Mortgage Reduction Invitation

October 7, 2019

Members and Friends of Good Sam,                                                                     

There are so many great things happening at Good Sam these days:  Bible Studies, care and connection with our community, food pantry and meal care, time for prayer in our building, family time with Eat and Play, Empty Nester programs like Oktoberfest, community groups who use our building and love that we are here for them like Pax River Quilters Guild, and much more.  In this message we would like to share with you one challenge to our community life that some of you know about, but likely you have not really thought about. It’s our mortgage.

Here are some quick facts:

  • We spend $8,887 each month to service our mortgage. This year that will cost us $106,647.  
  • Last year income to the General Fund was $313,000.  The mortgage was 34% of that total.
  • Currently, church based and business recommendations are that congregations not go in debt more than 15-20% of their General Fund income.  We are at twice that rate. 
  • While this situation has been true for the last 12+ years of this congregation’s 20+ year history, it has become increasingly burdensome to do effective ministry with this kind of debt load.

All that being said, we want to make you aware of a plan to help reduce this challenge and we invite you to help in any way you can.  Our current mortgage interest rate (%4.625) resets every three years to match current economic trends. Our mortgage will reset again this January.  Usually, making additional principal payments does not have an immediate impact on our current monthly required payment. But because our loan rate resets this January, any principal payments we make between now and Novembers 15th will directly impact not only the principal (amount we owe), but also directly impact the monthly mortgage payment we will have beginning in January for the next three years.

Also, we have recently received a gift that allows us to make a $50,000 payment to our mortgage principal.  This will reduce our annual mortgage payment total next year by almost $6,000. We are so thankful for this gift and are pleased to use it to begin to address this particular challenge to ministry at Good Sam.  

You too can help.  Between now and November 15th any additional gifts we receive toward this mortgage principal payment will reduce our principal amount and directly reduce our mortgage costs for the next three-year cycle of our mortgage.  

We understand we have differing abilities to help financially with this opportunity, but please consider that any amount does help and has a growing impact over the life of this loan.  We believe there are those in our community who have the ability and will consider helping us remain financially viable in the coming years. This means we can save $60,000 or more in Loan Servicing Costs through the life of our mortgage.  (See the spreadsheet below.) 

Council has established a “Mortgage Principal Fund” for this purpose.  Simply label any gift to Good Sam with the memo line “Mortgage Principal.” And we will include it in the November principal payment we are planning.  Thank you for your consideration in making a gift to this effort.

Pastor Mitch and your Good Sam Council

Here is a table that may help you see the possibilities.  If we can raise an additional $50,000 we can save more than $11,000 a year for the life of the loan.

Scenario Loan Amount Interest Rate Payments (Months) Monthly Payment Amount Monthly Savings Annual Savings
Baseline 932027 4.625% 135 8888.15 0 0
50K 882027 4.625% 135 8411.33 476.82 5722
51K 881027 4.625% 135 8401.80 486.35 5836
55K 877027 4.625% 135 8363.65 524.50 6294
75K 857027 4.625% 135 8172.92 715.23 8583
100K 832027 4.625% 135 7934.51 953.64 11444