Thursday, August 19, 2010

Financial Stuff

An anonymous reader requested I talk more about the financial stuff of my house purchase.

Just to recap, I bought my house with my parents. They have a one third share and I have a two third share. We have separate mortgages so that we can manage it as we see fit, making extra repayments and whatnot. My mortgage is for $262 000 (it's already down to $259 000, yay!).

I got extra on my loan so that I could pay my car off, so I now own that outright which has significantly lessened my monthly burden.

I have an offset account with $10 500 in it. This is not only my emergency fund but also my savings account. I like to save up for large purchases like insurance, registration and the like. I prefer to put a little away each pay to ensure that when those bills do roll around, I'm not trying to find the cash for it. I will be saving up for these into my offset account, that way I am helping to reduce the interest I pay.

I have chosen to pay my mortgage fortnightly so I can pay an extra month per year. My minimum fortnightly contribution is $835. I have decided to pay $900 a fortnight, at least for now. Once I am more comfortable with this new idea of living in a house, I hope to increase that. I am also getting a pay rise in October, all of which I plan to put on the mortgage.

I don't plan to go crazy, still planning to save up for things like travel. However, if say I don't spend my entire grocery budget for the week, I will put whatever is left over straight onto the mortgage because I wholeheartedly believe that every little bit counts!

Any questions? Any advice?

3 comments:

  1. wow that is efficient. I really look up to this!

    How do you go with budgeting that much of your wage every fortnight? Do you still socialise/buy the little luxuries or does the end result out weight the smaller details for you?

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  2. didn't mean to make my former request anonymously but thanks for responding. So of course I've got a bunch of questions that you can use as a starting point for another post. I'm Canadian so I'm not very familiar with the Australian system. What's an offset account? Do you have a fixed rate for variable rate. If it's fixed is it for the entire term of the mortgage? Any plans to rent part of your house to others? Where I live in Vancouver it's very common to put a suite in the basement of the house and use the rent to subsidize the mortgage.

    Thanks for the info, I always find it interesting to hear about the financial choices others are making.

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  3. I take it that you earn a fairly good wage, on my pittance of a pay packet I would never have enough to live on my own, even paying cheap rent. I do so admire you modern self sufficient Women

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