or payment #2 since refinance.
The regularly scheduled payment of $407.58 happened today. It had been 6 days since the last payment, so 6 days of interest came to $32.60, leaving $374.98 to go towards principal.
If I never pay another extra cent, the last payment will happen on 3/3/31. The total interest paid will be $13,735.76, a savings of $14,118.80 from the originally scheduled interest of $27,854.56.
I am including a snip of my spreadsheet here, since it is not showing up in "My Pages".
Viewing the '5th Wheel Loan' Category
or payment #2 since refinance.
Today is payday and that means it is time for another principal payment. They never seem to be as large as I would like for them to be.
Today I calculated that I had $208.82 available to send off to principal. I logged on, scheduled the payment for today, and voila, I am somewhat less in debt.
The final payment moved up a month to 3/3/31.
I have now eliminated more than half of the originally scheduled interest. Mostly by refinancing, but still.
It snowed yesterday evening and more is expected. SB took our travel trailer and Bella and headed down to my mom's yesterday, to avoid pulling it in the snow. I will head that way too directly from work tonight. The snow should be gone before we go home, probably Sunday.
Have a wonderful Thanksgiving weekend with your loved ones, SA friends!
Today is payday, and my paycheck is received via direct deposit. My checking account balance this morning after my cash withdrawal was $2,454.54. From this, I need to subtract my sinking funds transfer ($230) and my dentist bill ($393.40, charged to Citi double cash MC yesterday) and then leave 1k in checking. That means there is $831.14 available.
I logged on to my bank account and transferred $831.14 to my 5th wheel loan. I have calculated the interest due* and updated my spreadsheet and my sidebar. I will check in a few days to see if my calculation is correct or if I need to adjust.
*Bank of the West deducts accrued interest first from any payment, then applies the remainder to principal. This is not as advantageous as what I have previously experienced, that interest is paid only from the regular payment and any extra payment is applied 100% to principal.
My final payment date is now 4/3/31, 6 months ahead of schedule.
For me, this was the deciding factor in how big a priority paying off the 5th wheel loan needs to be.
If I were to retire NOW, I calculate that I could draw $1,456 per month from my nest egg. Here is how that budget would look:
Everything I need, but not much fun. Without the 5th wheel loan payment, I could increase those sinking fund contributions and have more discretionary dollars. In short, my financial situation would be greatly improved.
Plus, I intend to cancel my life insurance policy once the 5th wheel loan is paid in full, freeing up a few dollars there as well. No one depends on my income any longer. However, in the event of my death, I would want SB to be able to have the 5th wheel free and clear. My children are both self-supporting and will inherit my investment and bank accounts.
So, I am happy with this plan. It makes sense to me.
I have been mulling over how I want to prioritize paying down my 5th wheel loan. Do I not fund my Roth? Do I cut my sinking funds? Do I cut my 457 plan contribution?
I have decided the answers are yes, yes, and no.
I calculate that in 24 months or sooner, I can get the balance down to where I can pay in full from savings. This is what I am going to do.
I have cut both my travel sinking fund and car replacement sinking fund contributions to $0. I have trimmed both my car r&m and car ins/reg sinking fund contributions slightly, but they should still be adequate. This brings my bi-weekly transfer to sinking funds from $380 to $230.
I will not fund my Roth IRA for now. I will leave my 457 plan contribution where it is, 10% of gross.
(I will still take the Panama Canal cruise with my mother. She is looking forward to it and I am not going to take that away from her. She is turning 87 next month, so who knows how much longer she will be able to travel. Currently, there is almost 4k in my travel sinking fund which will more than cover it.)
24 months from now, the 5th wheel loan balance should be under $16,962.08, the current balance in emergency fund + car replacement fund. At that point, I will use as much of them as needed to pay the loan in full. (But not sooner, as I don't want to be without them PLUS still have a loan payment to make). At that point, I will turn my focus to re-building savings.
or #1 since the refinance.
This month I managed to scrape an additional $224.01 to principal. This brings my remaining payments to 142, or 11 years and 10 months, with one of those being less than a full payment.
If amortization tables interest you, you may notice that I have Frankensteined the old and new loan amortization together. (Amortization table available for viewing under "My Pages"). It just made sense to me to do it that way.
I did receive a refund of $480.88 from my original lender. I am hanging on to $400 of it (in checking) as I have a dental appointment coming up and I expect to owe about that to the dentist. The remaining $80.88 is part of the $224.01. (I have a Health Care Reimbursement Account for medical expenses, but I have just had more of them than usual this year between some dental work and my first ever pair of prescription glasses. The money is nearly depleted for this year).
November is a 3 paycheck month so I expect to pay an additional $800ish next time. That's going to be FUN, I'm looking forward to it.
Originally Published 9/20/19
I signed the docs for my re-fi today. The new terms are as follows:
Term 12 years
Payment $407.58, to be automatically withdrawn from my checking account monthly beginning 11/03/19.
They waived the $399 fee, charging me only $15 to add their name as lienholder. My current lender gave a payoff number before I made my most recent payment, so they had the payoff as $44,985.00. I should receive a refund from my current lender for $500ish once all the dust settles.
Yay, it feels good. Smile
Originally Published 09/10/19
Yesterday's trip to the DMV was a success. So, with registration in hand, I submitted an application with Essex Credit to refinance my 5th wheel loan.
I expect that I may need to pay down the principal some. I bought the 5th wheel new and we all know what happens to the value as soon as it is used instead of new. I don't know the current value and I am not certain if they do 100% LTV or if it is less. Will just have to wait and see. What I do know is that I would much rather be paying 4.69% than 6.74%, so I will cough up whatever principal is needed to make it happen.
Originally Published 8/28/19
The next thing I want to focus on in my quest to pay off the 5th wheel is to get the loan refinanced to a lower rate. My current rate of 6.74% is not horrible for an RV loan, but I feel I can do better. Reducing the interest just gets me there that much faster.
I found a lender (Essex credit, a division of Bank of the West) who will refinance at 4.69%, but I need to submit my DMV paperwork along with my loan application. Uh-oh, obstacle.
The home mail delivery is very unreliable in our neighborhood. Mail shows up late, or your neighbor drops it by because it was delivered to their house, or the most common is that it never arrives at all. Complaints have been lodged with the local Postmaster for years and years, but nothing changes. So, most people just have a PO box. We do too, and the DMV has this information, but they continue to use my home address for my mail.
I have never received my license plates, registration, or other paperwork for my 5th wheel.
My car registration expired last February, and I still do not have my new tags. They mailed me a second set in June (requested via telephone), which also never arrived. I know the first set was mailed to my physical address because they told me so on the phone. I suspect (but have not confirmed) that they did the same with the second set.
So I need to go to the DMV in person to take care of both items. I made an appointment and it is a couple of weeks away.
Originally Published 8/24/19
Everything is paid for August, so it was time to make an extra principal payment. It is my habit to keep 1k in checking, then "sweep" all else towards whatever goal I am working towards. This month I was able to sweep $566.96, of which $147 was from a refund for DMV fees, and the remaining $419.96 was from regular income.
So that was a good month, and I hope to manage paying a similar amount every month, until it is done.
Updated snips of the amortization table are on my "5th Wheel Amortization" page, link in my sidebar.
Originally Published 8/12/19
Now that I have decided to make paying off my 5th wheel loan a priority, I have been thinking about different strategies to get the job done.
One strategy I intend to pursue is to get a 0% no balance transfer fee credit card loan if I can. I have Googled a bit, and have found a couple of offers for 0% for 15 months, no balance transfer fee. If I were to borrow $4,200, that's a repayment of $300 per month for 14 months (I always plan to pay in full the month before the offer ends). It adds a bit more hassle to juggle both debts, but I would save an additional $334 in interest by paying a lump sum of $4,200 up front vs. paying $300 per month over 14 months.
So I will apply and see if I am approved or not.
A second item is that I have raided my Roth sinking fund. I had been depositing 5% of my gross pay to it each payday, with the intent to contribute the money in 2020 (I had already contributed the max for 2019). I am using part of the money for medical expenses (more on that later), and the remaining balance of $1,130.81 as an additional principal payment. I will schedule the payment as soon as the money hits my checking account.
Originally Published 5/15/19
It would have been more practical to buy the 5th wheel our friends were selling, or some other used 5th wheel. But, I decided that I wanted the beautiful new 5th wheel with extended warranty.
So, I bought it. The same one in the pics I shared in my post "Tow Vehicle Purchased". We have not yet taken delivery. The dealer is installing a tankless hot water heater and slide out "toppers" (covers to protect the roof from leaves and dirt while the slide is out). Plus, we need to have a 5th wheel hitch installed in the truck bed. (Which of course can't happen until we get the truck back from the dealer. Grr!).
I am very pleased and looking forward to living in my new home. We will keep our current travel trailer as a "guest room" so that family & friends can come up and visit us.
My loan payments are $417 for 15 years; the interest rate is 6.74%. I have already found that a lender called Essex Credit, which is funded through Bank of the West, will refi me at 5.15%, dropping my monthly payments to $375. However, I will have to wait as they require copies of both a loan statement and DMV registration; I have not yet received either one. I had checked with Wells Fargo before taking the financing the dealer offered; WF's best rate on an RV loan is 11.59%, and goes up from there. I could not believe it. I think they must be wanting to get out of RV financing altogether.
I think I am just going to pay the loan one payment at a time and direct extra dollars into savings.