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Subject:  Re: Plans for the New Year Date:  12/19/2000  7:50 PM
Author:  SpeleoFool Number:  51938 of 312185

Where to start? Next year promises to be exciting. Here's just some of what we plan to do:

* revise and update my Excel budget for 2001

* open discount brokerage account(s) for my wife and me; fully fund year 2000 Roth IRAs before Tax Day

* pay off my $11k Citibank balance before the 2.9% rate expires in June

* increase our cash reserves; set up a smarter savings vehicle (MMA? CD ladders? Online banking?)

* get rid of escrow; start a "personal escrow" account

* continue to make maximum contributions to our 401ks and my Stock Purchase Plan

* open discount brokerage account(s) for after-tax investments

* develop a regular exercise routine

* spend more time outdoors

...And then things get a little more hazy. Because one other thing I'd really like to do is:

* get rid of PMI

The reason things are hazy is that I'm not sure how close we are to reaching 20% equity. As of today, we owe $155,361.01 on our mortgage. If our house is appraised at $194,201.25 or more, we're there. We received an advertisement from a local real estate agent that shows a house in our neighborhood with the same floorplan as ours and comparable features listed at $199,000. So, I think we're pretty close, if not already there.

Here's the kicker: in order to drop PMI, I need to spend $350 to have an appraisal done by someone approved/assigned by my mortgage company. If that appraisal comes up short for any reason, I'm SOL. Even if I send in a check for the difference that same day, they'll require a second appraisal (at another $350--ugh). I'd be grateful for any thoughts or advice from Fools who have been through this mess before or are familiar with how PMI works.

Possibility #1
Anyway, if all goes well with an appraisal, we can drop PMI, and:

* pay off second Citibank card (3.9% for life) around August, give or take; celebrate DEBT FREEDOM, except for mortgage

Possibility #2
If we fall short of 20% equity, one thought I had was:

* transfer part of my mortgage to credit cards

Crazy, huh? Then again, PMI is basically wasted money anyway. I probably won't need a very good rate to lose less than $100/mo. to interest, depending on how much I need to transfer. Our "3.9%-for-life" card just increased our credit limit by $3k, and my Citibank Visa has offered me 6.9% for a year or 7.9% for life. My mortgage company told me they'd drop PMI (without an appraisal) when my balance reaches $136,000.

I don't really want to carry around another $20k on cards, and I don't want to waste $700 on two appraisals. Thoughts? Suggestions? Foolishness?

Thanks all,
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