Finances Future Plans

Mortgage, Taxes and Insurance–oh my!

I was going to start this post by saying that part of finding peace for me is knowing where my money is going.  I typically get frustrated, though, when learning that my money is going somewhere:

  • I don’t want it to go or if
  • I don’t have a choice on where it goes or if
  • I have no idea why it goes where it does.

Hence, I ask myself, if I look into these issues, is it going to increase or decrease my peace?
These questions are coming up because I just received my Annual Escro Account Disclosure Statement from the bank where I have a mortgage.
I’ve learned that my home owners taxes are going up $262.31 this year, and my homeowner/flood insurance is going up $60.88 this year.
My payments will be $3147.72 for taxes and $730.56 for insurance.  I am not sure if those costs are high or low or kind of in the middle.  I do know that taxes near my parents’ house are much higher. They live in a suburban area, so that, to me, is to be expected. Typically people make more money in the suburbs to offset the cost of living expenses.  The other question I could ask is are these high based on my salary? Food for thought for another day.
I also played with some other numbers while looking at the statement.  On 10/15/15, my principal balance was $83,408.34, and on 9/13/16, my principal balance is $77,630.04, so this year I paid $5778.30 in principal.  That’s probably not bad.  Given that I sent in over $1000 a month, though, it’s hard to swallow that at least half of each payment went to interest and my local government (home owners tax).
If I look at what my government does for me, such as educate my children, pay part of my salary, keep roads repaired, and likely 1000 other things, I can be more accepting. Am I happy that I pay $3k a year to them?  Well, that actually seems reasonable to me.
It’s that darn interest that I struggle with. In my mind, I am giving money away without getting much back.  Now, if I consider that I wouldn’t have a house without being able to get the loan , then I’m grateful.   Besides that, though, having to pay between $245.01 (beginning of the year) and $231.26 (by the end of the year) per month on interest this past year kind of sucks–especially when I could use that money to pay off the $77,630.04 balance I have on the house.
Am I justified in being angry about the amount of interest I have to pay?  I’m guessing most people reading this blog would say yes. However, I know very little about banking and how the economy works, and maybe the interest money does go to good use.
I still have questions though:
Could the bank be ok without my interest? Or with less interest? What if the bank couldn’t charge more interest at the beginning of my loan and had to just keep the amount of interest I was to pay steady?  If interest rates were lower would housing prices go up?  What if banks weren’t allowed to take more than a certain percentage interest of your payment?  Are there already rules like this? Would I be happier if I could pay my mortgage off earlier or is that an illusion?
Perhaps even more important is to ask myself the question: does looking into these issues give or take away my peace?
I do feel a little better after having figured out where the money goes and sharing my thoughts with you.  I also am pulled to learn more since I have so many questions–growth is good.  I’d say that looking into these issues both brings and takes peace.  I think it brings more than it takes though.
What do you think about mortgage interest rates?  What do you think about knowledge–does it bring or take peace or both? 
Peace Out (and In)!




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