Jessica --
Jon has given some excellent advice on the scratch-and-dent appliances. I think there's a place in Birmingham that does that. Even if you have to rent a truck and go to Atlanta to pick it all up at the place he suggests, he's right...it'll save you a ton of money.
Go to Consumer Reports for ratings on quality & durability. Again, given the money you're going to be spending, it's well worth the $35 or so cost if you're not already a member.
You didn't ask this, but I'm going to offer some financial advice: Pay off your mortgage as soon as you can.
I speak from experience. Mrs. Basket Case and I financed our first house in 1990 at 9.25%, on a 30-year note. Believe it or not, that was a pretty good rate at the time. Two years later, rates had declined significantly, and we refinanced at 6.125% -- and this is important -- this time, on a 15 year note. The way the math works is really interesting here. Because of the decline in rates, our monthly payment actually went down by $13 even though we cut the amortization in half.
So that was 1992. We promised ourselves that, 15 years from then, we'd have our house paid for. We might trade up or move for whatever reason, but by 2007, we'd be mortgage free. And we did that. Moved a couple of times, and each time traded up. We moved in 1994, and paid that mortgage on a 13-year schedule. We moved again in 1996, and paid that one on an 11-year schedule. Always set to have $0 debt on the house by 2007.
I cannot express how liberating that is. You may or may not have GTH money, but having a GTH debt position is the next best thing. It was a huge mental buoy when we both went through some extreme dissatisfaction with jobs. Worst case, we could tell The Man where to stuff it, walk out, and not worry about cracking that nut on the first of the next month. Even though we both worked through the issues, just knowing the escape hatch was there was incredibly calming.
DO NOT FALL FOR THE LINE MORTGAGE LENDERS ARE PUTTING OUT.
They will tell you, "Borrow at 4% (or whatever the current rate is), keep it on the longest schedule you can, keep your payment as low as possible, invest the rest of your disposable income and earn 8-9% over the long haul. At the end of 15 years, you'll have enough in your investments to pay off the mortgage. Why would you not use 4% money to earn 8-9%?"
Here's why not:
A. There's a huge conflict of interest there in that they make their money keeping you in debt. They also make more money when the terms are longer, if for no other reason than the balance is higher. As much as they want you to think they're your friend, they're not. The cold hard truth is that buyers have no friends in the house-buying process. Everybody's smiling and patting you on the back....all the while with their fingers in your wallet. You're the cash cow, and they're all feeding off of you. No matter how much they love on you, never forget that.
B. The math they're referencing can be accurate, but only if a bunch of things happen:
1. You have to invest the difference between the 30 year payment and, say, a 15 year payment, every single month. No exceptions. Not ever. No, "I really need this vacation." No, "It's just this once." No, "My car crapped out, and I'll get back on track next year." No, "It's Christmas and I have to buy presents." Very few people have the discipline to do that for 15 straight years.
2. The stock market needs to be normal in the 2-3 years leading up to the payoff date. Trouble is, it goes up and down. Definite sawtooth up, and that's what makes it the best vehicle for building wealth. But if you happen to have a 20% - 30% correction (which isn't at all unusual) going on when you expected to be paying off your mortgage, the value might not be there.
3. Meanwhile, you're still shelling out the 30-year payment. In other words, it's still a lot of cash out and you have that nut to crack for an additional 15 years. Accounting intricacies notwithstanding, freeing up the cash that used to go to mortgage opens up tons of new investment opportunities.
So here's what I'd suggest:
-- Have your mortgage note at 25 - 30 years. But you can pay more than the required payment, and they're bound by law to apply the extra to principal.
-- Figure the 15-year payment, and pay that. I know it looks like a more than you were anticipating, but I promise that after a few months, it just gets baked into your lifestyle. Plus, that extra is what they're telling you to invest anyway -- If you don't invest it somewhere, all that stuff they're telling you doesn't work at all.
-- An added benefit is that, if you do have a true no-foolin' emergency -- medical issue, loss of job, loss of income -- you have a fallback position that's a little less expensive than what you're used to.
Example:
$150,000 mortgage, 4% APR, 30 year term, has monthly debt service (not counting PMI, tax & insurance escrows....just debt service) of $716.12. If you cut it to 15 years, it's $1,109.53 -- about $400 difference.
Here's the magic: If you make 360 easy monthly payments of $716.12, you'll shell out just shy of $258K over the life of the mortgage. But if you make 180 payments of $1,109.53, you pay a total of just under $200K -- saving about $58K in cash flow. Mortgage lender didn't mention that, did he?
Adjust those numbers for your personal situation, but the concept holds no matter your actual numbers.
Suze Orman has a great line, "Debt is bondage." She's right. And when you're no longer in bondage, you'll be amazed at how good it feels, how much you just don't worry about, and how many options (both personal and financial) are open to you.
