September 2012 Debt Snapshot

Here is another update on our debt. I've been looking at this over the past year as I'm primarily interested in improving our cash flow. I don't see paying down our mortgage debt as the best return on our money, but I do see improving our cash flow critical for maximum flexibility for future opportunities or dealing with unexpected income loss.

I recently made a move to transfer a higher fixed APR mortgage balance to a variable apr equity line to reduce my carrying costs.

Here is what our mortgage balances looked like in July:

Loan

Description

Property

Balance

Payment

Matures

1

5.6% 30yr fixed

House #1

$41,747

$1,031

Aug-31

2

HELOC @ 3.25% var.

House #1

$25,890

$75

Aug-23

3

IELOC @ 4.25% var.

House #2

$7,726

$100

Jul-29

4

4.375% 30 yr fixed

House #3

$248,116

$1,508

Sep-40

5

5.0% 30 yr fixed

House #4

$120,753

$996

Sep-41

 

 

Total

$444,232

$3,710

 


After the transfer of Loan #1's balance to Loan #3 in August/September:

Loan

Description

Property

Balance

Payment

Matures

1

5.6% 30yr fixed

House #1

$0

$0

Done

2

HELOC @ 3.25% var.

House #1

$25,787

$75

Aug-23

3

IELOC @ 4.25% var.

House #2

$46,452

$564

Jul-29

4

4.375% 30 yr fixed

House #3

$247,367

$1,508

Sep-40

5

5.0% 30 yr fixed

House #4

$120,466

$996

Sep-41

 

 

Total

$440,072

$3,143

 

The main benefit here is the minimum cash flow required has been reduced from $3,710/month to $3,143/month. Keep in mind there was an escrow payment included in Loan #1 (and not in Loan #2) of ~$300/mo so technically I should be putting that away myself and our minimum cash flow would be reduced by about $270/month.

That is nearly a 10% minimum cash flow reduction and about $50/month saved in interest on our current balance. Small steps, but further progress in improving our cash flow.

Im also keeping a close eye on rates and considering refinancing Loans #4 & #5 if there would be a clear payback in doing so.

Related in Real Estate:

No Closing Cost Loan Example (Nov 29, 2012) I've gotten multiple requests to clarify the recent no closing cost refinance loan I just completed. Its a bit of a vague term and could be done different ways, but the end result is that there are no out of...

3.5% 30 Year Fixed No Closing Cost Refinance (Nov 27, 2012) We finally closed this week on our 3.5% 30 year fixed refinance with no closing costs (no closing costs = a credit from lender/broker large enough to offset refinance costs). It took us over 2 months (67 days from initial...

Appraisal Appeal Unsuccessful (Nov 05, 2012) Not much of a surprise, the appraiser dug in and didn't budge after we submitted our appraisal appeal: Our more favorable comparables were based on county property records. Interestingly the appraiser indicated the MLS data is generally considered more accurate...

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