Tuesday, April 07, 2009

Interest

We were trying to get our taxes done last night and realized we didn't have a tax statement from the bank. I called and asked what interest our savings (and we actually do have money in savings) has earned. A whole $6.26. Wow. I sure am glad I put that into my savings account instead of just keeping it in my checking!

And yet, when we were looking over our house loan interest and realized that if we really took the whole 30 years to pay off our loan amount, we realized we'd pay $94,000 in interest!! That's nearly DOUBLE (ok, not quite double) our original loan amount. That's roughly $3000 in interest we're charged per year.

Man we get screwed.

11 comments:

Jodi said...

You must of gotten your home for cheap if 94K is nealy double. i heard TX is afforadable, but that is really good! It is crazy the amount of interest we pay.

Celia Marie (W.) B. said...

No. I'm exaggerating. For our 1500 sq/ft home we paid $135K. It just seems like $94,000 is like buying a second house along with it.

Erin said...

I'm in utter shock over getting a 1500 sq/ft home for $135k! I really did not know you could get houses that cheap anymore! Guess I'm turning into a New Yorker.

Anthon and Jennifer Ellsworth said...

That's why I hate to think about that stuff. It makes me so flippin' mad.

Juls said...

FIRST...HAPPY BIRTHDAY!

If you make one extra payment a year you save THOUSANDS of dollars and years off your loan. We are trying that approach. Our saving used to give us a good return (4%) but with the down turn in the economy we are only getting 1.5% whereas I know that our bank savings is only .08% yeah, nice.

Celia Marie (W.) B. said...

I pay enough every month extra in principal to total a full mortgage payment. We're hoping that helps. I wouldn't be opposed to looking into refinancing and switching to a 15 year mortgage. That's a little risky, though, because it's harder to keep up if something bad were to happen like losing your job.

Laura said...

I realized that the other day too - how much interest we end up paying on a home is crazy! I told Shane it ALMOST makes me want to rent for the rest of my life. Almost.

Celia Marie (W.) B. said...

*to total a full mortgage payment at the end of the year. I should have been clear about that.

Heather and Ryan said...

I hate interest too. I hate that it controls your life. I'd love to get to the point where we can buy a house for cash. Yeah, that would be the day, huh? You must have a pretty good interest rate, though. Usually a typical home loan would make you pay at least the loan amount in interest, and can be up to double the loan amount.

I've looked into changing to a 15 yr from a 30 yr and it's really not worth it, unless you can get a MUCH lower interest rate. You would be better off doing what you are doing, just in case something happened to your income.

3000 in interest per year really isn't that bad if you think about it. It's only about 250 per month. Some people pay that much just on credit cards for luxury items.

Celia Marie (W.) B. said...

na. we have a kind of crappy interest rate of 6.4% If we were to refinance I think with this housing bust we'd be able to get a much lower interest rate. I mainly hate that you have to pay for the interest first. I wish the principal to interest cut was different. And that the money we lend to the bank (in our savings) would give us a better interest return.

Kristeee said...

Ugh. My old boss used to say that there's a reason why the tallest buildings in cities are the insurance companies and banks. Thieves!

I'd look into a refi if I were you. We just finished ours at 4 7/8. We've kicked around the idea of a 15 year loan instead, but didn't want to be locked into making the payments.