Author Topic: Mortgage Payoff Club!!  (Read 257499 times)

h2ogal

  • Stubble
  • **
  • Posts: 224
  • Location: FingerLakes
Re: Mortgage Payoff Club!!
« Reply #300 on: January 06, 2015, 08:06:35 PM »
We paid off our mortgage recently. I agree that it may not be the highest returning investment, but for us the feeling of security and freedom was worth it. 

We would not feel comfortable 'retiring' with an outstanding mortgage.

Maybe you can consider it as a sort of diversification.....if the stock market goes way down, at least you have very low expenses!


wauske

  • 5 O'Clock Shadow
  • *
  • Posts: 97
  • Location: Netherlands
Re: Mortgage Payoff Club!!
« Reply #301 on: January 07, 2015, 12:29:41 PM »
New balance: PAID IN FULL

Sorry guys we are out of the club lol...

Thanks for all the encouragement; it feels great to be done.

Good luck to everyone in the club, every little counts

Wow, that's some awesome progress and a killer ending too! Don't be a stranger though, alumni are always welcome ;)

Also did 6K on mine, 46.8K to go...
Everything I say is my personal opinion which is based on my subjective experience.

steveo

  • Handlebar Stache
  • *****
  • Posts: 1386
Re: Mortgage Payoff Club!!
« Reply #302 on: January 07, 2015, 01:11:04 PM »
We owe about 165k on the house at this point. The goal is to get it down to 100k this year and then pay it off within the following 2 years. Its the first step for us on our path to FI.

Still it feels so long to go.

I have just under 100k owing at this point. I'd like to pay it off by the end of next year.

We owe a little over 80k right now. I'd love to pay it off this year and its possible however we might not get there 100% spot on. If not it doesn't really matter because it will be done soon after that.

asauer

  • Bristles
  • ***
  • Posts: 414
  • Location: North Carolina
Re: Mortgage Payoff Club!!
« Reply #303 on: January 15, 2015, 12:32:51 PM »
In 2014 we paid down 70K on the mortgage.  Only 154K to go!  Hoping to pay off 80K in 2015- it's a big stretch but doable.

allsummerlong

  • Pencil Stache
  • ****
  • Posts: 574
  • Age: 38
  • Location: British Columbia, Canada
Re: Mortgage Payoff Club!!
« Reply #304 on: January 15, 2015, 01:20:28 PM »
Down to $139k (!!!)

Goal for 2015 is to have it down to $105k by year's end. I feel we can do this, while still stashing in other accounts as well. Like to keep it balanced.

Nora

  • Stubble
  • **
  • Posts: 165
Re: Mortgage Payoff Club!!
« Reply #305 on: January 16, 2015, 03:42:15 AM »
I am in. Intending to pay it all off in four years or less. This one is a big $600000 and 5.2% interest.

Down to 481544! Doing much better than I expected! So exciting.
Down to 354502. But interest rate is up to 6.25%!

Neustache

  • Handlebar Stache
  • *****
  • Posts: 1072
Re: Mortgage Payoff Club!!
« Reply #306 on: January 17, 2015, 08:04:21 AM »

Starting Mortgage:  123K
Current Balance: 122K



Just made my first extra payment of $1300...new mortgage balance is $119,800.00

Ahem....back on topic.

Made my August extra payment...new balance is........ $117,719.00   Woot!  Sent $1900 to the mortgage, plus Augusts regular payment.  Goal is to hit 80% LTV by my birthday in January. We shall see.


Okay, so not going to hit my original goal - had to pay cash for a roof replacement for our rental, plus my husband took up hunting ($$$) hopefully we can really be serious about this going forward.  And my hubby owes me..oh...like 10 deer before he can give up his new hobby. 

Current principal:  $113,199.00

Not terrible for having to shell out almost six grand in unplanned expenses.  My revised goal is to get this down to 80% by my next birthday, Jan 2016.  We have to pay for some foundation repairs to our current house, also, that's why I'm almost a year off of my original goal.

indentured4now

  • Stubble
  • **
  • Posts: 222
Re: Mortgage Payoff Club!!
« Reply #307 on: January 20, 2015, 08:30:10 PM »

[/quote]
Down to 354502. But interest rate is up to 6.25%!
[/quote]

That's fantastic progress over 18 months!   I didn't look back to 2013 for the backstory on your goal and situation so forgive my asking, but surely you can refi now to below 3% or so on another ARM with less than a 1 year payback?  Just not sure if the rate of paydown is going to be sustainable and with another 2 years in the plan or so, it could put 4-digit $ into your account if not 10digit $.

asauer

  • Bristles
  • ***
  • Posts: 414
  • Location: North Carolina
Re: Mortgage Payoff Club!!
« Reply #308 on: January 21, 2015, 07:11:59 AM »
We had a great 2014 with paying down the mortgage.  We went from 225k down to 155K.  We're hoping to get to get it down to 90k in 2015!

jordanread

  • Walrus Stache
  • *******
  • Posts: 5630
  • Age: 32
  • Location: Colorado Springs
  • Live Long, Live Free, Drop Dead
    • Frugal FIRE Show
Re: Mortgage Payoff Club!!
« Reply #309 on: January 23, 2015, 09:39:09 AM »
I guess I'm not asking an impartial audience, but curious if you guys could look at this as a mini case study.  I'm on the fence about whether to just attack the mortgage or not.

Info:
Personal: 25M, married
Take home pay: ~112k (about 40% comes quarterly)
Current Net worth (excluding home): ~215k
Purchase price, 8/2013: $275,000
Current mortgage rate: 3.5% @ 15 years (from March 2014, we refinanced already from 4.875)
Current balance: $196,000
Current home value: $280,000*
Monthly payment: $1960 (includes insurance, property tax and interest)

We currently round the monthly payment up to $2,000, so call our required payments $24,000 per year.  We have an additional $50,000 or so each year (hopefully increasing but you never know) to throw at this.  By my estimation we could pay it off by early to mid 2018.

Pros:
*Wife wants to do it.  Would love to be debt free (this is the only thing we owe)
*From the "heart" perspective I guess I would like it too.  I don't like the idea of being 40 with a mortgage, so I guess the logical extension is I don't like the idea of a continued one at all
*We will be purchasing the business we work at in 2019 or so.  Having low monthly expenses would reduce stress when making payments on that.  Now we should be making plenty of money at that point but it would be a hedge against a leaner year

Con:
Math

Other info:
We only live 3 miles away from work but wouldn't mind moving.  We love the house but neither of us are emotionally attached to it.  It's just the two of us and it's 2200 sq ft.  I wouldn't mind moving downtown (within walking distance of work) or just to a smaller place with less maintenance. Especially so when we purchase the business.  We will have kids at some point but have no immediate plans.

So what do you say?  Given the information above, would you pay off the mortgage or stay the 15 year course and invest the difference?




*Having a realtor friend giving me an estimate on this as she offered.

Well, Mr. Frugal Toque kind of agrees with the emotional value of paying it off. For me, I'm not paying mine off since it's so small, I have the 'cash' to do it immediately if I needed to, the interest rate is really low, I'm less risk averse, and don't get too emotional.

What I would do in your situation would be to start looking at moving. That would be a huge increase to the 'stache, and you could potentially use the cash from the sale to pay a new place in full. No mortgage, and no big dent in your current net worth. It might be a good compromise. The net worth numbers look good, the monthly costs go down, and you get all of that piece of mind mentioned in the article I linked. If that's not an option just yet, I'd try to sit down with your wife (well...not your wife), and put some numbers on the emotional value of it all. The emotional part of it all does have some non-direct financial impact. There have been some huge changes to people's health and budget just from the lack of slight stress it brings.

A caveat, though: $2000/month does kind of freak me out personally (for anything), especially with my goal of keeping costs low, so emotion might play a bigger role if I was in your situation...and I only make slightly less than you.
Join the cycling challenge!
Get in shape in 2017!
Frugal FIRE - Episode 2

"Mustachians rarely sit back and let things happen to them. Mustachians go out and happen to things."

Camp Mustache Canada - Sold Out Already!!

jordanread

  • Walrus Stache
  • *******
  • Posts: 5630
  • Age: 32
  • Location: Colorado Springs
  • Live Long, Live Free, Drop Dead
    • Frugal FIRE Show
Re: Mortgage Payoff Club!!
« Reply #310 on: January 23, 2015, 10:44:48 AM »

Well, Mr. Frugal Toque kind of agrees with the emotional value of paying it off. For me, I'm not paying mine off since it's so small, I have the 'cash' to do it immediately if I needed to, the interest rate is really low, I'm less risk averse, and don't get too emotional.

What I would do in your situation would be to start looking at moving. That would be a huge increase to the 'stache, and you could potentially use the cash from the sale to pay a new place in full. No mortgage, and no big dent in your current net worth. It might be a good compromise. The net worth numbers look good, the monthly costs go down, and you get all of that piece of mind mentioned in the article I linked. If that's not an option just yet, I'd try to sit down with your wife (well...not your wife), and put some numbers on the emotional value of it all. The emotional part of it all does have some non-direct financial impact. There have been some huge changes to people's health and budget just from the lack of slight stress it brings.

A caveat, though: $2000/month does kind of freak me out personally (for anything), especially with my goal of keeping costs low, so emotion might play a bigger role if I was in your situation...and I only make slightly less than you.

Thanks...I'd be open to moving but don't want to do anything rash.  We have only been in the home for 1.5 years.  Additionally, we got water after the thaw last spring.  I am worried we'd take a hit on the home even though we've mitigated the issue.  I figure going through a thaw with no issues would solve that issue.

Say we get 280 for the house.  After fees and closing costs I'm looking at what...255k?  So basically I walk away with about $60,000.  That's a good chunk of change but not enough to pay in cash for a new place. 

The 2k doesn't freak me out for now.  our monthly income is very stable and we get bonused each quarter.  Outside of our house and giving we spend about 27k per year.  Could definitely cut back but it isn't horrible.  Our base salaries would cover our house and living expenses with 0 changes, should our quarterly bonus go to 0.  That said, if the quarterly bonus is 0 it means the business isn't doing well, and we have bigger problems.  At that point we'd probably move to a new town with better job opportunities and sell the house anyway, eliminating said 2k/month payment.

I keep forgetting not everyone lives in the ghetto like me. Most of the houses around me are 900-1200ft2 and go for $50K-$90K. It sounds like you've thought it through, so I'll go with the last suggestion above (valuing the mortgage beyond purely monetary gain). Did you read the article I linked? I think MFT did a good job of really showing the ancillary benefits of paying off the mortgage. I've yet to sell a property, so I'm not that great at working those numbers out.
Join the cycling challenge!
Get in shape in 2017!
Frugal FIRE - Episode 2

"Mustachians rarely sit back and let things happen to them. Mustachians go out and happen to things."

Camp Mustache Canada - Sold Out Already!!

Lyngi

  • Stubble
  • **
  • Posts: 163
  • Age: 47
  • Location: USA
Re: Mortgage Payoff Club!!
« Reply #311 on: January 24, 2015, 12:28:59 PM »
Emotionally, I'd love to have a paid off house.  Been only reading MMM since September 2014 and have been cutting costs, small baby steps.   I kind of take a middle road, I max my 401K, max out my Roth, and pay $1000 to principal each month.  Set to be paid off in 2018, in time for DD to graduate high school.   

Nora

  • Stubble
  • **
  • Posts: 165
Re: Mortgage Payoff Club!!
« Reply #312 on: January 29, 2015, 05:13:40 AM »

Down to 354502. But interest rate is up to 6.25%!
[/quote]

That's fantastic progress over 18 months!   I didn't look back to 2013 for the backstory on your goal and situation so forgive my asking, but surely you can refi now to below 3% or so on another ARM with less than a 1 year payback?  Just not sure if the rate of paydown is going to be sustainable and with another 2 years in the plan or so, it could put 4-digit $ into your account if not 10digit $.
[/quote]

I would love to refinance but the mortgage is on a property in New Zealand and it seems that rates there are going up :(   We live in Australia but I don't think I can get a mortgage here for an international property. But maybe I will ask..

KBecks2

  • Pencil Stache
  • ****
  • Posts: 652
Re: Mortgage Payoff Club!!
« Reply #313 on: January 29, 2015, 05:49:20 AM »
We made an extra principal payment of $1,536 in January.  Our balance is now $117,899.54. 

I am going to double check our contributions to retirement and kids' college accounts -- we want to save in multiple areas, but our surplus after those things will go to mortgage pay down.  It is slightly pleasing to see us under $120k.   

I am going to look at selling some stuff to make a few extra dollars to throw at the mortgage.

My aggressive goal is to have it done in 5 years, but we can flex a little, it may take longer  If we had gotten a 15 year at the start, our mortgage would be done by now.  But we refinanced a few times and now have 11 years on regular schedule left. 

I think my reasonable target should be a balance of $105,000 at the end of the year.  Stretch goal would be $100,000 at the end of the year.








eyePod

  • Pencil Stache
  • ****
  • Posts: 964
    • Flipping A Dollar
Re: Mortgage Payoff Club!!
« Reply #314 on: January 29, 2015, 06:32:40 AM »
New balance: PAID IN FULL

Sorry guys we are out of the club lol...

Thanks for all the encouragement; it feels great to be done.

Good luck to everyone in the club, every little counts

Woohoo! Congrats!
I blog on items flipped for a profit on eBay:
Flipping A Dollar

I made 6.5k in profits in 2015!

eyePod

  • Pencil Stache
  • ****
  • Posts: 964
    • Flipping A Dollar
Re: Mortgage Payoff Club!!
« Reply #315 on: January 29, 2015, 08:15:03 AM »
We made an extra principal payment of $1,536 in January.  Our balance is now $117,899.54. 

I am going to double check our contributions to retirement and kids' college accounts -- we want to save in multiple areas, but our surplus after those things will go to mortgage pay down.  It is slightly pleasing to see us under $120k.   

I am going to look at selling some stuff to make a few extra dollars to throw at the mortgage.

My aggressive goal is to have it done in 5 years, but we can flex a little, it may take longer  If we had gotten a 15 year at the start, our mortgage would be done by now.  But we refinanced a few times and now have 11 years on regular schedule left. 

I think my reasonable target should be a balance of $105,000 at the end of the year.  Stretch goal would be $100,000 at the end of the year.

We are right along with you (just add 100k to your numbers). We got the house last year and have put 9400 toward principal since June last year. Another ~2k will go in this month since it's a three paycheck month for us.

Definitely feels good. We're currently paying PMI right now, but we'll be out of that soon enough. Would love to be below 80% by the end of the year. Just being below 200k will be a big monument in my mind. Feels like such a dark mark on my net worth. :-/
I blog on items flipped for a profit on eBay:
Flipping A Dollar

I made 6.5k in profits in 2015!

RNwastash

  • 5 O'Clock Shadow
  • *
  • Posts: 82
  • Location: Fresno, CA
Re: Mortgage Payoff Club!!
« Reply #316 on: January 29, 2015, 08:47:51 PM »
Paid extra $400, down to $132,800.  Will keep plugging along.

Bolshevik Artizan

  • Stubble
  • **
  • Posts: 144
Re: Mortgage Payoff Club!!
« Reply #317 on: January 30, 2015, 12:56:29 PM »
Paid mine off in 2007 at 37. As I always say to people starting on that journey, just remember it's only one building block of the entire FI package - no debt is great, but real invested capital is also vital and just as hard to come by. for me, invested capital always came after being debt free, and that's how I did it - but when I look back now, I wish I'd invested outside of my 401(k) schemes etc much earlier, and hung on to the capital instead of using it to pay down the mortgage. We're fine now, but I repeat - going from "mortgage free" to FI is just as much of a journey as going from hair on fire to mortgage free. Just saying... BA

Groovin Old Hippie

  • 5 O'Clock Shadow
  • *
  • Posts: 41
  • Location: SoCal Inland Empire
Re: Mortgage Payoff Club!!
« Reply #318 on: January 31, 2015, 11:10:27 PM »
Medinaj2160 - Whoo hoo!!!  Congratulations on "graduating" from the club!  Such an incredible job.  You are so inspiring to us.  We are just joining today.

Our starting balance January 1, 2015: $26,881
Payoff goal date:  December 2015

It will be super tight for us to reach our goal but we are going to throw every extra penny at this thing.  My husband is 61 and he wants to retire!  We're looking forward to all of the support this group offers  :)

Here's our one month update.  Tracking all purchases has been key this month.  Hope to get the February payment to $2,500.

Paid in January: $2,441.90
Balance February 1, 2015:  $24,439.10
Love to Live - Live to Love!!

wauske

  • 5 O'Clock Shadow
  • *
  • Posts: 97
  • Location: Netherlands
Re: Mortgage Payoff Club!!
« Reply #319 on: February 02, 2015, 01:13:28 PM »
Also did 6K on mine, 46.8K to go...

Alrighty, did another double whammy and totalled the payof to 10k and change. Current remaining balance 42.250, monthly mortgage is now less then what most families pay per month on health insurance... I've got the momentum, now to keep hold of it with steady monthly payments!
Everything I say is my personal opinion which is based on my subjective experience.

serious_pete

  • Stubble
  • **
  • Posts: 143
  • Age: 40
  • Location: Manchester, UK
Re: Mortgage Payoff Club!!
« Reply #320 on: February 03, 2015, 08:22:45 AM »
I'm in! 122,000 left to go on a 128,000 mortgage. Interest rate set at 4.99% So far made a grand total of 1000 overpayments so got quite a way to go. The plan is to overpay by 500 per month to start with and change mortgage deal in December.

Now down to 116,500 and interest rate is now down to 3.09% as of January. Still working on 500 overpay per month. Slow but steady!

As of today mortgage stands at 114, 975.
Red from Shawshank Redemption:

"He had a quiet way about him, a walk and a talk that just wasn't normal around here. He strolled, like a man in a park without a care or a worry in the world, like he had on an invisible coat that would shield him from this place."

My attempt at a journal : http://forum.mrmoneymustache.com/journals/finance-etc-pete's-journal/

gluskap

  • Stubble
  • **
  • Posts: 138
  • Age: 37
  • Location: Los Angeles, CA
    • Money Savvy Mommy
Re: Mortgage Payoff Club!!
« Reply #321 on: February 03, 2015, 12:58:52 PM »
How do people feel about a hybrid strategy?  Refinancing to a 15 year loan to get a low interest so saving on interest payments.  Then just making the minimum payment and saving any extra money in a brokerage account.  Then when the brokerage account has grown enough to payoff the mortgage then selling it in tax efficient lots and paying off the mortgage then.  That way if something happens and say someone lost their job, you would still have some safety as you could sell off some stocks to make your monthly mortgage.  But you also have the higher returns from the brokerage account versus just prepaying the mortgage.  If you can time the mortgage pay off with your retirement date, it serves the extra purpose of lowering your monthly expenses when you retire so you can withdraw less from your retirement accounts and thus be in a lower tax bracket.  It also maximizes your mortgage interest deduction when you are working because you are paying the interest then but when you are retired and have no income, it makes no sense to deduct mortgage interest.  This seems to me the best win win strategy.

asauer

  • Bristles
  • ***
  • Posts: 414
  • Location: North Carolina
Re: Mortgage Payoff Club!!
« Reply #322 on: February 10, 2015, 11:00:30 AM »
Woohoo!  Was able to drop a $5,000 bomb on the mortgage this month!  Down to $150k!

frugalJD

  • 5 O'Clock Shadow
  • *
  • Posts: 28
  • Location: California
Re: Mortgage Payoff Club!!
« Reply #323 on: February 12, 2015, 12:14:20 PM »
Woohoo!  Was able to drop a $5,000 bomb on the mortgage this month!  Down to $150k!

Great job!  We're right behind you at $165k!  I estimate 3.5 years to go for us.  Maybe a few months less.

-JD

The knitter

  • Stubble
  • **
  • Posts: 118
Re: Mortgage Payoff Club!!
« Reply #324 on: February 14, 2015, 07:11:43 AM »
We're going to make 2015 the year we pay down enough to get rid of PMI and refinance to a 15 year loan.

Just threw an extra 1,000 payment toward the principal.

Once that payment registers we'll owe $197,027.50.

I'm in this challenge for the next 11 months. After that, we plan to divert the extra into investments, including possibly a second rental property. (The first is our two-family home, where we live and rent out one unit.)



Neustache

  • Handlebar Stache
  • *****
  • Posts: 1072
Re: Mortgage Payoff Club!!
« Reply #325 on: February 17, 2015, 05:17:59 PM »
That's great, IowaStache!  I accidentally sold my car and rented my house that way (not intending to, but people wanted what I had!)


FunkyStickman

  • Bristles
  • ***
  • Posts: 492
  • Age: 43
  • Location: Louisiana
    • I Follow The Architect
Re: Mortgage Payoff Club!!
« Reply #326 on: February 18, 2015, 01:31:04 PM »
I went back in and re-did the math on my mortgage, and if I put all my tax returns AND extra payments, I'll be done around 5 years from now, or sooner. Previously, I had estimated around 7, but was way off.

I told my wife that, and her jaw hit the floor.

Here's to financial freedom!
Currently at $62,600 and dropping rapidly.
"There is no dignity quite so impressive, and no one independence quite so important, as living within your means." -Calvin Coolidge

"Civilization is the limitless multiplication of unnecessary necessities." - Mark Twain

indentured4now

  • Stubble
  • **
  • Posts: 222
Re: Mortgage Payoff Club!!
« Reply #327 on: February 18, 2015, 05:54:26 PM »
Mrs. Indentured and I have the goal of payoff in 5 years on a $249k mortgage without gutting our current stash. 

Working the plan, enjoying selling and clearing some clutter and putting other investment dividends towards the beast.  The March payment will get it to $245,500.  That's more than $3K farther along than we would have been.  Under $210K by year-end or bust!

aj_yooper

  • Handlebar Stache
  • *****
  • Posts: 1092
  • Age: 6
  • Location: Chicagoland
Re: Mortgage Payoff Club!!
« Reply #328 on: February 19, 2015, 07:56:28 AM »
I went back in and re-did the math on my mortgage, and if I put all my tax returns AND extra payments, I'll be done around 5 years from now, or sooner. Previously, I had estimated around 7, but was way off.

I told my wife that, and her jaw hit the floor.

Here's to financial freedom!
Currently at $62,600 and dropping rapidly.

Good on the pay down!  Your tax return refund means you are losing the mortgage interest rate on that money for about half a year.  I would take a look at withholding amounts and work to get to $0 tax refunds.
The constant lesson of history is the dominant role played by surprise. Just when we are most comfortable with an environment and come to believe we finally understand it, the ground shifts under our feet.  Peter Bernstein

''It's not so much what folks don't know that causes problems, it's what they do know that ain't so.''   Artemus Ward

hdatontodo

  • Stubble
  • **
  • Posts: 230
  • Location: Balto Co, MD
Re: Mortgage Payoff Club!!
« Reply #329 on: February 19, 2015, 11:37:42 AM »
We got the mortgage down from 166K to 99K in 2014.  I sent extra this Feb; we are down to $84K.

I sold some items (several $K) and I should get my annual bonus on Feb 27, maybe $5K), so in March I should be able to send in another $10K.

Unfortunately the Mrs is having neck surgery and will be out of work for months, and her place doesn't pay disability until after 30 days.

If everything goes perfectly this year, maybe with the extra monthly principal, we'll have it down to around $30K.

There are a couple of wild cards like layoffs and such. Off to a good start nonetheless.

MarciaB

  • Bristles
  • ***
  • Posts: 301
  • Age: 55
  • Location: Oregon
Re: Mortgage Payoff Club!!
« Reply #330 on: February 19, 2015, 05:46:49 PM »
I'm in the club and will be done this year (October, or maybe a month or two sooner). Woot!

My situation is a little different though because my house sits on 44 acres of property (with an income producing vineyard) and no one will touch the mortgage with a refi. Meaning I'm stuck with the 5.75% rate...and am throwing cash at it madly. There wasn't a question for me about paying it down vs. investing because at that rate it just seemed the most prudent thing to do.

I'll end up paying this big 30-year bastard off in 8-1/2. I feel like Super Woman.

aj_yooper

  • Handlebar Stache
  • *****
  • Posts: 1092
  • Age: 6
  • Location: Chicagoland
Re: Mortgage Payoff Club!!
« Reply #331 on: February 19, 2015, 08:26:04 PM »
I'm in the club and will be done this year (October, or maybe a month or two sooner). Woot!

My situation is a little different though because my house sits on 44 acres of property (with an income producing vineyard) and no one will touch the mortgage with a refi. Meaning I'm stuck with the 5.75% rate...and am throwing cash at it madly. There wasn't a question for me about paying it down vs. investing because at that rate it just seemed the most prudent thing to do.

I'll end up paying this big 30-year bastard off in 8-1/2. I feel like Super Woman.

Would you be eligible for a mortgage through a farm agency?
The constant lesson of history is the dominant role played by surprise. Just when we are most comfortable with an environment and come to believe we finally understand it, the ground shifts under our feet.  Peter Bernstein

''It's not so much what folks don't know that causes problems, it's what they do know that ain't so.''   Artemus Ward

MarciaB

  • Bristles
  • ***
  • Posts: 301
  • Age: 55
  • Location: Oregon
Re: Mortgage Payoff Club!!
« Reply #332 on: February 19, 2015, 08:31:20 PM »
I'm in the club and will be done this year (October, or maybe a month or two sooner). Woot!

My situation is a little different though because my house sits on 44 acres of property (with an income producing vineyard) and no one will touch the mortgage with a refi. Meaning I'm stuck with the 5.75% rate...and am throwing cash at it madly. There wasn't a question for me about paying it down vs. investing because at that rate it just seemed the most prudent thing to do.

I'll end up paying this big 30-year bastard off in 8-1/2. I feel like Super Woman.

Would you be eligible for a mortgage through a farm agency?

That's where I've got a mortgage now (NW Farm Credit Services). In this area they're the only ones who deal with acreage and agricultural property. And they wouldn't lower the rate either (I asked maybe once or twice a year...nope). I'm thrilled to just jettison this altogether.

aj_yooper

  • Handlebar Stache
  • *****
  • Posts: 1092
  • Age: 6
  • Location: Chicagoland
Re: Mortgage Payoff Club!!
« Reply #333 on: February 19, 2015, 08:45:07 PM »
Well then, you are making a wise move! and in a very short time to finish it.  Congrats.
The constant lesson of history is the dominant role played by surprise. Just when we are most comfortable with an environment and come to believe we finally understand it, the ground shifts under our feet.  Peter Bernstein

''It's not so much what folks don't know that causes problems, it's what they do know that ain't so.''   Artemus Ward

Rural

  • Magnum Stache
  • ******
  • Posts: 4072
Re: Mortgage Payoff Club!!
« Reply #334 on: February 20, 2015, 06:19:52 AM »
I'm in the club and will be done this year (October, or maybe a month or two sooner). Woot!

My situation is a little different though because my house sits on 44 acres of property (with an income producing vineyard) and no one will touch the mortgage with a refi. Meaning I'm stuck with the 5.75% rate...and am throwing cash at it madly. There wasn't a question for me about paying it down vs. investing because at that rate it just seemed the most prudent thing to do.

I'll end up paying this big 30-year bastard off in 8-1/2. I feel like Super Woman.

Would you be eligible for a mortgage through a farm agency?

That's where I've got a mortgage now (NW Farm Credit Services). In this area they're the only ones who deal with acreage and agricultural property. And they wouldn't lower the rate either (I asked maybe once or twice a year...nope). I'm thrilled to just jettison this altogether.


We did something very similar; you got a good rate on a farm loan at 5.75%.


Ours was was 7.5%, so we took out a 15 year loan and paid it off in four. :-)


Good for you!

FunkyStickman

  • Bristles
  • ***
  • Posts: 492
  • Age: 43
  • Location: Louisiana
    • I Follow The Architect
Re: Mortgage Payoff Club!!
« Reply #335 on: February 27, 2015, 08:42:46 AM »
Just dropped my tax return on principal, now we're down under $60K.
"There is no dignity quite so impressive, and no one independence quite so important, as living within your means." -Calvin Coolidge

"Civilization is the limitless multiplication of unnecessary necessities." - Mark Twain

Groovin Old Hippie

  • 5 O'Clock Shadow
  • *
  • Posts: 41
  • Location: SoCal Inland Empire
Re: Mortgage Payoff Club!!
« Reply #336 on: March 02, 2015, 10:58:05 AM »
Medinaj2160 - Whoo hoo!!!  Congratulations on "graduating" from the club!  Such an incredible job.  You are so inspiring to us.  We are just joining today.

Our starting balance January 1, 2015: $26,881
Payoff goal date:  December 2015

It will be super tight for us to reach our goal but we are going to throw every extra penny at this thing.  My husband is 61 and he wants to retire!  We're looking forward to all of the support this group offers  :)

Here's our one month update.  Tracking all purchases has been key this month.  Hope to get the February payment to $2,500.

Paid in January: $2,441.90
Balance February 1, 2015:  $24,439.10

Well, we didn't get our February payment to $2500.  DH car needed a repair and our dishwasher broke.  But we still made the minimum amount to meet our payoff goal on December 31, 2015

Paid in February: $2200
Balance March 1, 2015:  $22,292.02
Love to Live - Live to Love!!

asauer

  • Bristles
  • ***
  • Posts: 414
  • Location: North Carolina
Re: Mortgage Payoff Club!!
« Reply #337 on: March 11, 2015, 06:37:31 AM »
Another $1,200 extra on the mortgage in Feb.  Less than I wanted, but still...it's something. 

sansimeon

  • 5 O'Clock Shadow
  • *
  • Posts: 3
  • Location: Mid Atlantic
Re: Mortgage Payoff Club!!
« Reply #338 on: March 14, 2015, 08:37:00 PM »
Been following along for some time now.  Really enjoyed all the inspiration. Time to post now...

Feb 2013 Original loan amount = 226k
Mar 2015 Current balance = 167k
Expected payoff = Sep 2019

I remember telling someone close to me about the roughly 6 year plan right after I bought the house.  They did that condescending partial laugh - unspoken meaning:  "That's impossible and naive, but good for you for trying."

dabears847

  • 5 O'Clock Shadow
  • *
  • Posts: 77
  • Location: Chicago
Re: Mortgage Payoff Club!!
« Reply #339 on: April 02, 2015, 07:50:48 PM »
Feel free to punch holes in this worksheet attached. I've been paying down the mortgage for the last five years and our balance is down to $75,000. The worksheet compares investing vs paying down our house and rentals from our perspective three years ago.

Please note I created this today with about two hours of work on the spreadsheet so it is not perfect. 


asauer

  • Bristles
  • ***
  • Posts: 414
  • Location: North Carolina
Re: Mortgage Payoff Club!!
« Reply #340 on: April 03, 2015, 09:03:46 AM »
Yay!  Another $5k on the mortgage this month. 
Original loan amount November 2011= 249,900
April 1 balance= 143,458. 
Best part is that we're on track for a 2016 payoff!

frizzywhiskers

  • 5 O'Clock Shadow
  • *
  • Posts: 49
  • Age: 45
  • Location: Canada
Re: Mortgage Payoff Club!!
« Reply #341 on: April 03, 2015, 11:19:17 AM »
I'm in on this mission, super excited and focused on getting this done as soon as possible.  Both my husband and I are feeling done with the 9 to 5 world.  Been at it for over 20 years and are ready for a new focus.  Being mortgage free will give us the freedom to choose what we want to do with our time.  Going to hang on in the corporate world until this baby is gone!

Purchased a new home in September 2013 for $655,000 (no judging - it's expensive where I live!)

- Starting mortgage = $435,000, 5 year term @ 3.26% (starting Sept. 30, 2013)
- Making weekly payments of $800
- Goal:  Make additional payments averaging $2700 a month = $32,400/yr.
- Realistic Mortgage Free Date:  March 2020
- Long Shot Mortgage Free Date:  September 2018 - the end of our current 5 year term.  Depending on bonuses received over the next few years and staying focused on the budget we actually have a shot at making this happen.

- Current Mortgage:  $407,500

And go.........!

Update on this mortgage payoff madness!

- 3 years 10 months left on term @ 3.26%
- Increased weekly payments to $900
- Revised monthly payment increase goal to $2333 a month = $28,000/yr (reduced due to increase monthly payment)
- Still shooting for Long Shot Mortgage Free Date:  September 2018 - the end of our current 5 year term.  Depending on bonuses received over the next few years and staying focused on the budget we actually have a shot at making this happen.

- Current Mortgage:  $394,537.49

End of the year update:

Mortgage amount as of December 25, 2014:  $380,819.42  Making some great progress!

Goal for 2015 - to break the $300's and get into the 200's!

First quarter update!  Mortgage amount as of April 2, 2015 - $359,144.  On track to see the $200's by the end of the year. :o)

frizzywhiskers

  • 5 O'Clock Shadow
  • *
  • Posts: 49
  • Age: 45
  • Location: Canada
Re: Mortgage Payoff Club!!
« Reply #342 on: April 03, 2015, 11:20:03 AM »
Yay!  Another $5k on the mortgage this month. 
Original loan amount November 2011= 249,900
April 1 balance= 143,458. 
Best part is that we're on track for a 2016 payoff!

Awesome!  You are making some great progress!

hdatontodo

  • Stubble
  • **
  • Posts: 230
  • Location: Balto Co, MD
Re: Mortgage Payoff Club!!
« Reply #343 on: April 03, 2015, 02:13:18 PM »
Still chipping away at ours.

Came into the year at $99K and got it down to $70K. I got the Mrs to pitch in some money and we just mailed off a check for $21K.

We'll keep paying extra each month as planned, but I won't have any more windfalls except the extra check in July and end of Dec.

I'm hoping we'll have the mortgage gone by the end of 2015, but it might end up being Jan or Feb since the calculators didn't take payment used to replenish escrow into account. After today's check clears, I'll run their extra monthly payment calculator and see how it works out.

Heckler

  • Handlebar Stache
  • *****
  • Posts: 1221
Re: Mortgage Payoff Club!!
« Reply #344 on: April 04, 2015, 08:39:08 AM »
1996: bought a brand new house  for $145k in Ontario
2000: sold it for $145k, pulled out $20k equity
2000-2003: rented in Vancouver BC because we knew we shouldn't afford a ridiculously priced place.
2003: bought a 35 year old townhouse in Vancouver BC for $279k and what I thought was a 25 year mortgage.  Scary times! Paid twice as much as our brand new house.
2015: similar units in the same complex selling for $540+.  But we will buy and hold, because we won't afford a house we don't need.  Good times!

Wife increased payments anytime we could afford it, and we pay biweekly.

Low and behold, we are less than a year from being 100% debt free!   Look how our savings rate will increase in a year from now!  We almost cut that baby in half. 
« Last Edit: April 04, 2015, 08:57:56 AM by Heckler »

Heckler

  • Handlebar Stache
  • *****
  • Posts: 1221
Re: Mortgage Payoff Club!!
« Reply #345 on: April 04, 2015, 08:48:17 AM »
This tells me we saved $54,000 in interest by paying off in 13 years instead of 25.  Badass!

Stachesquatch

  • 5 O'Clock Shadow
  • *
  • Posts: 27
  • Location: Austin, TX and Deadhorse, AK
Re: Mortgage Payoff Club!!
« Reply #346 on: April 04, 2015, 06:28:51 PM »
Chapter closed for us!

I've been a long term reader of these forums.  We just paid off our mortgage, it didn't seem real until the letter from the mortgagee came in stating that the loan was closed paid in full.  A couple years ago I envisioned framing this letter when it arrived but now that the time has come it just went in a file with other documents.  It's still listed as a loan in good standing on Credit Karma, but I'm fine with this as long as it shows good standing.  We literally don't have any other debt to show on the credit report other than paid in full every month revolving balances on our credit cards.

Keep up the good work everyone, for me the self set 'milestones' in the mortgage payoff process made the progress seem tangible.  The investment accounts are getting a huge bump every month now, the next goal is FIRE.

dabears847

  • 5 O'Clock Shadow
  • *
  • Posts: 77
  • Location: Chicago
Re: Mortgage Payoff Club!!
« Reply #347 on: April 04, 2015, 07:06:38 PM »
Quote
In 188 months your mortgage would be 0 if you made extra payments of $1,500  per month or it would be $367,000 if you paid $0 extra. 

And after 188 months you would be "saving" about $2000-$3000/month by not having a mortgage payment..plus the extra $1500/month extra you were paying.. Shouldn't that count for something???

No, because the math already takes this into account. If your portfolio was averaging greater than 3.5%, then your portfolio would be so big that you could liquidate a part of it, pay off the mortgage and have a sizable chunk left over. In an early chart I show the net benefit at various investment returns. At 8% you would be ahead by $151,000. If you can earn more than 3.5% then you are better off keeping the mortgage. If you can't earn 3.5%, then your safe withdrawal rate would be 1% or less based on age as you most likely will not be exceeding inflation.

I understand the psychological effect of paying down the mortgage, but mathematically it is a worse answer if you can hit 4% or more in your portfolio.

The government is giving away free money to jump start the economy. This is a once in the lifetime event. Those who pay it down faster are giving back the free money. If the choices are pay down the mortgage or blow your money, then obviously pay down the mortgage. If you are disciplined then invest in Vanguard and statistically you will be ahead.
The Cash Flow is everything as long as the extra cash once the mortgage or rental is paid off is used accordingly. ie. apply the same rate of return on all funds for the 30 years in the 7-11% range.

I'm worried for my own calculations that I'm missing something here but if I pay off my house 10 years early and then apply those extra payments to the Market with normal P&I and extra previous payments, the compounding comes very close to equal to investing the funds.

dabears847

  • 5 O'Clock Shadow
  • *
  • Posts: 77
  • Location: Chicago
Re: Mortgage Payoff Club!!
« Reply #348 on: April 04, 2015, 07:37:09 PM »
Quote
In 188 months your mortgage would be 0 if you made extra payments of $1,500  per month or it would be $367,000 if you paid $0 extra. 

And after 188 months you would be "saving" about $2000-$3000/month by not having a mortgage payment..plus the extra $1500/month extra you were paying.. Shouldn't that count for something???
I agree with this... Take the 189 to 360 payments, extra cash flow and invest the cash to see the net comparable difference.

REAL WORLD EXPAT

  • 5 O'Clock Shadow
  • *
  • Posts: 63
Re: Mortgage Payoff Club!!
« Reply #349 on: April 05, 2015, 07:21:00 AM »
Finding this thread a little late but I'm in, I only have 2 more payments left and it will be paid off in just under 11 years since we bought it. I hear all the arguments against paying it off and investing but I was able to invest too and considered the additional payments as safe returns (eventually), had my E-fund, maxed retirements accounts each year so paying it off made sense to me.

Plus the feeling of owning my home will be great! Still the nearly $10k in taxes are a kicker but once we get to FIRE we'll move.
« Last Edit: April 05, 2015, 07:33:49 AM by RW-Expat »