per year. We’re going to try to shop around for a lower rate. But if we can’t secure a better deal, our mortgage payment will go up to $1500 per month.
Our mortgage payment started out at $1350 per month when we bought the house and has gone up steadily over the past two years due to fee increases. We can afford it, and it’s better than the rent increases we had to deal with when we lived in Boston. But it’s still a bigger payment jump than we thought we’d experience as homeowners and will affect our budget.
We’re already pretty bare bones expense-wise, so there’s not a lot of room to cut things out to absorb this increase. As a result, our savings rate will probably go down a bit. Combined with the dental work, we probably won’t be able to make as much progress on our mortgage in the next few months.
But life happens and you just gotta roll with the punches! We may look into side hustling a bit more to help with some of these expenses, but luckily we don’t absolutely need to. And that’s something to be thankful for!
How is your debt repayment going? Let me know in the comments!
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Vicky Monroe is a freelance personal finance and lifestyle writer. When she’s not busy writing about her favorite money saving hacks or tinkering with her budget spreadsheets, she likes to travel, garden, and cook healthy vegetarian meals.
I had Invisalign a few years ago. There’s two types of pain I experienced and your mileage may vary with both. When I first got it, it took a week or so for my tongue to become accustomed to the edges of the trays. I spoke a little funny and my tongue felt scratched up. Then with each new set of aligners, I felt some dull pain for a day or two as my teeth were being pushed into their new position. It wasn’t bad overall. It was less painful than when I had braces as a teen.
If you’ve paid off 20% of your loan, you should be able to have the PMI removed. Look into the process.
Unless your home took a big hit to value, with that big a chunk paid off you should look into having PMI cancelled altogether.
You shouldn’t be paying PMI at all at this point as you’ve paid more than 20% of the mortgage. contact your lender immediately to get that removed
If you’re up to 20% equity, have you tried getting your PMI removed? You might be able to strong arm the bank into doing it without a refinance.
Unfortunately we have an FHA loan, so the PMI never falls off.
Why is your PMI going up if you’ve been paying down your mortgage?
We have an FHA loan and according to my research, the FHA itself collects the PMI on these loans. And they’re allowed to raise PMI on borrowers who put down 5% or less. I think we put down 3% or 3.5% so I believe they’re allowed to raise it on us.
hello, I suggest removing the escrow account and PMI from your mortgage if you are able. These are both holding your money hostage and ripe for mishandling by the mortgage company (unpaid taxes or insurance, etc). You can save that money on your own and pay it as it is due.
You’ll have to run the numbers with rising interest rates to see if this makes sense, but if you are paying that much extra you’d probably be able to refinance and get rid of the PMI – we did this with our house several years ago (again, lower interest rates then)
Can you explain more how your mortgage is increasing $1500/month? The increases you wrote about are $785/year.
The mortgage payment is increasing to $1500 per month. We had an increase last year that brought it from $1350 to $1422. Then this fee increase brings it up another $65 per month. But the mortgage company is increasing our payment to $1500 because they’re required to have extra money in the escrow account as a cushion.
If you can’t get rid of PMI on an FHA loan look into refinancing with a more conventional loan. Interest rates are high right now but it still may be cheaper. If not, keep an eye on rates and refinance when they go down.
Ah I think based on what I see now in comments, you have a FHA loan. so I think you’ve actually just confused terms, and you likely have MIP (which is different than PMI for a conventional loan). The key one being MIP cannot be cancelled without refinancing.