There's a plumbing problem at our rental house. First estimate is $1,450. I've called two other plumbers for estimates. Hopefully tomorrow or Monday, we can get better news.

The line that goes from the upstairs toilet to the basement has a leak. I'm no plumber, and I'm 136 miles away.

Maybe some of you read my question in the forums yesterday. I'm starting an EF. We've gone almost three years without using credit cards. And, we've managed to operate without an EF. But, it's time to change that. So...We'll establish a $1,000 EF, and begin beefing it up when the cards are paid off.

We actually have some money saved up right now - $4,200. That's new roof savings. We figure the new roof at $7,500. Plus, we need to have $800 in reserve to pay back the security deposit to our renters if/when they move out. So, the savings goal will need to be $9,300 before we can buy the new roof - "just" $5,100 to go!

Last October, my credit score was a fiasco. It was 580. I asked on the forums how long it would take to raise my score up to a respectable level. No one could really answer the question.

Well, I applied for a new credit card for a balance transfer. Apparently part of the new credit card reform law is that credit companies need to provide you with your credit score. Mine is now 667.

So, over the course of 9 months of faithfully paying bills on time, and whittling down debt, my credit score has improved by 87 points. That's close to 10 points per month. Maybe by the end of the year, I'll be looking at a 700 credit score.

I've posted the same question in the forums, but I thought I'd also post the same question here:

I've posted in the forums previously about a house that we own that we no longer live in. My family moved 3 1/2 years ago, and the house has been on the market and unsold ever since. We owe about $105,000, and my best guess is (with input from our Realtor) that it's worth somewhere between $95,000 and $105,000 at this time. The house is located in a small villge in the northern part of Michigan. The list price on the house is $109,900, which when Realtor commissions and closing costs are added in, puts us about $4,500 in the hole.

One week ago, we had new renters move in. They are interested in buying the house, but are not in a financial position to do so right now. We struck a deal with them to remove the house from the market for 12 months. They are paying $100 per month above what we asked for rent in exchange for us removing the house from the market (we had been asking for $800 in rent, and they are paying $900 per month.) Also, when the 12 months is up, the (presumed) $1,200 they've paid in addition to the rent will be put toward a down payment.

So ... on to my question. Would it be a good idea for us to refinance our loan while we wait? We are paying $6.25% interest. The original amount borrowed was $120,000, and we are paying $738/mo. Int + Prin.

There is of course no guarantee that our renters will buy the house in July 2012, but I'd like to use 12 months as my planning horizon.

Over the next 12 months, I will pay $6,500 in interest on the loan as it currently is.

If I were able to refinance for 5.25% (one point lower than current), I would save $158/mo. in mortgage payments and $1,000 in total interest payments, assuming a 30 year refi.

Or we could refi at a 20 year payoff, keep our payments approximately the same, and bite off more principal each month.

What are mortgage rates these days? What can I expect for closing costs? Clearly, I don't have 20% Loan to Value.

Any thoughts would be appreciated.

Thanks

I took all of our household coins to the bank today. We had $24.12. I do this about four times a year, and it seems like there's always between $20 and $25 worth of change.

I applied and was approved for a new credit card yesterday. Yikes! I haven't had one of those in three years. I'll not use it for any purchases, only a balance transfer of CC#2 - the 16.99% APR monstrosity.

Some stats: My credit limit will be $5,000. So, less than half of the limit will be taken up by the transfer. The balance transfer charge is 4% of the amount transferred. The six month introductory APR is 0.0%. Then, it increases to a rate between 9.99% and 20.99%. Ouch and ouch. I don't know yet what the APR will move to, but will find out when I receive the card and details in the mail.

Some calculations: Best case scenario is to have the entire balance paid off by next March - With a 9.99% APR. If I (we) can do that, I project that we can save $127 over what we would have paid in interest by keeping the balance where it is. If the interest rate spikes up to 20.99%, and I don't have the balance paid off until next April, we'll save $43 over keeping it where it is.

If the balance is not paid off until May 2012, at a 20.99% rate, I will go backwards $24. If the rate goes to 9.99%, I have until July 2012 before I go backwards.

It may seem like an awful lot of hassle just to save $127 over the course of 8 months. It probably is. But, I feel as if I've waged an all out war against credit card debt, and every small victory is a step closer towards my ultimate goal of being credit card debt free.

I will shred the card as soon as it arrives in the mail.

We made the 136 mile trip to our old house this weekend. Our new renters moved in. We met them, signed two copies of the lease, and collected their rent plus security deposit. Fortunately, their check cleared. They also seemed like genuinely nice people.

We weren't aware of it, but there were community-wide garage/yard sales going on. We had some items that we had left in the house. Things like my wife's antique sewing machine collection, a changing table, an antique buffet, and an antique rocking chair. These are all items that we 1- don't have room for now and 2- have gotten by without for 3 1/2 years. So ... we put them all out in the front lawn, put prices on them and sold everything but the rocking chair. We paid for the gas for the entire trip, plus a bit more.

We certainly didn't sell the items for nearly what we could have, but they are now sitting in someone else's house collecting dust. My wife didn't want to get rid of the rocking chair unless it sold for at least $75. So, we brought it back home with us, and she'll give it to her brother.

As I mentioned in my previous blog, we have renters moving in this weekend. That will help the cash flow quite a bit. I also mentioend way back in April on this blog that we need a new roof.

A couple of things have happened since then. First, the estimate for the roof was about $1,500 more than we expected, and our other renters moved out. The money we had saved for the roof had to cover the shortfall created by the lack of rent plus the return of the security deposit.

If we start saving our rental income, I figure that we might have enough money saved up by October for the roof.

After we have the money saved up, I'd also like to establish a $1,000 EF, plus we have to keep $800 in reserve for the renters if and when they need their security deposit back.

On the bright side, we have been cash flowing each month since last October.

Long story short - we have a house that we no longer live in that has been for sale for nearly four years. We're probably $5-10,000 under water. It's listed as Mort. 1 under my info on the side bar.

We had renters in that house from last October until about a month ago. Our new renters are moving in this Saturday. The rent covers about 3/4ths of our PITI.

I don't like being a land lord - always wondering if the payment will come, if the check will clear, etc. I just want to sell the house and be done with it all. Our new renters are interested in buying, but are apparently not in a financial position to do so at the time.

So, we're doing the back ground check, and signing the lease agreement, and crossing our fingers that at a minimum, they pay every month and maybe just maybe were aquainting ourselves with the future owners of our house.

The interest rate that we pay on CC 1 dropped last month. It was 12.9% APR prior, and it dropped to 8.9% APR. That's about $30 less in accumulated interest per month. We didn't even have to call to ask for the rate change. I guess it has to do with the fact that we've faithfully paid that card, and all of our other obligations each month since October, and our credit scores are improving as a result.

An 8.9% APR is still highway robbery, but it sure beats 12.9%!

It's been a while since I've posted an entry. I'll give an update on our total debts.

Mort. 1 - $104,941 $738/mo. 6.25%
Mort. 2 - $70,000 0/mo. 0.00%
CC 1 - $8,666 $176/mo. 8.90%
CC 2 - $2,278 $57/mo. 16.99%
CC 3 - $3,309 $140/mo. 5.25%
CC 4 - Paid in Full
CC 5 - $2,822 $195/mo. 5.32%
Van Loan - $7,296 $210/mo. 4.02%

I feel as though we're making good progress on credit card #2 with the exorbitant 16.99% APR. My goal will be to have it completely paid off over the next 12 months, while making minimum payments on everything else.

Keep in mind that the $XX/mo. figure above is the minimum amount due for each account. So, CC 2 is $57/mo. minimum due, but in May, we paid $134, in June, $143 and this month $230.