I called our mortgage company and found out that we are qualified for a rate modification from 4.0% to a very low 3.5%! The total cost is 1 point or $1,247, and it will save us $123.19 each and every month. That means it will take us about 10 months to recoup the cost of modification. For the life of the loan, it will saves us tens of thousands of dollar. Definitely, a good move!
Our plan to pay off the mortgage within five years by the end of 2015 remains intact. With a 3.5% mortgage rate, it should help us achieve our goal even easier. We have to stick with our goal of overpay $1,500 on average into our mortgage each month until the end of 2015. Indeed, it’s an aggressive goal.
By the way, I sold the company stock that I bought at a discount (ESPP) in order to diversify the position away from a single stock. It’s not that I don’t like the company stock, but holding just a single stock is an unnecessary risk that the market doesn’t reward if it can be diversified away. I rather sell it and buy a total market fund that also includes my company’s stock along with many other stocks in the whole market. In doing so, the net profit from selling is $1,852.33, after $35.33 transaction cost. That’s a quick profit every 6 months. I will repeat and harvest the same profit in July 1st, 2011.
Lastly, I add $2000 to Roth IRA at the beginning of the year. I will max out the 2011 contribution with an additional $3000 later in the year.