Author Topic: Mortgage Payoff Club!!  (Read 451835 times)

talltexan

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Re: Mortgage Payoff Club!!
« Reply #1700 on: July 17, 2018, 08:01:30 AM »
I'm officially pledging to stop going back and forth between investing and paying off my mortgage.  I'm committing to paying off my mortgage.  I know that market returns may be higher, but I want the freedom of being debt free and I want to free up space for eventual Roth conversion ladders.  I'm using a HELOC to help me.  The HELOC cost me $175 for the condo questionnaire, but there were no closing costs, appraisal fees or any other fees.   This process starts Monday!  The plan is to apply most of the HELOC amount to the mortgage, deposit all extra funds and income into the HELOC and repeat when the balance gets back to the original amount.  When I make the lump sum payments to the mortgage, I will recast the mortgage.  This will reduce my required monthly payments so the difference will go back to the HELOC.  There is a $100 fee per recast with no limits on the amount of recasts possible.  I did not pay for any software to set anything up.  It's just me my spreadsheets, Mint and Personal Capital.  We'll see how this goes.     

Starting Mortgage Balance: $182,515
Starting HELOC funds available: $56,000
HELOC intro rate for the next 12 months: 2.74%
Mortgage Interest rate: 3.99%
HELOC rate after 12 months = Prime rate -.25 with a green energy purchase

Someone mentioned this a while back, so I looked into and I flat don't see how it speeds up paying off the mortgage any more than simply making additional payments.   Is there something I'm missing?

When I first learned about the HELOC method, I was skeptical, but I spent all afternoon making a spreadsheet. The reason it works is that you immediately put the money toward your mortgage, but time your bills that you pay from your HELOC for the end of the month, so there's actually a decent amount of float in your favor. Redbirdfan's HELOC has the added advantage of the lower interest rate.

Accidental Miser

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Re: Mortgage Payoff Club!!
« Reply #1701 on: July 18, 2018, 08:35:01 PM »
So, I’m going to start posting here since paying off the mortgages is the next thing in line for us.  We have three mortgages:

53k at 4% which I am currently sitting on the cash for the payoff and will be completed by the end of the month.
246k at 4% on the house that we are renting to our son with a purchase agreement to be completed by November.
107k at 3.5% on our home property of 17 acres which has two houses, one with a finished apartment in the basement.

I should note that we collect about 4000 per month in rent from these properties and live in one of them so they’re all producing for us.  I have mixed feelings about paying them off but I don’t want to carry debt into early retirement.

Mortgage total on 7/1/18 = 406k

MangoAtPlay

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Re: Mortgage Payoff Club!!
« Reply #1702 on: July 19, 2018, 11:27:43 AM »
 Hi All -
 Just checking in to announce we paid off our mortgage July 1st!!!  We won't really notice a difference until the next paycheck though!  So glad to have the freedom to spend/save that money elsewhere!

markbike528CBX

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Re: Mortgage Payoff Club!!
« Reply #1703 on: July 19, 2018, 02:37:47 PM »
Hi All -
 Just checking in to announce we paid off our mortgage July 1st!!!  We won't really notice a difference until the next paycheck though!  So glad to have the freedom to spend/save that money elsewhere!
It will be a surreal moment when you check your accounts and you don't have that expense.
Congrats!

frizzywhiskers

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Re: Mortgage Payoff Club!!
« Reply #1704 on: July 19, 2018, 06:42:03 PM »
Hi All -
 Just checking in to announce we paid off our mortgage July 1st!!!  We won't really notice a difference until the next paycheck though!  So glad to have the freedom to spend/save that money elsewhere!

Congratulations!  That will be an amazing feeling!

Megs193

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Re: Mortgage Payoff Club!!
« Reply #1705 on: July 19, 2018, 06:52:40 PM »
Hi All -
 Just checking in to announce we paid off our mortgage July 1st!!!  We won't really notice a difference until the next paycheck though!  So glad to have the freedom to spend/save that money elsewhere!

Congrats!

pdxmonkey

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Re: Mortgage Payoff Club!!
« Reply #1706 on: July 19, 2018, 08:13:49 PM »
Congratulations.

MaybeBabyMustache

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Re: Mortgage Payoff Club!!
« Reply #1707 on: July 20, 2018, 08:49:12 AM »
We have a vacation house & I'm actively trying to pay off the mortgage. Starting balance was $330K, and we're down to $217K. I'm super excited to get below $200K, and am trying to hit that in 2018. I only use extra funding (e.g. money that was unexpected, side hustle, random rebates/checks, etc) for this, so it will be tricky. But, I'm doing it! It would be great to free up the $1K or month a so of mortgage payments as we get closer to FIRE

Accidental Miser

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Re: Mortgage Payoff Club!!
« Reply #1708 on: July 24, 2018, 04:11:06 PM »
So, I’m going to start posting here since paying off the mortgages is the next thing in line for us.  We have three mortgages:

53k at 4% which I am currently sitting on the cash for the payoff and will be completed by the end of the month.
246k at 4% on the house that we are renting to our son with a purchase agreement to be completed by November.
107k at 3.5% on our home property of 17 acres which has two houses, one with a finished apartment in the basement.

I should note that we collect about 4000 per month in rent from these properties and live in one of them so they’re all producing for us.  I have mixed feelings about paying them off but I don’t want to carry debt into early retirement.

Mortgage total on 7/1/18 = 406k

53k mortgage paid off today.  353k left to go! 

frizzywhiskers

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Re: Mortgage Payoff Club!!
« Reply #1709 on: July 24, 2018, 07:24:22 PM »
So, I’m going to start posting here since paying off the mortgages is the next thing in line for us.  We have three mortgages:

53k at 4% which I am currently sitting on the cash for the payoff and will be completed by the end of the month.
246k at 4% on the house that we are renting to our son with a purchase agreement to be completed by November.
107k at 3.5% on our home property of 17 acres which has two houses, one with a finished apartment in the basement.

I should note that we collect about 4000 per month in rent from these properties and live in one of them so they’re all producing for us.  I have mixed feelings about paying them off but I don’t want to carry debt into early retirement.

Mortgage total on 7/1/18 = 406k

53k mortgage paid off today.  353k left to go! 

Wahoo!  Nice work! :-)

indentured4now

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Re: Mortgage Payoff Club!!
« Reply #1710 on: July 24, 2018, 07:45:29 PM »
Way to go MangoAtPlay...  Big step on the way to FI!

red_pill

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Re: Mortgage Payoff Club!!
« Reply #1711 on: July 28, 2018, 02:35:07 PM »
I think I just joined the mortgage free club!!!!  Well, the last lump sum payment won't clear until Thursday, but I just made the call and it's locked in.  I'll believe it when I see the zero, and for now it seems too good to be true.

I wish I had better records, and I wasn't always paying attention to it, but I have several data points over the past five years.  Starting balance was $250K, so average pay down was about $50K per year, but really accelerated over the past year when we had a few little windfalls and we actually started focusing on it.

Nov 2013 - $250,000
Dec, 2014 - $188,000
April 2015 - $148,000
Aug 2016 - $115,000  (2015 and 2016 my wife was ill, and life took us for a roller coaster ride from hell, hence the slowedown)
April, 2018 - $48,000
July, 2018 - $20,000
Aug 2, 2018 - ZERO!

Now, next challenge is to immediately reallocate the mortgage payment amounts into investments.

This is such a strange feeling....


Trifele

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Re: Mortgage Payoff Club!!
« Reply #1712 on: July 28, 2018, 03:36:56 PM »
I think I just joined the mortgage free club!!!! 
...
This is such a strange feeling....

Congrats @red_pill!  Good for you!! 

frizzywhiskers

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Re: Mortgage Payoff Club!!
« Reply #1713 on: July 29, 2018, 08:58:21 AM »
I think I just joined the mortgage free club!!!!  Well, the last lump sum payment won't clear until Thursday, but I just made the call and it's locked in.  I'll believe it when I see the zero, and for now it seems too good to be true.

I wish I had better records, and I wasn't always paying attention to it, but I have several data points over the past five years.  Starting balance was $250K, so average pay down was about $50K per year, but really accelerated over the past year when we had a few little windfalls and we actually started focusing on it.

Nov 2013 - $250,000
Dec, 2014 - $188,000
April 2015 - $148,000
Aug 2016 - $115,000  (2015 and 2016 my wife was ill, and life took us for a roller coaster ride from hell, hence the slowedown)
April, 2018 - $48,000
July, 2018 - $20,000
Aug 2, 2018 - ZERO!

Now, next challenge is to immediately reallocate the mortgage payment amounts into investments.

This is such a strange feeling....

Congratulations!  That's awesome!

birdman2003

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Re: Mortgage Payoff Club!!
« Reply #1714 on: July 30, 2018, 07:10:13 AM »
$10k to the principal, balance now under $80k!

ender

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Re: Mortgage Payoff Club!!
« Reply #1715 on: July 30, 2018, 07:59:04 AM »
$10k to the principal, balance now under $80k!

Niiiiiice. :D

frizzywhiskers

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Re: Mortgage Payoff Club!!
« Reply #1716 on: August 02, 2018, 02:57:00 PM »
5 years and $435,000 later . . . the mortgage is finally gone.
It's done ... it's over….terminated, mutiliated, mission accomplished!
It feels amazing and unreal all at the same time.
Our savings rate is about to triple…..we are 2 years from FI…..
shit is about to get real...

Bird In Hand

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Re: Mortgage Payoff Club!!
« Reply #1717 on: August 02, 2018, 03:38:10 PM »
5 years and $435,000 later . . . the mortgage is finally gone.
It's done ... it's over….terminated, mutiliated, mission accomplished!
It feels amazing and unreal all at the same time.
Our savings rate is about to triple…..we are 2 years from FI…..
shit is about to get real...

Wow.  An average of $87k/yr toward your mortgage -- that is a seriously impressive payoff rate.  Congrats on your accomplishment, and may you attack the rest of your financial goals with equal verve!

Trifele

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Re: Mortgage Payoff Club!!
« Reply #1718 on: August 02, 2018, 07:23:54 PM »
5 years and $435,000 later . . . the mortgage is finally gone.
It's done ... it's over….terminated, mutiliated, mission accomplished!
It feels amazing and unreal all at the same time.
Our savings rate is about to triple…..we are 2 years from FI…..
shit is about to get real...

Wow!  Congrats @frizzywhiskers !

talltexan

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Re: Mortgage Payoff Club!!
« Reply #1719 on: August 03, 2018, 08:44:12 AM »
Frizzywhiskers-
congratulations on knocking on a gigantic mortgage. I would argue that principal paid to the mortgage would already count as savings. But this difference of opinion is so minor that it should not take away from me acknowledging you as a Bad-ass!

Bird In Hand

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Re: Mortgage Payoff Club!!
« Reply #1720 on: August 03, 2018, 09:44:31 AM »
I would argue that principal paid to the mortgage would already count as savings.

Indeed!  I often include principal payments (whether part of P&I or additional) when assessing our yearly savings.  We are relatively late in our mortgage schedule, so the principal payments are rather large and make our savings rate look a lot more impressive.  :D

indentured4now

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Re: Mortgage Payoff Club!!
« Reply #1721 on: August 08, 2018, 06:01:13 PM »
5 years and $435,000 later . . . the mortgage is finally gone.
It's done ... it's over….terminated, mutiliated, mission accomplished!
It feels amazing and unreal all at the same time.
Our savings rate is about to triple…..we are 2 years from FI…..
shit is about to get real...

Oh, just Hell yeah to this!!    Frizzy-on-FI-yah!

frizzywhiskers

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Re: Mortgage Payoff Club!!
« Reply #1722 on: August 08, 2018, 06:47:45 PM »
Thanks everyone - it is pretty exciting to have it done!  I'll be here to cheer on the next group of graduates!

JustInStarting

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Re: Mortgage Payoff Club!!
« Reply #1723 on: August 08, 2018, 08:32:54 PM »
5 years and $435,000 later . . . the mortgage is finally gone.
It's done ... it's over….terminated, mutiliated, mission accomplished!
It feels amazing and unreal all at the same time.
Our savings rate is about to triple…..we are 2 years from FI…..
shit is about to get real...

Congratulations frizzywhiskers! That's a huge accomplishment.

K-ice

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Re: Mortgage Payoff Club!!
« Reply #1724 on: August 09, 2018, 01:32:02 PM »
My SO just put a large enough payment to cut our mortgage (HELOC) in HALF. I'm supposed to match them.

But ... I'm not completely convinced in a super fast payoff as it is on a rental property and we can deduct the interest. 

Also, our tax advantaged investments are not maxed. (TFSA & RRSP)

My SO agreed I can invest the money in our joint account, then we will split it into our tax advantaged accounts. So the pressure is on. (pressure in a fun rivalry sense)   I don't have all the cash on hand, but I have about 60% and should be caught up by Christmas.






 




ender

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Re: Mortgage Payoff Club!!
« Reply #1725 on: August 10, 2018, 07:26:11 AM »
We started our mortgage payoff savings account recently. :)

MaybeBabyMustache

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Re: Mortgage Payoff Club!!
« Reply #1726 on: August 16, 2018, 10:23:40 AM »
We have a vacation house & I'm actively trying to pay off the mortgage. Starting balance was $330K, and we're down to $217K. I'm super excited to get below $200K, and am trying to hit that in 2018. I only use extra funding (e.g. money that was unexpected, side hustle, random rebates/checks, etc) for this, so it will be tricky. But, I'm doing it! It would be great to free up the $1K or month a so of mortgage payments as we get closer to FIRE

I decided to put a month of stock vests into the mortgage, and now have it down below $200K. We are at $199K! Woohoo. I'm excited to think about how quickly we can pay this down, now that we crossed below the $200K mark.