Author Topic: Mortgage Payoff Club!!  (Read 246533 times)

pdxmonkey

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Re: Mortgage Payoff Club!!
« Reply #1200 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 #1201 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 #1202 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 #1203 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 #1204 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.

AustinHorn

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Mortgage Payoff Club!!
« Reply #1205 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 #1206 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 #1207 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 #1208 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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I didn't proof read.

mies

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Re: Mortgage Payoff Club!!
« Reply #1209 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 #1210 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 #1211 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 #1212 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 #1213 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!

allsummerlong

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Re: Mortgage Payoff Club!!
« Reply #1214 on: April 01, 2017, 10:31:26 AM »
Since joining this thread:
Jan'15 - $139k
Apr'15 - $131k
Jun'15 - $126k
Oct '15 - $119k
Feb'16 - $108k
Jul'16  - $99k
Oct'16 - $90k

Now at $79,000. Getting there!

Target payoff is Summer 2019, at which point I will scale back to minimal (or perhaps none?) work while DH continues FT (his choice - loves his job), although he may take a 1-yr sabbatical in 2020 or 2021 as well. We could technically FIRE right now if we moved to a LCOL area, but we like where we live at the moment. It works for us.

It feels good to have the plan we made so many years ago falling into place.

allsummerlong

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Re: Mortgage Payoff Club!!
« Reply #1215 on: April 01, 2017, 10:34:02 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.

frizzywhiskers

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Re: Mortgage Payoff Club!!
« Reply #1216 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 #1217 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 #1218 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!

bender

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Re: Mortgage Payoff Club!!
« Reply #1219 on: April 04, 2017, 08:42:59 PM »
Congrats!

Trifele

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Re: Mortgage Payoff Club!!
« Reply #1220 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 #1221 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 #1222 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 #1223 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 #1224 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 #1225 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 #1226 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.
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)




Indio

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Re: Mortgage Payoff Club!!
« Reply #1227 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 #1228 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 #1229 on: April 27, 2017, 08:47:27 AM »
Nice work!
Planning to be FIREd in 2020!

Virtus

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Re: Mortgage Payoff Club!!
« Reply #1230 on: April 27, 2017, 06:40:00 PM »
I definitely need to join this thread! Our strategy is a mixture of maxing out the HSA, Roth IRA, and 401K and throwing any extra at the mortgage. We have yet to throw any extra at the mortgage due to major remolding we have been doing since we bought the house but should start extra principle payments in the next few months.

Jul-16    (171,120)
Aug-16    (171,120)
Sep-16    (170,366)
Oct-16    (169,610)
Nov-16    (168,852)
Dec-16    (168,093)
Jan-17    (167,332)
Feb-17    (166,568)
Mar-17    (165,803)
Apr-17    (165,036)


Feb-22      $0 - Projected
« Last Edit: April 27, 2017, 06:41:45 PM by Virtus »

BlueHouse

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Re: Mortgage Payoff Club!!
« Reply #1231 on: April 28, 2017, 10:04:17 AM »
Showing progress in terms of % paid off against initial home value (equity against initial sale price) so I don't get facepunched for too big of a house.
% Equity (against initial sale price)
  • 06/2012 - 25%  (downpayment & first monthly payment)
  • 06/2013 - 27%  (now paying a few hundred extra monthly)
  • 06/2014 - 30%  (now paying 1000 extra each month)
  • 06/2015 - 33%  (still paying 1000 extra each month)
  • 08/2015 - 46%  (big fat payment in preparation for a requested recast next quarter)
  • 03/2016 - 48%  (now paying 1400 extra each month)
  • 08/2016 - 53%  (now paying 6400 extra each month (only did that for 4 months))
  • 12/2016 - Long-awaited recast finally settled.  New payment is $1k less than previously.  Term resets to original 30 years, but I still want to pay this off before the 15-year mark, so I'm paying an extra 1945 each month going forward. 
  • 04/2017 - 55%  (now paying 1945 extra each month)

Current payments (payment + 1945 extra each month) feels like the right amount for my goals and circumstances and will let me meet my goal to pay the house off in 15 years instead of 30.   But when I see other people's progress, I really want to accelerate.  Unfortunately, that is not in sync with my Investment Policy & Asset Allocation goals. 

It's just so much more gratifying to see this number shrink! 
Sometimes nothing can be a real cool hand

runewell

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Re: Mortgage Payoff Club!!
« Reply #1232 on: April 28, 2017, 11:54:33 AM »
1. Being debt free trumps the math for me.  The math leans to invest, but I'd rather be debt free.

So how much did you lose by not investing instead? 

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.

I'm not sure that makes any sense at all.
The long-term capital gains tax rate is 0% for someone who has a 15% ordinary income tax rate.  So you did lose a tax deduction but aren't necessarily paying more taxes is you are prudent.


runewell

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Re: Mortgage Payoff Club!!
« Reply #1233 on: April 28, 2017, 11:55:44 AM »
Still making steady progress. I too am looking forward to having more flexible cash flow in the not too distant future.

If you are paying down the mortgage that quickly, you really don't need "more flexible" cash flow. 

Virtus

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Re: Mortgage Payoff Club!!
« Reply #1234 on: April 28, 2017, 01:31:13 PM »
Still making steady progress. I too am looking forward to having more flexible cash flow in the not too distant future.

If you are paying down the mortgage that quickly, you really don't need "more flexible" cash flow.

This guy is like a vegetarian going to a steak house  to argue over if eating meat is wrong.

There are plenty of other posts (a few below) if you want to argue about whether to pay the mortgage off early or not. This, however, is not one of those threads.

https://forum.mrmoneymustache.com/welcome-to-the-forum/mr-math-and-paying-off-your-mortgage/?topicseen

SAfAmBrit

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Re: Mortgage Payoff Club!!
« Reply #1235 on: April 29, 2017, 09:48:52 AM »
Still making steady progress. I too am looking forward to having more flexible cash flow in the not too distant future.

If you are paying down the mortgage that quickly, you really don't need "more flexible" cash flow.

This guy is like a vegetarian going to a steak house  to argue over if eating meat is wrong.

There are plenty of other posts (a few below) if you want to argue about whether to pay the mortgage off early or not. This, however, is not one of those threads.

https://forum.mrmoneymustache.com/welcome-to-the-forum/mr-math-and-paying-off-your-mortgage/?topicseen

I agree! Maybe he thinks we are idiots just randomly just throwing money at our money at our house without a thought and is trying to save us from ourselves? I am vegetarian.......  Jetfuel!!!

runewell

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Re: Mortgage Payoff Club!!
« Reply #1236 on: May 01, 2017, 07:07:15 AM »
I agree! Maybe he thinks we are idiots

People on this forum will say just about anything to justify what they want to do. 

"The math trumps paying down my house, but I'm going to pay down my house anyway!"
Why shouldn't I ask how costly of a decision that is?  I suppose the reason I shouldn't ask it is maybe I wouldn't trust anyone to come up with a good estimate. 

In the last 5 years the SPY offered an 11.7% rate of return plus dividends that would have pushed the number up to at least 13%.  Anyone who spent five years throwing $1,000/mo at a 4% mortgage instead of investing it lost out on $16,700 of wealth.

Rowellen

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Re: Mortgage Payoff Club!!
« Reply #1237 on: May 01, 2017, 08:11:05 AM »
I'm hoping to have my mortgage paid off in 2 to 3 years. Currently the balance is $151,412.
We're planning to sell an underperforming investment property within the next couple of months to get the balance under 100k. After that it will be a slow slog to the end.

Reducing expenses is a higher priority than investment for us at the moment due to the uncertainty of DH's work and the need for me to change jobs asap that will likely result in a pay cut.

BlueHouse

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Re: Mortgage Payoff Club!!
« Reply #1238 on: May 01, 2017, 12:02:35 PM »
I agree! Maybe he thinks we are idiots

People on this forum will say just about anything to justify what they want to do. 
Why shouldn't I ask how costly of a decision that is?

Because you've entered an ongoing celebration for like-minded people who want the support and encouragement of other like-minded folks, and instead of offering a positive attitude, you're telling other adults that their decisions are stupid for no reason other than to hear yourself talk and to "win at the internet".  This isn't the appropriate place.

How about you pick another topic that exists for debate and go visit THAT group for a while? 
Sometimes nothing can be a real cool hand

pdxmonkey

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Re: Mortgage Payoff Club!!
« Reply #1239 on: May 01, 2017, 02:18:47 PM »
I agree! Maybe he thinks we are idiots

People on this forum will say just about anything to justify what they want to do. 
Why shouldn't I ask how costly of a decision that is?

Because you've entered an ongoing celebration for like-minded people who want the support and encouragement of other like-minded folks, and instead of offering a positive attitude, you're telling other adults that their decisions are stupid for no reason other than to hear yourself talk and to "win at the internet".  This isn't the appropriate place.

How about you pick another topic that exists for debate and go visit THAT group for a while?

The poster is clearly a tool who hasn't read the entire thread. Do you think he tells people who user bonds or treasuries to diversify their portfolio the same thing? Paying your mortgage is not dis similar to purchasing a bond. If you have a sufficient amount going into equities already... And you want to have a person of your money go to something lower risk with a lower return paying the mortgage early is one option for that. I already have something like 60-70% of my post tax income going into equities. I really don't need all of it to go there

farmecologist

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Re: Mortgage Payoff Club!!
« Reply #1240 on: May 01, 2017, 03:07:50 PM »
I agree! Maybe he thinks we are idiots

People on this forum will say just about anything to justify what they want to do. 
Why shouldn't I ask how costly of a decision that is?

Because you've entered an ongoing celebration for like-minded people who want the support and encouragement of other like-minded folks, and instead of offering a positive attitude, you're telling other adults that their decisions are stupid for no reason other than to hear yourself talk and to "win at the internet".  This isn't the appropriate place.

How about you pick another topic that exists for debate and go visit THAT group for a while?

The poster is clearly a tool who hasn't read the entire thread. Do you think he tells people who user bonds or treasuries to diversify their portfolio the same thing? Paying your mortgage is not dis similar to purchasing a bond. If you have a sufficient amount going into equities already... And you want to have a person of your money go to something lower risk with a lower return paying the mortgage early is one option for that. I already have something like 60-70% of my post tax income going into equities. I really don't need all of it to go there

Just a reminder...but if someone wants to hang out with the "anti-pay-off-your-mortage" crowd..there is a thread for that too!

    https://forum.mrmoneymustache.com/throw-down-the-gauntlet/dont-payoff-your-mortgage-club/



runewell

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Re: Mortgage Payoff Club!!
« Reply #1241 on: May 02, 2017, 06:35:36 AM »
Quote
Because you've entered an ongoing celebration for like-minded people who want the support and encouragement of other like-minded folks, and instead of offering a positive attitude, you're telling other adults that their decisions are stupid for no reason other than to hear yourself talk and to "win at the internet".  This isn't the appropriate place.

It's the perfect place for that reason, because some people should probably be lamenting their decision, not celebrating it.
I'm all for asset allocation and when my 15-yr mortgage is paid off in my late 50's I won't have any plans to remortgage or anything.
But when people say that being debt-free is more important than the math, I assume that they haven't done the math - and I wouldn't be surprised if many people were incapable of doing the math.  And I think it's important to say something because the failure to retain low-interest-rate auto and home loans is a real wealth killer around here.


theadvicist

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Re: Mortgage Payoff Club!!
« Reply #1242 on: May 02, 2017, 07:36:22 AM »
Quote
Because you've entered an ongoing celebration for like-minded people who want the support and encouragement of other like-minded folks, and instead of offering a positive attitude, you're telling other adults that their decisions are stupid for no reason other than to hear yourself talk and to "win at the internet".  This isn't the appropriate place.

It's the perfect place for that reason, because some people should probably be lamenting their decision, not celebrating it.
I'm all for asset allocation and when my 15-yr mortgage is paid off in my late 50's I won't have any plans to remortgage or anything.
But when people say that being debt-free is more important than the math, I assume that they haven't done the math - and I wouldn't be surprised if many people were incapable of doing the math.  And I think it's important to say something because the failure to retain low-interest-rate auto and home loans is a real wealth killer around here.

I think it's important to say something when people are being rude. Runewell, I am sure you are trying to help, but you are being rude. It's like you a butting in on a conversation to correct people, but you weren't in the conversation to start with. Yes, this is an open forum, anyone can comment, etc etc. But why not just be nice? Claiming people are 'incapable of maths' when you have already been politely told a couple of times that this thread is intended for celebrations seems very mean spirited to me.

BlueHouse

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Re: Mortgage Payoff Club!!
« Reply #1243 on: May 02, 2017, 08:59:25 AM »
Quote
Because you've entered an ongoing celebration for like-minded people who want the support and encouragement of other like-minded folks, and instead of offering a positive attitude, you're telling other adults that their decisions are stupid for no reason other than to hear yourself talk and to "win at the internet".  This isn't the appropriate place.

It's the perfect place for that reason, because some people should probably be lamenting their decision, not celebrating it.
I'm all for asset allocation and when my 15-yr mortgage is paid off in my late 50's I won't have any plans to remortgage or anything.
But when people say that being debt-free is more important than the math, I assume that they haven't done the math - and I wouldn't be surprised if many people were incapable of doing the math.  And I think it's important to say something because the failure to retain low-interest-rate auto and home loans is a real wealth killer around here.


Now that I know your circumstances, perhaps you need to realize that you have NO IDEA of the circumstances of the other people here.  For instance, many of us have a goal of paying off a 30-year mortgage within 15 years -- the same as you!  But we may need more flexibility in the payment schedule.  So we call it paying off early.  There is literally no difference, other than we may pay a slightly higher interest rate in return for flexibility. 

Anyway, I don't want to argue as this is a space for celebration and encouragement and really no debate is necessary as the title of the thread says it all -- we've already decided a course of action that is appropriate for our circumstances, so no comment from you is necessary or desired. 
Sometimes nothing can be a real cool hand

runewell

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Re: Mortgage Payoff Club!!
« Reply #1244 on: May 02, 2017, 11:22:02 AM »

Anyway, I don't want to argue as this is a space for celebration and encouragement and really no debate is necessary as the title of the thread says it all

If you go back and read the original first page of this thread, you'll see there is a lot more to this thread than just celebration.  If this thread has turned into complete celebration, that means there probably aren't enough of us discouraging the accelerated paydown of a mortgage.   

runewell

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Re: Mortgage Payoff Club!!
« Reply #1245 on: May 02, 2017, 11:32:00 AM »

Now that I know your circumstances, perhaps you need to realize that you have NO IDEA of the circumstances of the other people here.  For instance, many of us have a goal of paying off a 30-year mortgage within 15 years -- the same as you!  But we may need more flexibility in the payment schedule.  So we call it paying off early.  There is literally no difference, other than we may pay a slightly higher interest rate in return for flexibility. 


This isn't the same as me, I am paying down a 15-yr mortgage in 15 years.  If you need more flexibility in the payment schedule, then perhaps your emergency fund isn't big enough or you have too much house.  Nevertheless the same principle applies: if your 30-yr mortgage is anywhere near 4% or less you will probably come ahead long-term by not paying down your mortgage early and will probably lose out on wealth as a result. 

But you are right, I don't know everyone's circumstances.  A paydown could be sensible from a risk tolerance / asset allocation point of view.  But not knowing individual details, I certainly wouldn't jump to that conclusion.   

pdxmonkey

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Re: Mortgage Payoff Club!!
« Reply #1246 on: May 02, 2017, 05:35:29 PM »
So... why didn't you get a 30 year mortgage and invest the difference in payment with a 15 year mortgage? Clearly you haven't done the math. Nobody should use a 15 year mortgage when a 30 year mortgage is available for just .25% higher. Let's say you took a 100000 15 year at 3.5% instead of 30 at 3.75%. the payment will be 715 instead of 463. If you put the 252 into equities every month with just an 8% return you would have 87,782.98 extra after 15 years. Why are you throwing this away? Compare this to the less than 10000 extra you would have paid in interest and your 15 year loan is clearly a bad decision.

BlueHouse

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Re: Mortgage Payoff Club!!
« Reply #1247 on: May 03, 2017, 10:46:47 AM »
So... why didn't you get a 30 year mortgage and invest the difference in payment with a 15 year mortgage? Clearly you haven't done the math. Nobody should use a 15 year mortgage when a 30 year mortgage is available for just .25% higher. Let's say you took a 100000 15 year at 3.5% instead of 30 at 3.75%. the payment will be 715 instead of 463. If you put the 252 into equities every month with just an 8% return you would have 87,782.98 extra after 15 years. Why are you throwing this away? Compare this to the less than 10000 extra you would have paid in interest and your 15 year loan is clearly a bad decision.
Or better yet, why not an interest-only loan? 
Sometimes nothing can be a real cool hand

talltexan

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Re: Mortgage Payoff Club!!
« Reply #1248 on: May 03, 2017, 12:03:57 PM »
That 0.25% difference between 30-year and 15-year sounds low. Did you buy down points?

I'd expect a rate difference ofsomething more like 0.6%, perhaps even greater.

DesireeD

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Re: Mortgage Payoff Club!!
« Reply #1249 on: May 03, 2017, 10:12:12 PM »
Paid off our mortgage on the 25th of this month. Still feels like it's not real. That's been our goal for years. I've always told my husband he can't buy things until the mortgage is paid and now that it is, he doesn't want any of that stuff anymore. Mustashian people problems.