One Year Anniversary Mortgage Update
After one year of mortgage payments and prepayments our mortgage information is as follows:
July 2, 2008 Original Opening Balance: $316,000
July 2, 2009 Year Two Opening Balance: $274,544
Reduction in Balance: $41,455
Percentage of Reduction: 13.1%
Average Monthly Payment: $4,606
Total Payments for Year: $55,276
Interest Paid for Year: $13,821
Monthly Payments Required to Meet Goal: $6,306
I am happy with the results in the first year, but improvement needs to be made. In order to meet the goal of being mortgage and debt free by July 2013 we will have to make a monthly mortgage payment of $6,306, an increase of $1,700 per month compared to the previous 12 months. Can we achieve this?
According to the guidelines of the Canada Mortgage and Housing Corporation they will insure mortgages up to 44% of a family’s total debt service ratio. This means your housing costs including mortgage, taxes and heat along with other monthly debts cannot exceed 44% of your gross income for the year.
Using a mortgage payment of $6,306 our total debt service ratio would be 45%. Being just slightly out of line with the CHMC guideline tells me we are capable of making the payment. We are both fortunate enough to have received raises this year and the business income is ahead 40% year to date from last year.
We are going to work on making more money with the business and spending less. We didn’t budget for the last year and early in July I am going to take a look at where our money was spent in June. I am confident we can reduce our spending by a couple of hundred dollars by reducing dining out and take out meals. I am curious what percentage of our income is going towards wants rather than needs.
I will post monthly updates of mortgage payments and reasons why we exceeded or fell short of our monthly payment goal.
All of my mortgage payments are tracked by an Excel Spreadsheet designed by I suggest you check out the site for all your financial calculation needs.
