Author Topic: Mortgage Payoff Club!!  (Read 429403 times)

flowrider

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Re: Mortgage Payoff Club!!
« Reply #1150 on: February 15, 2017, 06:28:51 PM »
I've never understood the whole appeal of deducting mortgage interest
Well I'm not borrowing money just so I can pay lower taxes - I want a house as well!  The relevant point is that about 1/4 of the amount I pay in interest comes back to me, so I am only paying 3/4 of the interest when all is said and done. 

What I don't understand is why people are celebrating the 2-4% rate of returns people are getting by prepaying their mortgages.
Here in NZ interest rates are creeping up with most terms now over 5% and there are no tax benefits for non investment properties here. For me having the mortgage paid off will be a weight off the shoulders. I am under $10k to go now.

AcctgGuy

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Re: Mortgage Payoff Club!!
« Reply #1151 on: February 17, 2017, 02:15:03 PM »
I am joining this crew. Ultimately, I want my wife to stay home with our future kids. A big step to accomplishing that will be killing this mortgage. I'm also looking forward to NEVER having a mortgage/rent payment outside of tax/insurance ever again once we tackle this!

Beginning Balance March 2016: $243,600 (20% Equity)

February 2017: $213,900 (30% Equity)

I'm happy with our progress so far but a long way to go. On to getting this thing under $200k.

pdxmonkey

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Re: Mortgage Payoff Club!!
« Reply #1152 on: February 18, 2017, 09:35:38 AM »
I've never understood the whole appeal of deducting mortgage interest
Well I'm not borrowing money just so I can pay lower taxes - I want a house as well!  The relevant point is that about 1/4 of the amount I pay in interest comes back to me, so I am only paying 3/4 of the interest when all is said and done. 

What I don't understand is why people are celebrating the 2-4% rate of returns people are getting by prepaying their mortgages.
Diversification. Paying the mortgage early is similar to buying a bond in many ways. I have zero bonds in my portfolio.
« Last Edit: March 06, 2017, 10:48:52 PM by pdxmonkey »

talltexan

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Re: Mortgage Payoff Club!!
« Reply #1153 on: February 21, 2017, 08:38:10 AM »
Kinda shocked to see the pay off home versus invest debate in this thread. Indeed it is an interesting debate (i am personally on the slow-pay-off side), but I'd like to see this thread be a safe space for people who take the commendable step of living in a paid-for house.

The consumer-world celebrates people for buying things, even when some of those things may detract from over-all wealth. Why shouldn't we celebrate this triumph of anti-consumerism?

jordanread

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Re: Mortgage Payoff Club!!
« Reply #1154 on: February 21, 2017, 08:42:01 AM »
Kinda shocked to see the pay off home versus invest debate in this thread. Indeed it is an interesting debate (i am personally on the slow-pay-off side), but I'd like to see this thread be a safe space for people who take the commendable step of living in a paid-for house.

The consumer-world celebrates people for buying things, even when some of those things may detract from over-all wealth. Why shouldn't we celebrate this triumph of anti-consumerism?

Don't be that shocked. It's 24 pages long, and I'd say that there is less than 2 pages of that. Otherwise, it's more like a celebration thread for those who go this route. Use it as such, and you'll be fine.

wauske

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Re: Mortgage Payoff Club!!
« Reply #1155 on: February 21, 2017, 01:31:51 PM »
Kinda shocked to see the pay off home versus invest debate in this thread. Indeed it is an interesting debate (i am personally on the slow-pay-off side), but I'd like to see this thread be a safe space for people who take the commendable step of living in a paid-for house.

The consumer-world celebrates people for buying things, even when some of those things may detract from over-all wealth. Why shouldn't we celebrate this triumph of anti-consumerism?

Don't be that shocked. It's 24 pages long, and I'd say that there is less than 2 pages of that. Otherwise, it's more like a celebration thread for those who go this route. Use it as such, and you'll be fine.

A big part of the choice is also what you feel comfortable with. Some people calculate risks and choose investment over paying off because it is the most profitable way within their scope of calculation. Personally, I chose that guaranteed with no risks result of wiping out the mortgage and will start investing after clearing it (only 19k to go!).
Everything I say is my personal opinion which is based on my subjective experience.

couponvan

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Re: Mortgage Payoff Club!!
« Reply #1156 on: February 21, 2017, 01:58:35 PM »
Kinda shocked to see the pay off home versus invest debate in this thread. Indeed it is an interesting debate (i am personally on the slow-pay-off side), but I'd like to see this thread be a safe space for people who take the commendable step of living in a paid-for house.

The consumer-world celebrates people for buying things, even when some of those things may detract from over-all wealth. Why shouldn't we celebrate this triumph of anti-consumerism?

Don't be that shocked. It's 24 pages long, and I'd say that there is less than 2 pages of that. Otherwise, it's more like a celebration thread for those who go this route. Use it as such, and you'll be fine.

A big part of the choice is also what you feel comfortable with. Some people calculate risks and choose investment over paying off because it is the most profitable way within their scope of calculation. Personally, I chose that guaranteed with no risks result of wiping out the mortgage and will start investing after clearing it (only 19k to go!).

I have waffled on this one over and over.  Good job only having $19K to go! There's something intrinsicly satisfying in having a paid off home. 
Why the hell are we going shopping? Buy sh*t, return other sh*t, go through sh*t and donate sh*t. Complain about having too much sh*t. Repeat. (Bracken Joy 2/17)




wauske

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Re: Mortgage Payoff Club!!
« Reply #1157 on: February 21, 2017, 02:13:40 PM »
Kinda shocked to see the pay off home versus invest debate in this thread. Indeed it is an interesting debate (i am personally on the slow-pay-off side), but I'd like to see this thread be a safe space for people who take the commendable step of living in a paid-for house.

The consumer-world celebrates people for buying things, even when some of those things may detract from over-all wealth. Why shouldn't we celebrate this triumph of anti-consumerism?

Don't be that shocked. It's 24 pages long, and I'd say that there is less than 2 pages of that. Otherwise, it's more like a celebration thread for those who go this route. Use it as such, and you'll be fine.

A big part of the choice is also what you feel comfortable with. Some people calculate risks and choose investment over paying off because it is the most profitable way within their scope of calculation. Personally, I chose that guaranteed with no risks result of wiping out the mortgage and will start investing after clearing it (only 19k to go!).

I have waffled on this one over and over.  Good job only having $19K to go! There's something intrinsicly satisfying in having a paid off home.
When in doubt, why not split between both?
Everything I say is my personal opinion which is based on my subjective experience.

couponvan

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Re: Mortgage Payoff Club!!
« Reply #1158 on: February 21, 2017, 02:40:09 PM »
Kinda shocked to see the pay off home versus invest debate in this thread. Indeed it is an interesting debate (i am personally on the slow-pay-off side), but I'd like to see this thread be a safe space for people who take the commendable step of living in a paid-for house.

The consumer-world celebrates people for buying things, even when some of those things may detract from over-all wealth. Why shouldn't we celebrate this triumph of anti-consumerism?

Don't be that shocked. It's 24 pages long, and I'd say that there is less than 2 pages of that. Otherwise, it's more like a celebration thread for those who go this route. Use it as such, and you'll be fine.

A big part of the choice is also what you feel comfortable with. Some people calculate risks and choose investment over paying off because it is the most profitable way within their scope of calculation. Personally, I chose that guaranteed with no risks result of wiping out the mortgage and will start investing after clearing it (only 19k to go!).

I have waffled on this one over and over.  Good job only having $19K to go! There's something intrinsicly satisfying in having a paid off home.
When in doubt, why not split between both?
Ha...paid off one, and kept a mortgage 2.625% 15 yr. on the other....see, I waffle quite well.  I think when my invested assets hit $1.0M I will switch back to paying off the remaining main house mortgage. Currently up to paying off $1.5K in principal each month - would like to bump that to $2.0K in principal each month starting in April.
Why the hell are we going shopping? Buy sh*t, return other sh*t, go through sh*t and donate sh*t. Complain about having too much sh*t. Repeat. (Bracken Joy 2/17)




dreaming

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Re: Mortgage Payoff Club!!
« Reply #1159 on: February 22, 2017, 02:00:00 PM »
I am in the group of paying off my mortgage early.  I don't like owing anyone anything and I will feel like this burden will be lifted.   With that said, we are in the straight stretch of paying it off.  I am looking to be done with it in June.  I just paid for March and so now the balance is $12,716.  It's so close I can taste it.

BlueHouse

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Re: Mortgage Payoff Club!!
« Reply #1160 on: February 23, 2017, 10:39:13 AM »

Ha...paid off one, and kept a mortgage 2.625% 15 yr. on the other....see, I waffle quite well.  I think when my invested assets hit $1.0M I will switch back to paying off the remaining main house mortgage. Currently up to paying off $1.5K in principal each month - would like to bump that to $2.0K in principal each month starting in April.

I used 1.0M as the marker too, but then I kept doing both when I saw how fast the numbers grow .  I also reduced my monthly extra principal payment to just under my full mortgage payment amount.  If my extra payment is under the full monthly PITI amount due to the bank, the bank automatically applies it to principal.  If it is the same or over my monthly payment, then the bank automatically applies it to the next month's payment and then any extra money is applied to additional principal.  For whatever reason, there is no way to default to my preference, so I would have to call the bank every month right before they receive the payment to let them know.  I've never been successful at this, so the change always is made after the payment is made, and their bookkeeping of the change is always very confusing.  So now, I double my mortgage payment, minus $10 dollars.  I think when I want to make a big payment ($20k or more), I'll walk into the bank and make sure they apply it the way I want the first time.  Small sacrifices! 
« Last Edit: April 28, 2017, 09:28:53 AM by BlueHouse »
Sometimes nothing can be a real cool hand

KBecks

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Re: Mortgage Payoff Club!!
« Reply #1161 on: February 23, 2017, 11:35:10 AM »
Bluehouse, our mortgage company, Freedom Mortgage, is weird about taking extra payments.  I am doing old fashioned statement payments which have an area for -- extra principal -- but the opportunity to pay extra is only once a month, if I send in payments in another form, they were applying to the next payment.  This is a little putzy but it works.

For us:
Old balance 79, 950
New balance after March payment 76, 150

We may put some savings towards it and pay down bigger chunks but I want wait another month or two.   Last night my husband said he's willing to go on an AT hike when the mortgage is paid off and kids college is going well.  I say, bring it on!

SAfAmBrit

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Re: Mortgage Payoff Club!!
« Reply #1162 on: February 23, 2017, 11:20:17 PM »
Principal paid off so far

2012 - $3415
2013 - $3994
2014 - $8483
2015 - $38412 (yup got rid of all the debt and $10 000 windfall not expected)
2016 - $67650
2017 - $8964

3/1 Remaining balance $87322. Projected pay off date 09/09/2017 - SO 51st birthday.

4/1 Remaining balance $81837

4/30 Remaining balance $76952 (I owed the tax man!)

5/29 Remaining balance $73836

6/30 Remaining balance $65388

7/29 Remaining balance $60825

8/31 Remaining balance $55728

9/30 Remaining balance $49696

10/31 Remaining balance $39920

11/30 Remaining balance $36721

01/05 Remaining balance $34633

01/29 Remaining balance $32965

02/23 Remaining balance $26692
 
Good month - in the 20's. I am definitely seeing a light at the end of the tunnel.

Simpli-Fi

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Re: Mortgage Payoff Club!!
« Reply #1163 on: February 25, 2017, 03:55:17 PM »

dreaming

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Re: Mortgage Payoff Club!!
« Reply #1164 on: March 02, 2017, 09:37:51 AM »
I am in the group of paying off my mortgage early.  I don't like owing anyone anything and I will feel like this burden will be lifted.   With that said, we are in the straight stretch of paying it off.  I am looking to be done with it in June.  I just paid for March and so now the balance is $12,716.  It's so close I can taste it.

I couldn't fight the urge anymore.  We paid off the house today!  It feels good, but I bet it will feel even better come the end of the month when I normally make a payment and won't have to!

Simpli-Fi

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Re: Mortgage Payoff Club!!
« Reply #1165 on: March 02, 2017, 11:50:36 AM »
^same here.  Money wasn't in the market(wasn't going to jump in now), wasn't doing any good in my savings account.  Mortgage gone.  30 year loan paid off in 11.  Easily one hundred thousand saved in interest.  I never like paying money for not having money.


BlueHouse

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Re: Mortgage Payoff Club!!
« Reply #1166 on: March 02, 2017, 01:36:07 PM »
I couldn't fight the urge anymore.  We paid off the house today!  It feels good, but I bet it will feel even better come the end of the month when I normally make a payment and won't have to!

Woo-hoo!  Good job!   

^same here.  Money wasn't in the market(wasn't going to jump in now), wasn't doing any good in my savings account.  Mortgage gone.  30 year loan paid off in 11.  Easily one hundred thousand saved in interest.  I never like paying money for not having money.
Man, this makes me want to make a big drop into my account.  I have a bunch of cash waiting to invest, but I can't bring myself to do it right now....so it's just sitting in cash doing nothing.  With those options, making a big payment is the better choice, but I'm still hoping for a big dip in the market so I can pile it there instead. I'm still so far away from paying off that even my "big bunches of cash" don't really make a big dent.
Sometimes nothing can be a real cool hand

mies

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Re: Mortgage Payoff Club!!
« Reply #1167 on: March 02, 2017, 02:41:12 PM »
I couldn't fight the urge anymore.  We paid off the house today!  It feels good, but I bet it will feel even better come the end of the month when I normally make a payment and won't have to!

Woo-hoo!  Good job!   

^same here.  Money wasn't in the market(wasn't going to jump in now), wasn't doing any good in my savings account.  Mortgage gone.  30 year loan paid off in 11.  Easily one hundred thousand saved in interest.  I never like paying money for not having money.
Man, this makes me want to make a big drop into my account.  I have a bunch of cash waiting to invest, but I can't bring myself to do it right now....so it's just sitting in cash doing nothing.  With those options, making a big payment is the better choice, but I'm still hoping for a big dip in the market so I can pile it there instead. I'm still so far away from paying off that even my "big bunches of cash" don't really make a big dent.

It's funny how those master plans to pay off the mortgage go out the window when you get super close to paying it off :D Congratulations to everybody that has killed a mortgage recently.
Less is more.

nottoolatetostart

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Re: Mortgage Payoff Club!!
« Reply #1168 on: March 03, 2017, 03:31:45 AM »
I am in the group of paying off my mortgage early.  I don't like owing anyone anything and I will feel like this burden will be lifted.   With that said, we are in the straight stretch of paying it off.  I am looking to be done with it in June.  I just paid for March and so now the balance is $12,716.  It's so close I can taste it.

I couldn't fight the urge anymore.  We paid off the house today!  It feels good, but I bet it will feel even better come the end of the month when I normally make a payment and won't have to!

Congrats. Please let us know how it is. Congrats on waking up knowing it is all YOURS

nottoolatetostart

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Re: Mortgage Payoff Club!!
« Reply #1169 on: March 03, 2017, 03:38:59 AM »
^same here.  Money wasn't in the market(wasn't going to jump in now), wasn't doing any good in my savings account.  Mortgage gone.  30 year loan paid off in 11.  Easily one hundred thousand saved in interest.  I never like paying money for not having money.

Congrats! What an accomplishment.

cheddarpie

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Re: Mortgage Payoff Club!!
« Reply #1170 on: March 03, 2017, 07:32:59 PM »
I am in the group of paying off my mortgage early.  I don't like owing anyone anything and I will feel like this burden will be lifted.   With that said, we are in the straight stretch of paying it off.  I am looking to be done with it in June.  I just paid for March and so now the balance is $12,716.  It's so close I can taste it.

I couldn't fight the urge anymore.  We paid off the house today!  It feels good, but I bet it will feel even better come the end of the month when I normally make a payment and won't have to!


Congratulations!! I was going to post to say, I'm in the same boat -- just over 10k with my March payment and planning to be  done by June. Not sure I'll make it that long now either!

Woohoo!!
« Last Edit: March 05, 2017, 03:32:36 PM by cheddarpie »

SAfAmBrit

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Re: Mortgage Payoff Club!!
« Reply #1171 on: March 05, 2017, 08:13:15 PM »
I am in the group of paying off my mortgage early.  I don't like owing anyone anything and I will feel like this burden will be lifted.   With that said, we are in the straight stretch of paying it off.  I am looking to be done with it in June.  I just paid for March and so now the balance is $12,716.  It's so close I can taste it.

I couldn't fight the urge anymore.  We paid off the house today!  It feels good, but I bet it will feel even better come the end of the month when I normally make a payment and won't have to!
Congratulations

couponvan

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Re: Mortgage Payoff Club!!
« Reply #1172 on: March 06, 2017, 06:54:50 PM »
The renewal letter for my mortgage arrived! I owe $7,361.71. Renewal time means I can pay it off without penalty! Which is, of course, the point. I want to pay it off on April 1 (aka the earliest possible date) but that's on a weekend. Waiting for April 3 might kill me. The indignities I suffer!
There is a small part of me that wants to borrow a ton more on my mortgage, under today's very nice rates, and invest it. That would make sense, numbers-wise. But I'm embarking on a financially risky move (getting tenants in my current home and the new one, taking on a more expensive house) and having lower monthly payments reduces that risk, so I will pay it off. But 2.69% is tempting. Such a pretty interest rate.

IMMA PAY OFF MY MORTGAGE, BITCHEZ!!!!

You go girl!!! I am 2.625% and I think I would be a better payoff person if it were higher. I'm starting to think cash flow though....gotta pay for college next year for kid #1. Not knowing how much that is going to cost is TORTURE!!!
Why the hell are we going shopping? Buy sh*t, return other sh*t, go through sh*t and donate sh*t. Complain about having too much sh*t. Repeat. (Bracken Joy 2/17)




pdxmonkey

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Re: Mortgage Payoff Club!!
« Reply #1173 on: March 06, 2017, 10:54:05 PM »
Still making steady progress. I too am looking forward to having more flexible cash flow in the not too distant future.

Jan. 2015 - ~100k
Oct. 2015 - ~$67500
Dec.3, 2015 - ~$60k
Feb. 5, 2016 - $52,108.53
March 7, 2016 - 49,774.21
April 11, 2016 - 48,700 to go. Had to pay taxes this month.
May - failed to report in
June - $42,853.69
July - $41,597.20
August 2016 - 38,000
September 2016 - $36,230.88
October 2016 - $34,250. Now down to April 2020 at minimum payments.
November 2016 - $32,211 and some change.
December 2016 - $29,990 and change. Under 30k to end the year.
January 2017 - $28,200
February 2017 - $24800
March 2017 - $23k+ as of today. Going to push this down to a bit under $20k with the bulk of my tax refund.
« Last Edit: March 06, 2017, 11:00:17 PM by pdxmonkey »

asauer

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Re: Mortgage Payoff Club!!
« Reply #1174 on: March 09, 2017, 06:09:18 AM »
Still making steady progress. I too am looking forward to having more flexible cash flow in the not too distant future.

Jan. 2015 - ~100k
Oct. 2015 - ~$67500
Dec.3, 2015 - ~$60k
Feb. 5, 2016 - $52,108.53
March 7, 2016 - 49,774.21
April 11, 2016 - 48,700 to go. Had to pay taxes this month.
May - failed to report in
June - $42,853.69
July - $41,597.20
August 2016 - 38,000
September 2016 - $36,230.88
October 2016 - $34,250. Now down to April 2020 at minimum payments.
November 2016 - $32,211 and some change.
December 2016 - $29,990 and change. Under 30k to end the year.
January 2017 - $28,200
February 2017 - $24800
March 2017 - $23k+ as of today. Going to push this down to a bit under $20k with the bulk of my tax refund.
Great job!  Keep plugging!

SAfAmBrit

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Re: Mortgage Payoff Club!!
« Reply #1175 on: March 09, 2017, 08:19:56 AM »
Could not resist - put a small payment in so i could be in the teens today. $19900. It is soooo close now.

theadvicist

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Re: Mortgage Payoff Club!!
« Reply #1176 on: March 09, 2017, 09:41:42 AM »
Could not resist - put a small payment in so i could be in the teens today. $19900. It is soooo close now.

That must feel so good! Not much to go now.

plainjane

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Re: Mortgage Payoff Club!!
« Reply #1177 on: March 09, 2017, 10:35:44 AM »
Could not resist - put a small payment in so i could be in the teens today. $19900. It is soooo close now.

I've said it before, and I will say it again, the great thing about paying down the mortgage is that when you get near the end, every little bit makes a visible difference.  You are so close.

When investing, after you hit a certain point, throwing an extra $100 in looks like just noise, so there is less positive reinforcement to do so.
Using procrastination to my advantage since 2001.

CM*TO Is a thing!! We have a few bunks left - join us in September.

AustinHorn

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Mortgage Payoff Club!!
« Reply #1178 on: March 09, 2017, 12:38:40 PM »
Think I'm going to start paying off the mortgage this month.  Here's my stats:

Balance: $101,998.51
Term:  15 year fixed (10 years, 3 months left)
Rate:  2.875%

I think I could get it knocked out in 2 years (prior to my 41st birthday) if I'm diligent.  I'm maxing out my 401k, have no other debts and have cash for nearly 12 months of emergency living plus a $10k used car if mine happens to crap out on me (115k miles currently), which isn't likely.

I have a few thoughts on why I want to prepay the mortgage:

1. Being debt free trumps the math for me.  The math leans to invest, but I'd rather be debt free.
2.  Equity exposure - Currently I don't have any bonds, and by allocating this portion of my savings to my mortgage, that gives me a guaranteed 2.875% on my "fixed income" portfolio.  This is the equivalent of buying 4-5 year investment grade corporate bonds at today's rates.  I prefer the mortgage prepay guarantee.  I'm investing my 401k contributions entirely in the stock market.  I'm also one who is concerned about the market at these valuations, so I'm perfectly fine with allocating a larger portion of my savings to fixed income (mortgage payoff) than the stock market.
3.  Tax Deduction - This may have been stated on the thread already, but the tax deduction of a mortgage is not as beneficial as it's purported to be if you are making the "do I pay it down" decision.  If you are considering prepaying your mortgage, you are most likely going to be doing this with after-tax dollars (i.e. non-IRA/401k dollars).  If you don't prepay the mortgage and opt to invest those dollars, you are indeed getting a tax deduction for the mortgage interest.  But assuming you are investing the dollars that would go to mortgage prepayment into an after-tax account (my scenario since I'm maxing my 401k), then you will be taxed on any dividends/interest/capital gains realized from that investment.  So by not paying down the mortgage you are preserving the tax deduction but at the same time adding taxable investment income.  While you do have a limited amount of control over how those earnings are taxed, you are still generating incremental tax on those dollars when they are invested.  So the benefit of the mortgage interest deduction is muted, especially for my scenario.

So I'm going to put a little towards it this month and start with a prepayment plan in April.  Looking forward to being debt free!!!!
« Last Edit: March 09, 2017, 09:59:05 PM by AustinHorn »

mies

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Re: Mortgage Payoff Club!!
« Reply #1179 on: March 11, 2017, 02:40:05 AM »
Think I'm going to start paying off the mortgage this month.  Here's my stats:

Balance: $101,998.51
Term:  15 year fixed (10 years, 3 months left)
Rate:  2.875%

I think I could get it knocked out in 2 years (prior to my 41st birthday) if I'm diligent.  I'm maxing out my 401k, have no other debts and have cash for nearly 12 months of emergency living plus a $10k used car if mine happens to crap out on me (115k miles currently), which isn't likely.

I have a few thoughts on why I want to prepay the mortgage:

1. Being debt free trumps the math for me.  The math leans to invest, but I'd rather be debt free.
2.  Equity exposure - Currently I don't have any bonds, and by allocating this portion of my savings to my mortgage, that gives me a guaranteed 2.875% on my "fixed income" portfolio.  This is the equivalent of buying 4-5 year investment grade corporate bonds at today's rates.  I prefer the mortgage prepay guarantee.  I'm investing my 401k contributions entirely in the stock market.  I'm also one who is concerned about the market at these valuations, so I'm perfectly fine with allocating a larger portion of my savings to fixed income (mortgage payoff) than the stock market.
3.  Tax Deduction - This may have been stated on the thread already, but the tax deduction of a mortgage is not as beneficial as it's purported to be if you are making the "do I pay it down" decision.  If you are considering prepaying your mortgage, you are most likely going to be doing this with after-tax dollars (i.e. non-IRA/401k dollars).  If you don't prepay the mortgage and opt to invest those dollars, you are indeed getting a tax deduction for the mortgage interest.  But assuming you are investing the dollars that would go to mortgage prepayment into an after-tax account (my scenario since I'm maxing my 401k), then you will be taxed on any dividends/interest/capital gains realized from that investment.  So by not paying down the mortgage you are preserving the tax deduction but at the same time adding taxable investment income.  While you do have a limited amount of control over how those earnings are taxed, you are still generating incremental tax on those dollars when they are invested.  So the benefit of the mortgage interest deduction is muted, especially for my scenario.

So I'm going to put a little towards it this month and start with a prepayment plan in April.  Looking forward to being debt free!!!!

Awesome. It sounds like you have thought this through pretty well. It is a big relief being out of debt completely. If the markets take a dive or you lose your job, or both happen simultaneously, not having to worry about the burden of a mortgage payment is a huge relief. Plus, once the mortgage is paid, you can really double down on investing. The second we paid off our mortgage, I doubled my 401k contributions without breaking a sweat. I couldn't say that when we were still paying the mortgage.
Less is more.

frugalkristen

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Re: Mortgage Payoff Club!!
« Reply #1180 on: March 11, 2017, 05:34:48 AM »
Think I'm going to start paying off the mortgage this month.  Here's my stats:

Balance: $101,998.51
Term:  15 year fixed (10 years, 3 months left)
Rate:  2.875%

I think I could get it knocked out in 2 years (prior to my 41st birthday) if I'm diligent.  I'm maxing out my 401k, have no other debts and have cash for nearly 12 months of emergency living plus a $10k used car if mine happens to crap out on me (115k miles currently), which isn't likely.


I have a few thoughts on why I want to prepay the mortgage:

1. Being debt free trumps the math for me.  The math leans to invest, but I'd rather be debt free.
2.  Equity exposure - Currently I don't have any bonds, and by allocating this portion of my savings to my mortgage, that gives me a guaranteed 2.875% on my "fixed income" portfolio.  This is the equivalent of buying 4-5 year investment grade corporate bonds at today's rates.  I prefer the mortgage prepay guarantee.  I'm investing my 401k contributions entirely in the stock market.  I'm also one who is concerned about the market at these valuations, so I'm perfectly fine with allocating a larger portion of my savings to fixed income (mortgage payoff) than the stock market.
3.  Tax Deduction - This may have been stated on the thread already, but the tax deduction of a mortgage is not as beneficial as it's purported to be if you are making the "do I pay it down" decision.  If you are considering prepaying your mortgage, you are most likely going to be doing this with after-tax dollars (i.e. non-IRA/401k dollars).  If you don't prepay the mortgage and opt to invest those dollars, you are indeed getting a tax deduction for the mortgage interest.  But assuming you are investing the dollars that would go to mortgage prepayment into an after-tax account (my scenario since I'm maxing my 401k), then you will be taxed on any dividends/interest/capital gains realized from that investment.  So by not paying down the mortgage you are preserving the tax deduction but at the same time adding taxable investment income.  While you do have a limited amount of control over how those earnings are taxed, you are still generating incremental tax on those dollars when they are invested.  So the benefit of the mortgage interest deduction is muted, especially for my scenario.

So I'm going to put a little towards it this month and start with a prepayment plan in April.  Looking forward to being debt free!!!!

Awesome. It sounds like you have thought this through pretty well. It is a big relief being out of debt completely. If the markets take a dive or you lose your job, or both happen simultaneously, not having to worry about the burden of a mortgage payment is a huge relief. Plus, once the mortgage is paid, you can really double down on investing. The second we paid off our mortgage, I doubled my 401k contributions without breaking a sweat. I couldn't say that when we were still paying the mortgage.

Love this!  I started paying it down last month (an extra $500).  Other pieces to the math that people don't think about -

I take the standard deduction so there is no benefit to paying mortgage interest.

I am not a high earner and I have 2 kids in college so those deductions bring my tax base to $0.  Even maxing my 401K isn't a huge benefit.

I have to fill out the FAFSA each year and my home equity does not count against me.

My mortgage is my only debt.  I also look at paying it off early as my 'bond' portion of my portfolio.

I have a decent 401K and Roth IRA balance (I am still contributing) and a large (larger than I should have but it helps me sleep at night) emergency fund.

I could pay it of in 2 years but I'm thinking I will take up to 5 yrs and add to my other investments also to give myself a little of both worlds.

cantgrowone

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Re: Mortgage Payoff Club!!
« Reply #1181 on: March 17, 2017, 10:00:40 AM »
Hi there. Somehow I just stumbled across this thread. DW and I want to pay off our mortgage early. We have $52k & 27 years left at 3.75%. We have the cash to pay it off today but DW is skeptical of taking a 'chunk' out of our savings. After paying off we will have a 6 month EF.

Should we just pull the trigger and start putting our mortgage payment in a brokerage account?
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mies

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Re: Mortgage Payoff Club!!
« Reply #1182 on: March 17, 2017, 02:49:37 PM »
Hi there. Somehow I just stumbled across this thread. DW and I want to pay off our mortgage early. We have $52k & 27 years left at 3.75%. We have the cash to pay it off today but DW is skeptical of taking a 'chunk' out of our savings. After paying off we will have a 6 month EF.

Should we just pull the trigger and start putting our mortgage payment in a brokerage account?

If the money you have to pay off the mortgage is just sitting in a checking or savings account earning less interest than the mortgage is costing you in interest, I would just kill the mortgage. You have to respect your wife's wishes on the money too though and maybe come up with a plan to rebuild your emergency fund quickly if you want more than 6 months in the bank. Best of luck with whatever decision  you guys finally end up making.
Less is more.

Brother Esau

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Re: Mortgage Payoff Club!!
« Reply #1183 on: March 17, 2017, 06:11:59 PM »
We started additional payments to the mortgage a few months ago. Figure we can do at least $1,000 or more extra each month by living a stache lifestyle. thank you MMM peeps!

frizzywhiskers

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Re: Mortgage Payoff Club!!
« Reply #1184 on: March 28, 2017, 07:34:20 PM »
First Quarter 2017 Update:

Starting mortgage = $435,000, 5 year term @ 3.26% (starting Sept. 30, 2013)
Goal = Full Mortgage Payoff by end of 5 year term (Sept. 30, 2018)

Progress:
- Mortgage amount as of December 25, 2014:  $380,819
- Mortgage amount as of April 2, 2015: $359,144
- Mortgage amount as of July 9, 2015: $324,055
- Mortgage amount as of December 31, 2015:  $285,708
- Mortgage amount - June 2, 2016 - $253,560
- Mortgage amount - September 8, 2016 - $232,502
- Mortgage amount - December 30, 2016 - $194,252
- Mortgage amount - March 30, 2017 - $161,932

Making some great progress and on track for 2018 payoff.  Still feels like a long haul though, I'm ready for it to be done.  Husband and I are thinking of pulling the plug on full time work once this mortgage is gone!
« Last Edit: March 28, 2017, 07:37:37 PM by frizzywhiskers »

SAfAmBrit

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Re: Mortgage Payoff Club!!
« Reply #1185 on: March 29, 2017, 05:57:38 PM »
Principal paid off so far

2012 - $3415
2013 - $3994
2014 - $8483
2015 - $38412 (yup got rid of all the debt and $10 000 windfall not expected)
2016 - $67650
2017 - $17664

3/1 Remaining balance $87322. Projected pay off date 09/09/2017 - SO 51st birthday.

4/1 Remaining balance $81837

4/30 Remaining balance $76952 (I owed the tax man!)

5/29 Remaining balance $73836

6/30 Remaining balance $65388

7/29 Remaining balance $60825

8/31 Remaining balance $55728

9/30 Remaining balance $49696

10/31 Remaining balance $39920

11/30 Remaining balance $36721

01/05 Remaining balance $34633

01/29 Remaining balance $32965

02/23 Remaining balance $26692

03/29 Remaining Balance $17963
 
So starting to get excited now - my mortgage is a teenager. Below $20000. I remember sitting at work thinking I would be 70 before the mortgage was done 5 years ago. I will be 45 should all go well! I fluttered with the idea of withdrawing my savings - but I want the satisfaction of staying the course.

KBecks

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Re: Mortgage Payoff Club!!
« Reply #1186 on: March 29, 2017, 06:02:49 PM »

Balance after March payment 76, 150

Putting an extra $5k on this month, so our balance after the April payment will be approx. $70,390.

We are making progress.  It feels slow!  It feels so slow, but...  we should be done in one year to 18 months.  Not bad!

frizzywhiskers

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Re: Mortgage Payoff Club!!
« Reply #1187 on: April 01, 2017, 10:40:54 AM »
Still feels like a long haul though, I'm ready for it to be done.  Husband and I are thinking of pulling the plug on full time work once this mortgage is gone!
Us too :) Once we won't need such high cash flow each month, it will be easy to scale back on work. Just need to get through the next little while! Good luck.
You as well!  Sounds like we are on similiar time lines! 

Gardo

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Re: Mortgage Payoff Club!!
« Reply #1188 on: April 02, 2017, 10:21:08 AM »
Curious how much is your total interest percentage paid on the life of the loan?  I'm thinking you could safely estimate it since you guys are close to paying off your mortgage. 

Finallyunderstand

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Re: Mortgage Payoff Club!!
« Reply #1189 on: April 04, 2017, 08:14:58 PM »
About two weeks ago my wife and I took the plunge and paid the last $78,900 on our mortgage and killed it!  Zero debts to anyone anywhere in life!  That  feeling is worth a lot and to me it beat the argument of saying the stock market is better in the long run.  Yes, it may be but this feeling is a rich feeling!

Focusing on investments now and FIRE by 40!

Trifele

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Re: Mortgage Payoff Club!!
« Reply #1190 on: April 05, 2017, 04:58:01 AM »
Congrats FinallyUnderstand!  Awesome!

We are timing our mortgage payoff with our FIRE plans.  Current balance is $81,999, last payment will be December 2018 at the latest.   Target FIRE is August 1 of 2019.  It's feeling pretty close!  I am smelling the barn big time. 

talltexan

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Re: Mortgage Payoff Club!!
« Reply #1191 on: April 05, 2017, 09:16:26 AM »
As you might think from my username, I have some knowledge of farm things, but I've never heard the phrase "smelling the barn". It doesn't sound like something I want to be doing for very long.

Trifele

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Re: Mortgage Payoff Club!!
« Reply #1192 on: April 05, 2017, 10:15:11 AM »
As you might think from my username, I have some knowledge of farm things, but I've never heard the phrase "smelling the barn". It doesn't sound like something I want to be doing for very long.

Haha, TallTexan!  It means getting your second wind, like a burst of energy as your goal is in sight.  Maybe it is a Midwestern-ism.  I guess it comes from the way a horse picks up the pace when the barn is in sight at the end of a journey (?)   

theadvicist

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Re: Mortgage Payoff Club!!
« Reply #1193 on: April 06, 2017, 02:15:38 AM »

Haha, TallTexan!  It means getting your second wind, like a burst of energy as your goal is in sight.  Maybe it is a Midwestern-ism.  I guess it comes from the way a horse picks up the pace when the barn is in sight at the end of a journey (?)   

I have never heard of this phrase, but I use Map my Run and I have noticed that after I turn a corner and can see 'home' about 1/2 a mile away, I do my best pace of the whole run (without thinking I am altering my pace at all). Sounds like I can 'smell the barn'!

Regular payment just took us under 81k. The 70s are so close!

Nederstash

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Re: Mortgage Payoff Club!!
« Reply #1194 on: April 06, 2017, 05:07:08 AM »
As you might think from my username, I have some knowledge of farm things, but I've never heard the phrase "smelling the barn". It doesn't sound like something I want to be doing for very long.

Haha, TallTexan!  It means getting your second wind, like a burst of energy as your goal is in sight.  Maybe it is a Midwestern-ism.  I guess it comes from the way a horse picks up the pace when the barn is in sight at the end of a journey (?)

So fun to see this saying! In Dutch it's 'smelling the stable', means exactly the same thing! That being said, I'm still above the 200k mark so I definitely don't even have the faintest whiff of anything remotely rural.

markbike528CBX

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Re: Mortgage Payoff Club!!
« Reply #1195 on: April 06, 2017, 09:28:05 AM »
Since we travel far for work, at the end of the job, the phrase is "smelling the jet fuel".  I've been on the plane short hours after the Project Manager says go home.   However, it is a warning phrase, because people "smelling the jet fuel" can try to take shortcuts and screw up, delaying their leaving.

couponvan

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Re: Mortgage Payoff Club!!
« Reply #1196 on: April 25, 2017, 10:38:43 AM »
As you might think from my username, I have some knowledge of farm things, but I've never heard the phrase "smelling the barn". It doesn't sound like something I want to be doing for very long.

Haha, TallTexan!  It means getting your second wind, like a burst of energy as your goal is in sight.  Maybe it is a Midwestern-ism.  I guess it comes from the way a horse picks up the pace when the barn is in sight at the end of a journey (?)

So fun to see this saying! In Dutch it's 'smelling the stable', means exactly the same thing! That being said, I'm still above the 200k mark so I definitely don't even have the faintest whiff of anything remotely rural.
We're with you....Over the $200K mark on the main house....hoping to finish in less than 7 years.
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Indio

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Re: Mortgage Payoff Club!!
« Reply #1197 on: April 25, 2017, 12:02:00 PM »
With tax refund and annual bonus put toward mortgage, I'm smelling the barn or the jet fuel. I'm very tempted to deduct from 8 month EF and make it a 6 mth EF so I can put another chunk toward it. I have a guaranteed 6 mth severance package so it doesn't seem too risky to me. Being the sole earner, I'm always cautious, probably too cautious.
Was so excited to see the balance drop, that I was in a great mood thinking about it for days!

SAfAmBrit

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Re: Mortgage Payoff Club!!
« Reply #1198 on: April 27, 2017, 08:34:54 AM »
Principal paid off so far

2012 - $3415
2013 - $3994
2014 - $8483
2015 - $38412 (yup got rid of all the debt and $10 000 windfall not expected)
2016 - $67650
2017 - $22764

3/1 Remaining balance $87322. Projected pay off date 09/09/2017 - SO 51st birthday.

4/1 Remaining balance $81837

4/30 Remaining balance $76952 (I owed the tax man!)

5/29 Remaining balance $73836

6/30 Remaining balance $65388

7/29 Remaining balance $60825

8/31 Remaining balance $55728

9/30 Remaining balance $49696

10/31 Remaining balance $39920

11/30 Remaining balance $36721

01/05 Remaining balance $34633

01/29 Remaining balance $32965

02/23 Remaining balance $26692

03/29 Remaining Balance $17963

04/27 Remaining balance $12903
 
Jet fuel ever present! I will be in four figures next month - it is unbelievable!

iluvzbeach

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Re: Mortgage Payoff Club!!
« Reply #1199 on: April 27, 2017, 08:47:27 AM »
Nice work!
Planning to be FIREd in 2020!