Wednesday, 16 December 2015

Loan Clarification

I didn’t blog yesterday as it was a busy morning; sorry about that. I did have a talk with my local banker last evening about a few things. Not only did we talk about RRSP options, as it is that time of year, but also about the Trea and Wanda loans. 

To put it simply, I can’t or shouldn’t rather, merge the two loans into one. The reason is that the rate I would get would be worse than what I have now. This is due to the fact that at time of refinancing, the truck and trailer would not be “new” and therefore classified as “used” and as such, the rate is higher. (Even though I am not buying them again).

I did learn that Wanda’s loan does not have a large balloon payment at the end but simply it is structured like a mortgage. That means that I could take the next twenty years paying the Wanda loan off. 

While this is a relief, I am not about to spend the next twenty years paying Wanda off. I will continue with my plans to save up my contingency fund and crank up the payments on Wanda to $400.00 bi-weekly in April.  

This will mean that Trea and Wanda will both be paid off in 3 years’ time. I will not touch Trea’s loan, and just keep paying on it as I have been. It is possible to convert it to Bi-weekly payments as well, and that is something to consider, as this would even out my financial demands and savings between the two paycheques.

I will also continue to save in both an RRSP and non-RRSP style with a mix of different saving/investment vehicles.  This is something new to me, as savings and having extra money is not something that I am used to; so this is fun for me.

I could continue my massive saving ways now and build up a nest-egg quicker, but I want to balance paying off my debts altogether with saving for my future. Three years is a good enough time frame to be debt free. 

In the summer I can start to look for a patch of ground to park Wanda on. Who knows, something might come up, something that I can afford. For now, I will relax knowing that the pressure to refinance is off and that things are really and truly looking up.

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