The American Dollar
One industrious American family's focus on a financial goal of freedom. Through worldly personal finance education, here is our story.
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Our Story: Both my wife and I are 27 years old and have gone through financial hell and back. Now we are on track to financial freedom, however we are not financial advisors or professionals, just everyday people. Share our journey from a negative networth and email us if you have questions or comments! :)


Wednesday, September 06, 2006

Our Mortgage

I'll admit I have a mortgage... a bad mortgage... an ARM mortgage. This 5/1 ARM was given at such a low interest rate that I couldn't get away from it. I know that I could have went with a 15 year or a 30 year fixed however I believe its all psychological. Lets say I decided to get a 15 year... more than likely I will pay it off in 15 years maybe throwing an extra payment here or there. With a 5 year ARM, even though it is amortized at 30 years, it gives me a psychological bearing that makes me pay it off in 5 years. Also I have a plan, which alot of these ARMers don't have. Plus my wife and I are really disciplined with our finances to pay it down in 5 years. I read so many posts, blogs, articles etc, on people that have the mentality that they will just refinance when the ARM comes due. Really this just sets you back to the 30 year process and starts the high interest payment cycle all over again. With that, the ARMs are probably only going to adjust upward with the way the housing market is going. I say if you take a 5 or 3 year ARM, either have a plan to pay it off in that time frame or refinance now to a fixed. Even though the thought of having a house paid off makes us a little giddy; it does take alot of patience, focus and a great automatic payment system on the 2nd of the month to get there.

Back in business: My long term goal has changed from retiring and playing golf to owning a business. Whether that be a franchise, buying an existing business or doing a start up I'm considering all my options. We are searching deep within our interests and passions to find what we can bring to the table. Again just a baby stage thought.


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