need help deciding next steps with our finances

[Snydley]

Having trouble with the attachment so I'll write it out.
OPTIONS:
(1) Interest 4.15%, owe 354K, monthly payment $1,754...this means 29 years to pay it off and $610,392 paid.
(2) Interest 4.15%, owe 354K, monthly payment $2,153...this means 20 years to pay it off and $516,720 paid.
(3) Interest 3.5%, owe 354K, monthly payment $2,053...this means 20 years to pay it off and $492,720 paid.
(4) Interest 3.5%, owe 321K, monthly payment $1,861...this means 20 years to pay it off and $446,640 paid.
(5) Interest 3.5%, owe 321K, monthly payment $2,090...this means 17 years to pay it off and $426,360 paid.

Correct?

[Goldy]

Here is a link to a nice calculator I just found today that allows you to compare up to 4 different mortgages. I rad some numbers for you and here is what I came up with.

1) Current mortgage with an extra 400/mo for a payment of $2,154.84 costs a total of 540k and is paid off in 20y 11mo.
2) Refi current balance to 3.5% and put monthly mortgage savings into payment in addition to the 400/mo you are already contributing. Same payment of $2,154 but the loan is paid off in 18yrs and 9 months with a total cost of 482k. (would probably need to pay PMI)
3) Use some savings to bring loan to value ratio down to 80% and keep payment at $2,154 by adding $713 per month brings the loan down to 16.4 years with a total cost of 421k.
4) (and my fav option), bring loan down to 321k as above, refi to 3.5% for a payment of $1,441/mo, add 400/mo to payment bringing your mortgage portion of the payment to $1,841. This is less than your are currently paying for your mortgage and reduces the term to 20.4yrs.

[Gina23]

So the $17,500 max per year does not include the what DH's company matched? So we put in $10,160 more?
If my DH puts in more into his 401K, this then lowers his MAGI therefore enabling us to put the max into a ROTH IRA? If so, that's great news.

I apologize in advance for not reading through all of the replies, however, if DH works for an Higher Education institution as you do, what he is contributing to his "optional retirement plan" doesn't count at all toward your 17500 limit. I am also in Higher Ed and participate in an optional retirement plan in which 5% is company matched at 10% (similar to him) and after that I still am legally able to contribute 17500 to a 403(b)/401(k).

[Snydley]

I apologize in advance for not reading through all of the replies, however, if DH works for an Higher Education institution as you do, what he is contributing to his "optional retirement plan" doesn't count at all toward your 17500 limit. I am also in Higher Ed and participate in an optional retirement plan in which 5% is company matched at 10% (similar to him) and after that I still am legally able to contribute 17500 to a 403(b)/401(k).

DH works at a for profit (biotech). He did just increase his 401K contribution to the max today! Very exciting.

Goldy- I found an excel sheet with an amortization template and was able to recreate the your figures. I talked with DH and he's just too nervous to take from the savings; the reality is he could be laid off tomorrow and I only make 50K right now. We are now seriously looking into refinancing (since your posts) and we'll be adding $400/month to our mortgage payment as well. Thanks again!

jen

[Goldy]

Great to hear!

I totally understand where he is coming from with regards to the refi, it is a large chunk of change and given the uncertainty of the job I think it's a good call to hold off on that for a little while. In a year maybe take a look again to see how much it would take to bring your loan down to 80% since it will be less.

It sounds as though you are both on the same page. Good luck!