Author Topic: Paid off our Mortgage and did so a year earlier than planned!  (Read 2587 times)

mld

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Paid off our Mortgage and did so a year earlier than planned!
« on: February 21, 2017, 01:20:11 PM »
Just wanted to share this somewhere since we are not telling friends/family at least for now that we did this.

We paid off the house we bought in 2013!! We did it all the while doing a ton of renovations to update/repair various aspects to make it livable and comfortable for our young family.

When we looked at our numbers in January, despite that we had a good idea we were heading towards this goal faster than planned, we still had trouble believing we had enough to pay it down. We took extra time to review all of our finances again and update our multiple spreadsheets (lol), then we went over all of our plans in terms of continuing to build our stash before going ahead. Then we called the bank which processed it the next day.... and it felt amazing!!

Thanks everyone! I rarely post but do love to read all the great info shared on here.

nouveauRiche

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Re: Paid off our Mortgage and did so a year earlier than planned!
« Reply #1 on: February 21, 2017, 02:17:07 PM »
Rock on!

meandmyfamily

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Re: Paid off our Mortgage and did so a year earlier than planned!
« Reply #2 on: February 22, 2017, 10:23:30 PM »
Awesome job!

Lmoot

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Re: Paid off our Mortgage and did so a year earlier than planned!
« Reply #3 on: February 23, 2017, 04:29:50 AM »
Congratulations! Did you find that the sweat equity helped? I am assuming since you bought a fixer-upper that the mortgage was small, which allowed you the cashflow to direct cash towards customizing/fixing it, and to pay it off earlier. Since having to do a whole house reno all by myself (well, contracting it....though I did a lot of work myself, including laying tile), I have learned from mistakes and will never get anything other than a fixer-upper. Or possibly designing and building my own house.

Every time I spend a lot of money on my house (just spent $8300 on a whole house rewire), friends and family say "you shouldn't have bought that house". That's the part when I remind them my house cost $79k ($71 if you include the $8k FTHB tax credit) in 2009, is currently valued $110+,  will be paid off in 2 years, and that my mortgage is $353.91. That usually shuts em up. Also I have been renting it out for several years, and the rent is double the mortgage
« Last Edit: February 23, 2017, 04:33:47 AM by Lmoot »

mld

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Re: Paid off our Mortgage and did so a year earlier than planned!
« Reply #4 on: February 23, 2017, 10:29:10 AM »
Congratulations! Did you find that the sweat equity helped? I am assuming since you bought a fixer-upper that the mortgage was small, which allowed you the cashflow to direct cash towards customizing/fixing it, and to pay it off earlier. Since having to do a whole house reno all by myself (well, contracting it....though I did a lot of work myself, including laying tile), I have learned from mistakes and will never get anything other than a fixer-upper. Or possibly designing and building my own house.

Thanks! It did help also in the sense that we were able to get a cheaper house for where we wanted to live which is a HCOL location and like you mentioned, having bought something around the average prices here (around 280 000) for something similar needing less work, would have tied up lots of potential cash flow. The house was 220,000 and is now worth around 260 000 so pretty good return on the approx 25 000 we put into it (although since we plan to stay here after we reach FI we are not counting this towards our stash). Also pretty darn satisfying to live in a place where you have all the memories of say tearing a wall out, laying down the tiles and just having made it your own.

The mortgage was still around 178,000 so the rest is part that we had a high savings rate (60%) and our investments grew well, we threw all the extra at the mortgage after maxing our tfsas, eventually saw an opportunity to move some of the investments to the remaining mortgage and went ahead. We had the whole invest or pay off the mortgage debate between the 2 of us along the way and eventually chose a combination of the two which felt like the right thing for us emotionally and financially.



soccerluvof4

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Re: Paid off our Mortgage and did so a year earlier than planned!
« Reply #5 on: February 23, 2017, 10:58:47 AM »
Congrats!
" In life you don't get what you deserve you get what you negotiate"

Socmonkey

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Re: Paid off our Mortgage and did so a year earlier than planned!
« Reply #6 on: February 23, 2017, 10:43:05 PM »
This is great stuff! I love when someone pays off their house - you will now cashflow like crazy!
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Heckler

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Re: Paid off our Mortgage and did so a year earlier than planned!
« Reply #7 on: February 24, 2017, 12:27:06 AM »
Rock on!   I'm curious why not share the great news with family.  My parents are pretty proud of us and I bought lunch for the guys at work.  Maybe they resent me now, but meh.....

FrozenBits

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Re: Paid off our Mortgage and did so a year earlier than planned!
« Reply #8 on: February 24, 2017, 12:32:23 AM »
Congratulations! That's an awesome accomplishment :)

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mies

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Re: Paid off our Mortgage and did so a year earlier than planned!
« Reply #9 on: February 24, 2017, 03:28:37 AM »
Rock on!   I'm curious why not share the great news with family.  My parents are pretty proud of us and I bought lunch for the guys at work.  Maybe they resent me now, but meh.....

I would guess maybe they have immature or financially irresponsible relatives that would be mean spirited or try to hit them up for money after they learned about their mortgage being gone. That is why we didn't tell my family and most friends when we paid off our mortgage.
Less is more.

mld

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Re: Paid off our Mortgage and did so a year earlier than planned!
« Reply #10 on: February 24, 2017, 09:16:48 AM »
Rock on!   I'm curious why not share the great news with family.  My parents are pretty proud of us and I bought lunch for the guys at work.  Maybe they resent me now, but meh.....

I would guess maybe they have immature or financially irresponsible relatives that would be mean spirited or try to hit them up for money after they learned about their mortgage being gone. That is why we didn't tell my family and most friends when we paid off our mortgage.

Good question. I wouldn't exactly say that some of our family/friends would directly try to hit us up on money, except maybe a family member dealing with gambling addiction but even for that person, I'm not sure if they would try to get money from us. It's more in a sort of mentality difference. Like my parents would be really proud but then that would be mixed in to how they see us as 'being cheap'. They're of the mentality that you should live comfortably and well, how they define that also differs greatly from us, for example they constantly comment on how our car is so small and not safe for a family (2005 toyota matrix) and that we can and should afford a nice recent suv to be safe. They also comment on how our house is small (1150 square feet + finished basement so 2300 sqf of living space is plenty for our small family) and stuff like that, so we are just worried that this could become another go to issue for them when they feel we are not 'living comfortably'.

The in-laws laughed in our face when we talked about paying off our mortgage soon, and just sort of don't seem interested when we speak about anything in terms of our plans for financial independence, so not sure what their reactions would be but we just stopped bringing the subject up when we hand out with them.

Otherwise, not all our friends are frugal and or have good jobs/situations, so for them we prefer not to discuss all our financial plans. We do have a friend who is aiming for FI and we did mention it, loved how he reacted, it wasn't a OMG you guys are rich and should now live luxuriously kind of reaction lol, just like oh cool and what is your next plan for investing thing and discussing the timing of the decision and just the fun itty gritty stuff of what we plan to do with the new cash flow.

Eventually we might change our mind and tell but for now, we'll keep it hush hush and celebrate just the two of us.

mld

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Re: Paid off our Mortgage and did so a year earlier than planned!
« Reply #11 on: March 13, 2017, 10:53:55 AM »
So just a little update that we ended up announcing to some close family members and a friend. We decided we wanted to tell, at least our parents after some reflections, and on my part, after reading MMM's recent post on the passing of his father and realizing how close MIL is in age with him.. didn't want to regret not having told them since chances are it might make them proud, even if that is mixed with other emotions more on the negative side like judgement or jealousy.

For those interested these were the reactions:
MIL first said we were full of... well you know what (which is kind of funny because she is this proper little nice grandma type of lady lol) but yeah that was her genuine first reaction :P. Then she said ''Well what are you going to do with all your money!?'', we've explained our FI plans a few times to her and clearly does not compute with her mentality so we kind of just generally said, invest, get out of the rat race and be our own bosses to have more time with the kiddoes and of course more time with our parents as they get older and need a bit more help. She liked that and did seem proud.

Second person was a good friend of ours, his first reaction was ''Is this a joke?'' then he got teary eyed and said how happy he was for us and asked ''how did you do it? I want to do that, this is awesome!''. So yeah, awesome reaction which brought on talks of achieving FI, the 4% rule etc. We had spoken to him in the past of those various subjects but now he really seemed to be interested and realize that we were actually implementing these things and that it is possible to stash a good percentage of your income in order to eventually reach FI. He even sent follow up questions in the next week about investing and our thoughts on various strategies. Pretty cool to see we might be influencing a friend to reach for FI.

And third, the one I was most dreading was telling my parents but it actually went great. They both got teary eyed. We had bought sparkling wine to announce and it made for a nice celebration. My mom spoke to us in more details on investing, talked about how we were ahead of the game for our age and even popped out various formulas similar to the 4% rule that she was using to plan her own retirement although with lower % of withdrawal and higher spending but still similar stuff.

All in all, I'm glad we told them. Sure the whole expenses stuff might pop up with my parents in the future since they don't quite have the same mentality as us with regards to that but it was nice to celebrate with them and watch them be proud. Also opened up the discussion about our future plans which makes me even more motivated to achieve them.

Lmoot

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Re: Paid off our Mortgage and did so a year earlier than planned!
« Reply #12 on: March 13, 2017, 11:11:09 AM »
 I am so happy it worked out for you. I know it must be scary to share such big news and not know how those closest to you will take it. I am still on the fence on who I will tell when I pay my mortgage off in two years. My parents definitely, and my grandmother.  I don't know if I want to tell my siblings, mainly because I don't want to cause jealousy. And they want to go in on investing in condos and I don't want them to think that I have all this extra money lying around. My mortgage is only $350 a month so it's not not gonna change my life LOL.

In a way it is kind of sad that the reaction of people when they find out someone has paid off their mortgage, is so emotional. It is sad because so many people have the means to pay the mortgage off in less than 30 years, but we choose as a society to spend it on other things. And by things, I don't mean investing, so I am not trying to say paying off the mortgage is always the right thing to do.  Paying off the mortgage for me is purely a financial decision. I want to feel confident in moving forward with investing another properties, and I don't want to keep my primary property under an umbrella of risk. I would rather keep risk on an investment property than my own house.  I only owe about 40,000 because I previously prepaid it, so I am almost there. I could scrounge together enough to pay it off by the end of this year, but my more pressing goal is to purchase at least 1 investment property first.

mld

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Re: Paid off our Mortgage and did so a year earlier than planned!
« Reply #13 on: March 16, 2017, 10:11:15 AM »
In a way it is kind of sad that the reaction of people when they find out someone has paid off their mortgage, is so emotional. It is sad because so many people have the means to pay the mortgage off in less than 30 years, but we choose as a society to spend it on other things. And by things, I don't mean investing, so I am not trying to say paying off the mortgage is always the right thing to do. 

I agree! Same goes for how some people view investing like some kind of unattainable goal while simple easy changes to their spending could allow them to save on a regular basis.

Brother Esau

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Re: Paid off our Mortgage and did so a year earlier than planned!
« Reply #14 on: March 18, 2017, 10:48:59 AM »
Congrats mld! We recently began attacking our mortgage. It's weird, but we won't discuss this stuff with family & friends either. They don't seem to understand.

Slee_stack

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Re: Paid off our Mortgage and did so a year earlier than planned!
« Reply #15 on: March 20, 2017, 12:56:21 PM »
Glad the reactions were positive OP!

I'm one of those who are anti mortgage pay off, but one thing I hadn't thought about was the celebration you could have (as you mentioned with the sparkling wine bit).  I think that type of thing is more acceptable to share than say....toasting XXX Net Worth with your family / friends...  I'm afraid the latter might not go over nearly as well.

Good on you for also imparting some well-received financial advice to your friend.