New Mortgage

We are now 2 months in on paying for our new mortgage.  I have NOT been paying the additional $150 to make it a 10 year mortgage thus far; however, when we get our debts paid off and have our emergency fund funded to at least 3 months of expenses, I will start to add well over the $150 to make up for lost time and pay the mortgage off within 10 years or less.

When I looked online today, I was able to see how much is going toward the principal and how much is going toward interest (something I was not able to do when we had the line of credit.)  Right now, 55% of our payment is going toward principal.  That doesn’t sound like much, but it was over 60% going toward INTEREST every month when we had the higher interest rate.

Even though we refinanced at a higher amount than we owed (to cover the closing costs,) I am happy we did this.  The closing costs will be paid off from the principal within the first year assuming we do not pay anything extra on the mortgage. 

The New Mortgage

Todd and I signed the paperwork a couple of weeks ago our refinanced mortgage.  Just to recap, we originally bought our house in 2007 – got a 20 year, 5.99% loan.  3 years later, we refinanced for 15 years at 3.85%.  We are cutting 2 years off of the mortgage, have a lower payment every month (not by much, but it still counts!) and will save over $25,000 in interest charges.

If we pay an additional $150/month, the mortgage will be a 10 year mortgage.

How awesome is that?  I would be 40 – Todd would be 50 if we were to pay the additional $150/month.  

We are on a debt payment budget right now, and strongly believe in Dave Ramsey’s teachings.  That being said, I am thinking about straying a bit from Dave’s teachings and pay the additional $150/month while paying down our other two debts (Todd’s vehicle loan and his credit card from BEFORE we were married.)  I am considering trying to start selling items on etsy.com and making this extra $150 so that it does not effect the other parts of the budget.

Do you or have you sold anything on etsy?

What are your thought on this?  Are we doing the right thing?