The Money Mustache Community

General Discussion => Throw Down the Gauntlet => Topic started by: cdub on March 26, 2013, 10:53:47 PM

Title: Mortgage Payoff Club!!
Post by: cdub on March 26, 2013, 10:53:47 PM
I started a quest to pay off my mortgage! I even created a blog to document my journey.

http://mortgage-payoff-club.com/ (http://mortgage-payoff-club.com/)

Who's with me?

Paying off our mortgages would certainly be badass. (I hope you enjoy the blog too)

Title: Re: Mortgage Payoff Club!!
Post by: cdub on March 28, 2013, 10:06:52 AM
I just added a new page to the blog where people can commit to pay off their mortgage early:

http://mortgage-payoff-club.com/2013/03/28/join-the-mortgage-payoff-club/ (http://mortgage-payoff-club.com/2013/03/28/join-the-mortgage-payoff-club/)

I hope you enjoy the site!
Title: Re: Mortgage Payoff Club!!
Post by: Emerald on March 28, 2013, 12:39:26 PM
Thanks, I'll check it out.
Title: Re: Mortgage Payoff Club!!
Post by: makincaid on March 29, 2013, 05:38:56 AM
I wish I could join, but I paid off my mortgage two years ago : )
Title: Re: Mortgage Payoff Club!!
Post by: Mr Mark on March 29, 2013, 09:35:30 PM
Sorry, but unless you have a monstrously large stash, I think this is a poor investment decision. Borrow at 3.5% fixed for 30years. Put the overpayments into the sp500, et al.
Title: Re: Mortgage Payoff Club!!
Post by: tomsang on March 29, 2013, 10:35:31 PM
I believe you are hurting your financial balance sheet. If you said let's refinance and increase our mortgage to the highest level possible because the silly government is giving away free money at 3.5% for 30 years or 2.75% for 15 years I might be excited. If you can't beat 3.5% over 30 years then your safe withdrawal rate would probably be 1% and more tied to your lifespan vs. investment returns.
Title: Re: Mortgage Payoff Club!!
Post by: Dianas Report on March 29, 2013, 11:49:36 PM
mr mark & tomsang, the average return on my overall IRA investment portfolio is around 5%. So after taxes & other misc. fees deducted... the return be close to the 3.5% home loan. So either way it's pretty close. Unless you manage to ideally have a higher investment return rate of 10% then I could see holding on to the loan.

The only minor benefit I can think of to still hold a mortgage is the write off for mortgage interest paid.
Title: Re: Mortgage Payoff Club!!
Post by: tomsang on March 30, 2013, 08:31:23 AM
mr mark & tomsang, the average return on my overall IRA investment portfolio is around 5%. So after taxes & other misc. fees deducted... the return be close to the 3.5% home loan. So either way it's pretty close. Unless you manage to ideally have a higher investment return rate of 10% then I could see holding on to the loan.

The only minor benefit I can think of to still hold a mortgage is the write off for mortgage interest paid.

So you are saying that during one of the worst recessions of all time that you earned 5% on your investment. That is 1.5% better than your return on paying down a 3.5% mortgage. If you do the math you will see that 1.5% additional yield would make a huge difference to your net worth and financial stability over the next 30 years. A 30 or 15 year fixed mortgage is an unbelievable hedge against inflation and is a gift from the government. Look at those from Australia. They are paying 6% for their 10 year fixed. My point is don't get hung up on the Dave Ramsey and other mantras that debt is bad. If you are Mustachian than debt can be safer and more lucrative than assets when the government is pumping up the economy with free money. By the way my portfolio over the past 10 years has averaged 8.2% in plain vanilla Trowe Price funds. So you may want to analyze why you are getting 5%.
Title: Re: Mortgage Payoff Club!!
Post by: Dianas Report on March 31, 2013, 12:05:55 AM
Tomsang, I verified the exact Vanguard Target Retirement 2045 Fund VTIVX 5 year return  is 4.99%.

So you recommend instead of paying off extra money on principle of the home, to invest it instead?

By the way Troweprice expense ratio is 3x the amount Vanguard charges and their 2045 fund performed .10% better. Pretty sure I'm the winner here =0)
Title: Re: Mortgage Payoff Club!!
Post by: tomsang on March 31, 2013, 08:17:31 AM
Tomsang, I verified the exact Vanguard Target Retirement 2045 Fund VTIVX 5 year return  is 4.99%.

So you recommend instead of paying off extra money on principle of the home, to invest it instead?

By the way Troweprice expense ratio is 3x the amount Vanguard charges and their 2045 fund performed .10% better. Pretty sure I'm the winner here =0)

Thank you for proving my point.  In the worst recession ever, paying off your mortgage cost you 1.5%. I also think you should be looking at long term investments not short term, which would show investments earning 8%+as my post indicated.  So you would be losing 4.5% yield which would be a huge blow to your net worth.

I did find it interesting looking at the 10 year returns of the various funds. It looks like the vast majority of the equity investments outperformed a 3.5% mortgage return. If you get a a 15 year mortgage you are looking at needing to beat a 2.75% return.

Again if you can't beat the mortgage rates right now, then most people are significantly in trouble as the Safe Withdrawal Rates would be around 1% and more closely tied to life expectancy.  From reading your other posts you are concerned about inflation. A 30 year mortgage at 3.5% is probably the best hedge for inflation that you can find.

Here is a link to the Vanguard performance by fund.
https://personal.vanguard.com/us/FundsByName
Title: Re: Mortgage Payoff Club!!
Post by: Dianas Report on April 01, 2013, 12:07:35 AM
tomsang, I could see what your saying does seem like valid advice.

Let's say you max out your IRA's & TSP for the year. You have a little over, so you would invest the rest? even though you pay the capital gains tax and not put that into your principle? It just doesn't seem right, since paying off my mortgage early saves me over $200,000 in interest.

According to Washington Post, Capital Gains Tax will increase from 15% to possibly 25%. Not pleasant news to us investors.

Title: Re: Mortgage Payoff Club!!
Post by: tomsang on April 01, 2013, 04:30:26 PM
It just doesn't seem right, since paying off my mortgage early saves me over $200,000 in interest.
According to Washington Post, Capital Gains Tax will increase from 15% to possibly 25%. Not pleasant news to us investors.[/color]

Paying off your mortgage may "Save You $200,000 in mortgage interest", but the bigger issue is how much does it costs you in "Portfolio Gain".

If you have a $600,000 mortgage and pay it off over 30 years at 3.5% mortgage rate, then you will pay approximately $370,000 in interest over the 30 years.  If you choose to make an additional $1,500 per month mortgage payment, then you will cut the 30 year mortgage down to 188 month mortgage and you will pay approximately $178,000 in interest.

So by making an additional $1,500 payment per month, you "save" $192,000 in interest.  Close to your $200,000 savings that you mentioned.

So how does $1,500 per month going to your mortgage cost your portfolio over time?

That depends on what return you have over a 188 month/close to 15.5 year time frame.

Starting with 0, your portfolio would grow to the following at the following yields:

11% = $746,000     
10% = $677,000
 9% = $615,000
 8% = $560,000
 7% = $510,000
 6% = $466,000
 5% = $427,000
 4% = $391,000
3.5% = $367,000

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. 

188 payments of $1,500 = $282,000 of capital

So the taxes would be calculated based on the return - $282,000.  IE 11% = $746,000-$282,000 = $464,000 gain.  25% of the gain = 25% of $464,000 = $116,000 of taxes if you cashed them all in at once.  You would probably manage taxes better.  $746,000 - $116,000 = $630,000.  Subtract off the mortgage that you still have of $367,000 and you have a benefit of $263,000.

After your tax rate of 25%, the results would be as follows:

11% = $263,000
10% = $211,000
 9% = $165,000
 8% = $124,000
 7% = $86,000
 6% = $53,000
 5% = $24,000
 4% = $-3,250
3.5% = -21,250

This is calculated at a very high capital gain rate of 25%, and not managing any taxes.  Just cashing out in 188 months, and many other assumptions that don't make sense.  The biggest one is all the current tax benefits that you get by itemizing your taxes and claiming your home mortgage deduction. 

Using the current 15% tax rate would result in:

11% = $309,000
10% = $251,000
 9% =$198,000
 8%  = $151,000
 7% = $109,000
 6% = $71,000
 5% = $38,000
 4% = $7,650
3.5% = $12,750 

Again with managing your realization of the gains you should be able to bring down taxes even further and again this does not take into the benefits of having the home mortgage deduction on your tax return while you are still paying high tax rates while you are working.

So over a period of 30 years, if you can get anything above 4% you are better off keeping your 3.5% mortgage as long as possible.

I am confident that I can get above 4%, if I can't then I would probably be earning a 0% return after inflation.  If we have that then our Safe Withdrawal Rate would be close to 1% which would cause significant issues to everyone.  A 30 year fixed rate mortgage is a great hedge against inflation.  The Government is giving those who take it free money to jumpstart the economy.  Those who pay it down faster than required are foregoing the government's gift to homeowners.     
Title: Re: Mortgage Payoff Club!!
Post by: Tyler on April 01, 2013, 05:29:51 PM
C'mon guys.  Let's apply some perspective here. 

It doesn't matter if keeping a mortgage and investing the balance can make you more money over the long haul.  Paying off a mortgage, if that's what someone wants to do, is an awesome accomplishment and deserves praise rather than criticism. 

Save the face punches for people who really need them!  I'm borderline on dishing out a few for being so focused on maximizing returns that we neglect to value and recognize tremendous savings accomplishments. 
Title: Re: Mortgage Payoff Club!!
Post by: cdub on April 01, 2013, 10:44:35 PM
Being free from payments is the goal. As far as "The only minor benefit I can think of to still hold a mortgage is the write off for mortgage interest paid." - doesn't make sense to pay $10 to the bank to get $3 back from the government.

I'll just be able to stop paying that $10 to the bank and keep my money.
Title: Re: Mortgage Payoff Club!!
Post by: Dianas Report on April 02, 2013, 12:30:51 AM
tomsang, I enjoy looking through all the calculations. Thank you. You helped me to see that I can certainly win bigger in the long term by investing the difference. "the bigger issue is how much does it costs you in "Portfolio Gain".

Tyler, for me it does matter "if keeping a mortgage and investing the balance can make you more money over the long haul." LOL Save the face punches for people who really need them! I don't think anyone was doing that here =>

Cdub, true, we must all do what is right in our individual cases. I can totally relate to what your saying... it would feel better to rest my head down at night knowing I don't have a Humongous mortgage waiting to be paid off.
Title: Re: Mortgage Payoff Club!!
Post by: LizzyBee on April 12, 2013, 08:55:01 PM
Cdub, congrats on the goal. I am struggling with the choice between investing and paying down the mortgage. I know, as people have stated, that it makes more sense to invest, but there's something really mentally freeing about getting rid of debt.
Title: Re: Mortgage Payoff Club!!
Post by: jrhampt on April 13, 2013, 07:01:51 AM
C'mon guys.  Let's apply some perspective here. 

It doesn't matter if keeping a mortgage and investing the balance can make you more money over the long haul.  Paying off a mortgage, if that's what someone wants to do, is an awesome accomplishment and deserves praise rather than criticism. 

Save the face punches for people who really need them!  I'm borderline on dishing out a few for being so focused on maximizing returns that we neglect to value and recognize tremendous savings accomplishments.

Agreed.  It's a win-win situation, basically.  You can argue between better and best, but it's all good.
Title: Re: Mortgage Payoff Club!!
Post by: Mazzinator on April 15, 2013, 02:13:45 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???
Title: Re: Mortgage Payoff Club!!
Post by: tomsang on April 15, 2013, 10:44:26 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.
Title: Re: Mortgage Payoff Club!!
Post by: tomsang on April 15, 2013, 10:58:38 PM
Being free from payments is the goal. As far as "The only minor benefit I can think of to still hold a mortgage is the write off for mortgage interest paid." - doesn't make sense to pay $10 to the bank to get $3 back from the government.

I'll just be able to stop paying that $10 to the bank and keep my money.

For me, the goal is to become financially independent. How I manage my balance sheet gets me closer or farther away.  With interest rates at all time lows, giving up 7-10% to save 3.5% doesn't make much sense. Again if it helps you from blowing money, then it makes sense to paydown the mortgage. If you can set up a Vanguard account, transfer money into it on a monthly basis, and invest it achieving 3.5% or better you will be in a financially better off position. This will help you achieve financial independence quicker.
Title: Re: Mortgage Payoff Club!!
Post by: expatartist on April 15, 2013, 11:08:27 PM
Very interesting thread! Something we'll consider in a few years when looking at mortgages -- but the world will be a different time/place then, and we won't be in the US.

We've never had a mortgage, just own a small holiday home that we rent out, paid for it in cash ($10,000) and renovations in cash too. It's a work in progress...
Title: Re: Mortgage Payoff Club!!
Post by: chatsc on April 16, 2013, 06:05:41 AM
I like the idea of paying off my mortgage.  I live in Canada, so we cannot claim the interest.  I realize that some people feel that investing is a better plan, but I think the mental aspect of it all is under rated.  I love the idea of owing my properties, free and clear.  Can you imagine....

I am not in a position to start adding significant extra money to my mortgage yet, but in a couple of years, when all the kiddies are in school full days, then it will be on....
Title: Re: Mortgage Payoff Club!!
Post by: tomsang on April 16, 2013, 08:03:28 AM
I like the idea of paying off my mortgage.  I live in Canada, so we cannot claim the interest.  I realize that some people feel that investing is a better plan, but I think the mental aspect of it all is under rated.  I love the idea of owing my properties, free and clear.  Can you imagine....

I am not in a position to start adding significant extra money to my mortgage yet, but in a couple of years, when all the kiddies are in school full days, then it will be on....

In the US you never own your property. You always have to pay real estate taxes. If you don't pay your real estate taxes the government takes away your property. Also in the US, the government is trying to pump up the economy so they are keeping interest rates artificially low. I know this is not the case in Australia. The math done above does not take into account any benefits of deducting your mortgage interest for tax purposes, so the answer would be the same in Canada or anywhere else that has low interest rates. In fact the math above used artificially high capital gains rates, so it would be a worst case scenario. It would be hard to have capital gains rates this high unless your post retirement income was $150,000++. As I stated upfront, investing or paying off debt is good. I just see a lot of people focusing on debt, when they potentially would be better off investing at these artificially low mortgage rates. A long term mortgage is a great hedge. If you think the future will have inflation, then a long term mortgage is a huge asset. If you think that we are entering a stage of deflation then it is not an asset and owning a home outright would also be a bad answer. You should rent in a deflationary environment. It is in the US government's best interest to create an inflationary environment. How much is the question?
Title: Re: Mortgage Payoff Club!!
Post by: bo_knows on April 16, 2013, 08:06:57 AM
We just refinanced (last week) to 30yr @ 3.5%. Funny enough, our "extra" money at the end of each month (minus 401k/IRA/529 contributions) is about $1500, like the examples above.

We've agonized over the numbers and the potential psychological feeling of paying off the mortgage.  Fact is, coming out of this terrible recession is an even bigger long-term buying opportunity for the stock market, even before considering the fact that the stock market historically outperforms that 3.5% rate.   We've been making monthly deposits to our Vanguard brokerage account for the past 2 years, no regrets.
Title: Re: Mortgage Payoff Club!!
Post by: Mazzinator on April 17, 2013, 02:05:20 PM
Quote
Quote from: MrMurphy on April 15, 2013, 02:13:45 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.

Oh, Ok, i get it, because 188months is 15.5 yrs.. So, if you then invested the $3,500 for 14.5yrs after paying it off (total 30yrs) you'd still be ahead of investing $1500 for 30yr.. because that is the argument/misconception is that after it's paid off you'll have $xx extra to invest/catch up.

Is there a time frame, say if you could payit off in 2 yrs or 5yrs vs 15.5.. Would that make a diff?? Or does the interest rate make a diff?

I'm not trying to be an ass, i'm just trying to learn. I don't have a mortgage but big student loans.

Or you can see my situation here:
http://www.mrmoneymustache.com/forum/ask-a-mustachian/should-we-change-sl-repayment-plans/

I'd love any advice!!
Title: Re: Mortgage Payoff Club!!
Post by: AccidentalMiser on April 17, 2013, 03:21:04 PM
Anyone asking themselves whether or not to pay off their $367000 mortgage may be asking themselves the wrong question. 

The first question they should probably ask is "WHY ON EARTH DO I HAVE A $367000 DOLLAR MORTGAGE?"  The follow-up should be "Where can I buy a less expensive house that still meets my needs?"

OK, now that I've gotten that out of my system, I'll simply say that people who want to pay off their mortgages early do so more for psychological reasons than fiscal reasons.

In my case, one of my "Must Do" items before Early Retirement is to have my (small, reasonably priced) home paid for.  That way, if the bear comes and takes all my porridge, I can still live comfortably working whatever job I can find and I don't have to worry about living in my car or moving.
Title: Re: Mortgage Payoff Club!!
Post by: peterpatch on April 17, 2013, 04:07:57 PM
With such a low interest rate I would be very careful about this gauntlet. Mortgages in the US are fixed , tax deductible (from what I understand) and low interest right now. Also in some states you can walk away from the debt and they can only take your home as collateral. Someone also mentioned the inflation hedge which is also important if and when there is a lot of inflation you still only owe the fixed interest rate. Inflation transfers wealth to high debt-to-equity people from low debt-equity people.

If this were high interest credit card, student loan or bank debt I would be all for it due to the higher interest rates and risk involved in trying to invest at higher rates to offset the interest. But in this case I would take a look at some very safe investments to see if you can't find something that would provide higher yield then the mortgage interest.

 

Title: Re: Mortgage Payoff Club!!
Post by: marty998 on April 17, 2013, 05:46:43 PM
With such a low interest rate I would be very careful about this gauntlet. Mortgages in the US are fixed , tax deductible (from what I understand) and low interest right now. Also in some states you can walk away from the debt and they can only take your home as collateral. Someone also mentioned the inflation hedge which is also important if and when there is a lot of inflation you still only owe the fixed interest rate. Inflation transfers wealth to high debt-to-equity people from low debt-equity people.


And there you have it...the causes of the financial mess we are currently in.

1) fixed interest rates*** which don't allow banks to reprice risk when market circumstances change, forcing them to take out trillions of swaps and derivatives to adjust the earnings on their loan books when their variable rate liability interest rates reset. (Note swaps and derivatives are not bad per se, it's the counterparty risk and interconnected nature of the system that is the problem)
2) tax deduction causes a distortion of the market which favours over-leveraging
3) low interest rates also favour over-leveraging
4) the option for borrowers in default to walk away from their obligations.

But I digress.

We have comparatively higher interest rates here, and I for one am comfortable with paying down my mortgage as fast as possible. I own an asset that is going up in value, that will be CGT free on sale, and I get a tax free guaranteed "return" of 5.39% before tax by paying it off.

***The problem I highlighted in (1) is actually far more complicated, and includes such bullshit accounting treatments involving booking revenue up front on 30 yr loans, not adequately pricing for default, securitisation and transfer of risk without appropriate price etc etc etc...oh I could go on forever.
Title: Re: Mortgage Payoff Club!!
Post by: marty998 on April 17, 2013, 05:56:58 PM
Anyone asking themselves whether or not to pay off their $367000 mortgage may be asking themselves the wrong question. 

The first question they should probably ask is "WHY ON EARTH DO I HAVE A $367000 DOLLAR MORTGAGE?"  The follow-up should be "Where can I buy a less expensive house that still meets my needs?"


I actually find that statement quite funny. Mine is not that large, but many residents of the harbour city can only dream of getting their mortgage down to that level :) Horse has bolted here, nobody wants a falling property market just so mortgages become smaller on new purchases.

I think the real problem is many people don't understand that the 30 yr mortgage doesn't have to be 30 yrs. paying 1 or 2 hundred a month more than the min can knock 10 yrs off easy. Simple maths.

Regarding the above arguments on investing instead of paying the mortgage...Yes you could invest the difference and make more but thats the beauty of choice. We're all entitled to make our own.
Title: Re: Mortgage Payoff Club!!
Post by: cdub on July 09, 2013, 09:21:15 AM
New blog post: Just paid for a certified Honda Odyssey in cash for $17k. It is the "limited" edition - limited as it has jack squat. ie - no nav or fancy automatic doors... so we'll GASP have to use our hands. (you mean I actually have to POINT the remote!!?!?)

But it's our first cash car payment EVER which I'm really excited about.

http://mortgage-payoff-club.com/2013/07/08/just-purchased-a-2010-honda-odyssey-in-cash/
Title: Re: Mortgage Payoff Club!!
Post by: Spudd on July 09, 2013, 10:31:52 AM
I like the idea of paying off my mortgage.  I live in Canada, so we cannot claim the interest.  I realize that some people feel that investing is a better plan, but I think the mental aspect of it all is under rated.  I love the idea of owing my properties, free and clear.  Can you imagine....

The other thing about Canada, is there's no 30 year loans like in the US. After 5 years, your term is up and your interest rate will reset, and it could be to a much higher rate.

Personally I am maxing out my registered accounts (TFSA & RRSP) and then throwing whatever is left into the mortgage.
Title: Re: Mortgage Payoff Club!!
Post by: No Name Guy on July 09, 2013, 11:59:01 AM
Unspoken by Tomsang, but what needs to be understood by all, as one consideration of the strategy they (Tomsang) advocates:

The borrow / keep the mortgage and invest carries a risk that simply paying off debt doesn't have - eg counterparty risk. 

http://en.wikipedia.org/wiki/Counterparty_risk#Counterparty_risk

In other words, you HAVE to earn a higher rate of return to just make the risk adjusted returns worth it.  An example of this is holding high yield (HY) debt (e.g. Junk Bonds") versus so called "risk free" US Government Treasuries.  "My 10% HY  beats your paltry 2%".  Well, not really, or its not so simple as simply comparing rates.  You HAVE to earn 10% (or what ever the current HY rate is) to compensate you for the higher counterparty risk - there's a reason junk bonds HAVE to pay so much versus the Treasury, they tend to default a lot more frequently.

Earning 5% (or 8% or 11%) with counterparty risks (e.g. the bond may default, the company may go bankrupt and wipe out equity, the dividend may be cut, Apple's next product can be a turd which kills the stock price, etc) versus 3.5% guaranteed with getting out of debt....well, one has to decide if the extra 1.5% (or what ever the exact number is) is worth that risk of losing part or all of ones investments.  After all, practically every mans asset (bond, equity) is another's liability which they MIGHT default on (hard assets such as real estate or physical commodities that are possessed are notable exceptions, but, obviously, carry their own risks).

The mortgage you're paying to the bank is your liability....but the bank holds it as an asset on their ledger.  See how it works?  The money in your checking or savings account is YOUR asset, but the bank records that as a liability on their books (since they have to hand you cash on demand).

Don't think there are counterparty risks?  Ask those GM bondholders, or Enron shareholders about it, to name 2 obvious examples.  Ask those long term RIMM shareholders about what happens when a former tech leader loses it edge and becomes an also ran.  Ask the depositors in Cypress who were "bailed in" and had their savings (assets to them, liabilities to the banks) confiscated.

I'm not saying either way is right or wrong, but one must understand the risks of various strategies and earn corresponding returns to make the risks worthwhile.  And one simply can't compare rate of return of Strategy A versus Strategy B without also discussing the inherent risks else it's an apples to oranges comparison. 

Risk tolerance is such a personal thing, so understand YOUR risk tolerance.  Understand the risks of your strategy on getting to FI / ER / IW and tailor those risks to your personal tolerance level.
Title: Re: Mortgage Payoff Club!!
Post by: cdub on July 09, 2013, 12:33:04 PM
Personally - even though my mortgage is at 3.99 which is pretty good - completely freeing up the need for the $1,300 or so mortgage payment is the goal for peace of mind.

I'm freelance - there's no guarantee I'll always be making what I'm making now. Reducing as many mandatory monthly expenses as quickly as possible is the best possible way for a stress free future.

Because all of the math examples above seem to rely on the fact that your income is steady - mine is not. Or at least it has the potential to not be.
Title: Re: Mortgage Payoff Club!!
Post by: tomsang on July 09, 2013, 05:08:32 PM
If your income is not steady than you are much safer investing vs paying off your mortgage. If you lose your job you can't just call the bank up and tell them that you lost your job, but no worries as I prepaid for 3 years. They will take your house. Yet if you lose your job and have 3 years of payments saved up you can draw them down to pay down your mortgage. Investments are liquid, 401k is protected by bankruptcy, and if a natural disaster destroys your house you most likely will get debt relief by FEMA or the bank va. a paid off house. If you can't beat a 4% rate of return then your SWR is lower than 4% and most likely close to 1%. Paying off the mortgage is much more risky even though it has an emotional level of comfort. Either way, as long as you understand how this is impacting your FI and the risk that you are taking on it is all good. Unfortunately many people feel that debt is bad at all cost and are willing to pass up the free money the government is throwing at you to jump start the economy.
Title: Re: Mortgage Payoff Club!!
Post by: cdub on July 09, 2013, 08:31:51 PM
If your income is not steady than you are much safer investing vs paying off your mortgage.

I have almost 6 months of living expenses saved up - so this aspect doesn't worry me. I just hate the idea of having debt.... and a mortgage free life will make it very easy to retire early.
Title: Re: Mortgage Payoff Club!!
Post by: ToeInTheWater on July 10, 2013, 04:54:24 AM
getting my mortgage paid off will be a huge step towards our FI, so we're doing it fast.  our 15 yr (july-11 refi) will be paid off by appr Dec 14.  i'll be 54 at that point, we have a pretty decent stache, so will then seriously consider RE. 

and yes, i get the math behind paying down vs investing.  this may be more of an elimination of risk vs potential for rewards decision being decided in favor of risk elimination.

probably won't do it that young (as i said in my "intro" post, i love my job), but not having the mtg will give us the freedom to do so if we choose.

long story, short, we're in with cdub.

b
Title: Re: Mortgage Payoff Club!!
Post by: Coup on July 21, 2013, 03:01:23 PM
There is more to it than simple math. Owning your own home free and clear removes a level of stress from your life that opens up more opportunities in your head. Once we were mortgage free it gave us the courage to start our own business, which was slow to start but slowly grew to be fully supporting us both full-time earning a nice income.

I just don't think that we would have been in the same mental headspace where we could have started our biz and made as good of decisions if we had a mortgage to deal with.


Title: Re: Mortgage Payoff Club!!
Post by: cdub on August 19, 2013, 11:00:54 PM
After doing my most recent extra payment of $539.41 I realize that I've almost shaved a year on my 30 year loan already! Woot woot!

http://mortgage-payoff-club.com/2013/08/19/539-41-extra-paid-to-the-mortgage-this-month/
Title: Re: Mortgage Payoff Club!!
Post by: Oltmanh on August 24, 2013, 08:34:57 PM
I am working to pay off our mortgage this year.  Owe $36k now... Just want to have zero debt.   I appreciate all the math arguments but I want fewer monthly bills.   And I have an MBA Finance so I can say I understand the math ;).  I think there is an argument for simplicity here as well.
Title: Re: Mortgage Payoff Club!!
Post by: Xavier on August 25, 2013, 06:07:04 PM
I'm with you on this brother!
http://www.mrmoneymustache.com/forum/throw-down-the-gauntlet/my-first-challenge-pay-off-my-mortgage-by-june-30-2014/

Let's keep each other motivated on this.

I checked out your other blog on this as well.  Good stuff.
Title: Re: Mortgage Payoff Club!!
Post by: Katnina on August 27, 2013, 01:35:24 PM
Paid mine off 2 yrs ago & the peace of mind was sooooooooo worth it.  Sure, I could have made a higher return being in stocks, but sometimes peace of mind is Roth more than a higher rate of return.  Good luck!
Title: Re: Mortgage Payoff Club!!
Post by: cdub on August 31, 2013, 09:22:58 PM
Paid mine off 2 yrs ago & the peace of mind was sooooooooo worth it.  Sure, I could have made a higher return being in stocks, but sometimes peace of mind is Roth more than a higher rate of return.  Good luck!

Awesome! Yes I hope to pay it off within 10 years or less. Way less once my wife goes back to work - but at my current pay schedule it'll be 10 years. Probably around 5 when she does.
Title: Re: Mortgage Payoff Club!!
Post by: Katnina on September 01, 2013, 11:46:09 AM
excellent!  Very exciting ;).
Title: Re: Mortgage Payoff Club!!
Post by: HumanCalculator on September 01, 2013, 12:44:29 PM
After long debates with my partner in life, we settled on doubling our current weekly mortgage payments. We agreed that we prefer having the peace of mind of owning our house outright. Payment is now 17% interest, 83% capital instead of 35% interests, 65% capital.

Done in 7.5, or 6 if we drop an additional 17k$ per year. But I figure this will only happens if both our RRSP and TFSA are fully invested in.

When I bought the house a year ago, I figured I would have to pay mortgage payments for the next 25 years. No way I decided, I want to be done by 35.
Title: Re: Mortgage Payoff Club!!
Post by: FrugalZony on September 26, 2013, 01:49:43 PM
Just realised I will be done next month!
Pretty much five years after buying the house!
Whew!! What a relief!
Title: Re: Mortgage Payoff Club!!
Post by: medinaj2160 on September 27, 2013, 08:48:57 PM
Peace of mind is priceless...

I will be paying my home as fast as I can.. hopefully 27-25 years early :)
Title: Re: Mortgage Payoff Club!!
Post by: The knitter on October 05, 2013, 07:05:44 AM
Interesting thread.

The DH and I are about to buy our first home (a two-family at $215,000). We locked in a 4 percent interest rate and are hoping to close in a couple weeks.

Everything is going to change financially for us once we move, so we are working up hypothetical numbers and evaluating our goals.

We go back and forth about paying down the mortgage early, or saving up a big down payment for house number two, or investing the extra money into index funds, or a combination of all three.

I'll be sending this thread to him to help feed our discussion on the topic. I'm leaning towards keeping our regular mortgage payments and freeing up the extra money to do something smarter with it. But I can't deny the lure of having my own home paid off entirely.






Title: Re: Mortgage Payoff Club!!
Post by: cdub on October 26, 2013, 10:44:42 AM
New blog post! Extra $1,010.94 paid!

http://mortgage-payoff-club.com/
Title: Re: Mortgage Payoff Club!!
Post by: Pollyanna on October 28, 2013, 07:48:55 AM
cdub, I'm with you, working on $0 balance by YE 2014.  However, I have to confess I am mid-50's and really should not even have a mortgage by now!  We refinanced in 2003 to a 15 year, and I have been paying extra for a while now, and we should be to zero balance by October 2014 barring anything unforeseen that creates an obstacle that can't be managed any other way.  Our goal is to have no payment going into retirement. 
Title: Re: Mortgage Payoff Club!!
Post by: Hatawa on October 31, 2013, 05:25:55 AM
I'm in too. In my country the interest rates are extremely high so no investment can beat it. Mine is a 20 year mortgage but I hope to have it paid off in 6-7 years. Still seems really long :(
Title: Re: Mortgage Payoff Club!!
Post by: nora on October 31, 2013, 07:04:03 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.
Title: Re: Mortgage Payoff Club!!
Post by: cdub on November 05, 2013, 11:03:33 AM
New blog post:

http://mortgage-payoff-club.com/2013/11/05/i-love-ynab-i-adore-chromebooks-heres-how-to-install-ynab-on-a-chromebook/

How to get the awesome budgeting app YNAB installed on the awesome low budget and did I say AWESOME and EASY TO USE Chromebook.

This will get ANY windows app working on a Chrombeook btw - it allows you to run Linux at the same time as Chrome OS and uses WINE to run Windows apps. :)
Title: Re: Mortgage Payoff Club!!
Post by: jrhampt on November 05, 2013, 11:19:44 AM
I'm in, too.  We've been paying extra for a while, but started doubling our payments on our 15-year mortgage this summer.  At current payment levels, our payoff date is in 4 years.  I think we can improve on that, though, if we choose.
Title: Re: Mortgage Payoff Club!!
Post by: cdub on November 05, 2013, 01:59:34 PM
I'm in, too.  We've been paying extra for a while, but started doubling our payments on our 15-year mortgage this summer.  At current payment levels, our payoff date is in 4 years.  I think we can improve on that, though, if we choose.

Nice! - At our current rate we should be done in 11 years but once my wife goes back to work we should be able to get that down to 4 as well.
Title: Re: Mortgage Payoff Club!!
Post by: OOBER on November 09, 2013, 06:35:42 AM
Good job OP, every bit helps.

I'm in.

We bought our house ~3 years ago, and bought about 1/2 the home that we could have "afforded" according to the bank. With two incomes and no kids (yet), we currently stand at 75% paid off and hope to be fully paid off in the next 12-24 months. My original goal starting out was <5 years, and it looks like we will beat it.

I have personal issues with investing in things that I am unable to control (at least somewhat) and hate owing people/businesses money. My aim is the KISS method. The less time I have to spend dealing with things that could just be "done" the more I can get done otherwise.

I plan to have my own small business going sometime soon and there is something to be said for not having a house payment. It is relatively easy to come up with just property taxes/insurance/utilities/groceries month to month especially with the Mustacian lifestyle.


*Don't get me wrong, I still have a 401K like everybody else which will be maxed out as soon as the house is paid off. But, I don't lose any sleep at night over the extra couple non-guaranteed % return that I am losing by not having it all in the market.
Title: Re: Mortgage Payoff Club!!
Post by: Moomingirl on November 09, 2013, 08:18:03 PM
I'm in too!

We have been working hard to pay off the mortgage, and any spare money has gone to this. We are on a fixed rate of 4.95% (living in New Zealand), and can only make one extra payment on the mortgage per year. Last year was $30,000, this year $25,000. We're only at the beginning of our mortgage year too.  :)

Next year the mortgage comes off the fixed rate, and interest rates are going up here now. The best fixed rates I have seen recently have been 5.65%. I think the banks only let you fix if you have a minimum of $200,000 and we are now down to $165,000. I can't make any more paydowns now, so I will be saving hard for the next year, then paying off as much as we can as soon as the fixed rate comes off.

Title: Re: Mortgage Payoff Club!!
Post by: Alfred J Quack on December 05, 2013, 06:54:36 AM
Nice topic! I'm in as well :)

Starting mortgage: 28-years 120k
Current mortgage: 26-years left 90k
Interest rate: 4% (3 years fixed left)

Total reduction per month: 1k

This does not seem like much but literally half my net income is used to reduce it ASAP :D

Additionaly, if I were to invest the same amount my sweet little government would claim 1.2% as taxable returns so the stock market would have to generate at least 5.2% to keep up. As this is unlikely we chose to remove our mortgage ASAP.
Title: Re: Mortgage Payoff Club!!
Post by: shusherstache on December 05, 2013, 08:08:01 AM
I'm in.

Starting mortgage: 180,000 30-year @ 5.0% fixed 02/2011
Refinanced: 167,000 15-year @3.25% fixed 03/2012
Currently: 62,850 12/2013
Payoff date goal: March 2015

Curent house value: 270,000

My husband and I want to pay it off so we can pursue our other goals: adoption and new careers outside of our current sector (tech). Before we met, we both experienced extreme job loss in our families which severely impacted family structures and so don't want that mortgage payment hanging over our heads.
Title: Re: Mortgage Payoff Club!!
Post by: cdub on December 05, 2013, 10:21:13 AM
I'm in.

Starting mortgage: 180,000 30-year @ 5.0% fixed 02/2011
Refinanced: 167,000 15-year @3.25% fixed 03/2012
Currently: 62,850 12/2013
Payoff date goal: March 2015

Curent house value: 270,000

My husband and I want to pay it off so we can pursue our other goals: adoption and new careers outside of our current sector (tech). Before we met, we both experienced extreme job loss in our families which severely impacted family structures and so don't want that mortgage payment hanging over our heads.

Wow - almost 100k paid off already in 21 months. That's great! That's almost $5k a month you've been throwing at it Awesome!
Title: Re: Mortgage Payoff Club!!
Post by: jrhampt on December 05, 2013, 11:22:53 AM
I'm in.

Starting mortgage: 180,000 30-year @ 5.0% fixed 02/2011
Refinanced: 167,000 15-year @3.25% fixed 03/2012
Currently: 62,850 12/2013
Payoff date goal: March 2015

Curent house value: 270,000

My husband and I want to pay it off so we can pursue our other goals: adoption and new careers outside of our current sector (tech). Before we met, we both experienced extreme job loss in our families which severely impacted family structures and so don't want that mortgage payment hanging over our heads.

Great job so far!  We're at $178k currently with a similar home value and hoping for March 2016 as a payoff date, so a year behind you.  Trying to get down to $100k by this time next year.  Our reasons for paying off the mortgage early are similar to yours.
Title: Re: Mortgage Payoff Club!!
Post by: shusherstache on December 05, 2013, 12:26:32 PM
I'm in.

Starting mortgage: 180,000 30-year @ 5.0% fixed 02/2011
Refinanced: 167,000 15-year @3.25% fixed 03/2012
Currently: 62,850 12/2013
Payoff date goal: March 2015

Curent house value: 270,000

My husband and I want to pay it off so we can pursue our other goals: adoption and new careers outside of our current sector (tech). Before we met, we both experienced extreme job loss in our families which severely impacted family structures and so don't want that mortgage payment hanging over our heads.

Wow - almost 100k paid off already in 21 months. That's great! That's almost $5k a month you've been throwing at it Awesome!

Thanks!  We had a couple of one-off windfalls to throw at it outside of our salaries.  We average 4K a month plus bonuses, etc. toward it and are trying to keep up the momentum.
Title: Re: Mortgage Payoff Club!!
Post by: Strawberrykiwi75 on December 08, 2013, 02:54:44 AM
I'm in too!

We have been working hard to pay off the mortgage, and any spare money has gone to this. We are on a fixed rate of 4.95% (living in New Zealand), and can only make one extra payment on the mortgage per year. Last year was $30,000, this year $25,000. We're only at the beginning of our mortgage year too.  :)

Next year the mortgage comes off the fixed rate, and interest rates are going up here now. The best fixed rates I have seen recently have been 5.65%. I think the banks only let you fix if you have a minimum of $200,000 and we are now down to $165,000. I can't make any more paydowns now, so I will be saving hard for the next year, then paying off as much as we can as soon as the fixed rate comes off.

What makes you think you can't fix it? I would check on that, the bank I work at certainly doesn't! I've done top-up fixed loans for 10k. With interest rates hiking up, it would be worthwhile fixing. And also check about re-documenting it if you want to still have some floating, and they can split it into 2 or more loans, so that you can spread your risk. Also if you have equity of 40% or more I'd ask for a discount- you'll more than likely get it at the moment!
Title: Re: Mortgage Payoff Club!!
Post by: Alfred J Quack on December 08, 2013, 08:54:19 AM
@Moomingirl:
It might also be interesting to see what the variable rates are like? Depening on that you might pocket the interest difference between your current fixed rate and the variable rate and use it as extra payment for the next run!
Title: Re: Mortgage Payoff Club!!
Post by: Moomingirl on December 10, 2013, 12:21:58 AM
Thanks Strawberrykiwi. Which bank do you work for (if you don't want to post in public you could message me...)?
I am pretty sure that when we fixed our mortgage with ANZ just over a year ago, that is what were told. Maybe I misunderstood.  I will of course be checking that out when we come off the fixed rate in October next year.

@ wauske - I will see what happens next October, hopefully we will have so much saved ready for the next paydown, that the rates won't make too much difference.  :)
Title: Re: Mortgage Payoff Club!!
Post by: Maltipoomoney on December 10, 2013, 11:41:06 AM

We are in also!

Why? To decrease our monthly expenses after FIRE in 4 years. Then I will just work a little here and there to pay for college for the kids and take long 2-3 month breaks in between gigs. Yay!! So I want low monthly carrying costs.  My property tax in the midwest is pretty low.

Once I pad my Emergency Fund, I am throwing all $$ at the mortgage for 2 years and will be done, projected date to Payoff Mortgage is 6/2016. Likely it will be earlier.

Then amass larger amounts of cash to either (1) invest in stocks some more (2) buy rental properties for cash.


Title: Re: Mortgage Payoff Club!!
Post by: medinaj2160 on December 11, 2013, 04:42:23 PM
We are in as well :)

Me 28 and my wife 29 purchased our first and last home June 2012.

Value of our home according to Zillow 180K. We only paid 126K since it was a foreclosure and have a 30 year mortgage at 3.75%.
 
As of today we own $64,385.

Payoff goal: March 2015

My reason for paying the house fast is peace of mind because you never know what the future will hold.
Title: Re: Mortgage Payoff Club!!
Post by: secondcor521 on December 11, 2013, 06:41:49 PM
I'm vacillating.

I have roughly $48K left on my mortgage and would like to have it paid off by my 45th birthday, which is in May 2014.  That's a pretty aggressive payoff rate, and I don't know if I'll make it or not.  We'll see.
Title: Re: Mortgage Payoff Club!!
Post by: Charlotte on December 12, 2013, 04:46:52 AM
I have a similar dilemma Secondcor -- I would like to be debt free by my husband's 45th birthday (April 2014), but that is a fair amount of money to come up with in 5 months. (although not 48k....)

How about we both make a run for it and see what happens? I will definitely make it before he turns 46, so he will be able to say "I am 45 years old and debt free!"
Title: Re: Mortgage Payoff Club!!
Post by: cdub on December 12, 2013, 08:02:18 AM
New post:

http://mortgage-payoff-club.com/2013/12/12/just-bought-a-shiny-new-ppo-health-care-plan-from-the-ca-health-exchange-for-870/

And only was able to pay $800 extra in November. :( December should be half that. Both due to holidays. It should pick up steam in the new year.
Title: Re: Mortgage Payoff Club!!
Post by: secondcor521 on December 12, 2013, 05:42:22 PM
I have a similar dilemma Secondcor -- I would like to be debt free by my husband's 45th birthday (April 2014), but that is a fair amount of money to come up with in 5 months. (although not 48k....)

How about we both make a run for it and see what happens? I will definitely make it before he turns 46, so he will be able to say "I am 45 years old and debt free!"

Deal.  Although I have an extra month :-)
Title: Re: Mortgage Payoff Club!!
Post by: Charlotte on December 13, 2013, 04:50:18 AM
You do have an extra month, but my debt is only $19,000 --- so I have less far to go!  ;-)
Title: Re: Mortgage Payoff Club!!
Post by: secondcor521 on December 17, 2013, 12:49:50 PM
Scheduled an extra payment today.

Remaining balance:  $47,324.28.
Title: Re: Mortgage Payoff Club!!
Post by: secondcor521 on December 17, 2013, 06:46:06 PM
Figured I can live with a smaller emergency fund.

New balance:  $37,324.28.

Will probably make one more extra payment after Christmas depending on how things go.

Will make an extra payment in February depending on stock options vesting.

Will probably make extra monthly payments each month with extra cash flow.

Will throw the tax refund if any at the mortgage also.

Will make regular monthly payments as well.

Want it gone.
Title: Re: Mortgage Payoff Club!!
Post by: secondcor521 on December 26, 2013, 07:08:00 PM
Made two post-Christmas payments, plus updated Quicken for the regular January payment.

New balance:  $31,071.28.
Title: Re: Mortgage Payoff Club!!
Post by: Empire Business on December 26, 2013, 08:10:03 PM
I haven't been paying mine early.  Nonetheless, I am excited because my balance just went below $30,000.
Title: Re: Mortgage Payoff Club!!
Post by: Alfred J Quack on December 30, 2013, 12:48:24 PM
Made two post-Christmas payments, plus updated Quicken for the regular January payment.

New balance:  $31,071.28.
Sheesh, you make me feel inadequate :D
Current balance: 78k (plus change) which is a reduction of about 23k (about half was emergency fund).

Goal for next year: 16k reduction!
Title: Re: Mortgage Payoff Club!!
Post by: shusherstache on December 30, 2013, 01:08:20 PM
We're on hold until we see if I get laid off in the new year.  (The joys of the tech industry...)  In the meantime, we're saving the money in our allocated mortgage account and paying the regular payment.
Title: Re: Mortgage Payoff Club!!
Post by: basd on December 31, 2013, 01:21:33 AM
I'm in as well, the wife seems to be on board finally as well.. All amounts in euros.

Original mortgage 238.500, 20 year fixed at 5.4%
Remaining 238.500 (we've only paid interest so far)

If we stick to the original schedule we will have paid off only 41.500 after those 20 years. However, I'd like to be mortgage-free by then (I'm 33 now), if not before. It's going to be an interesting challenge, but with our current savings rates I think we should be able to make it.

Bring it on.
Title: Re: Mortgage Payoff Club!!
Post by: mamagoose on December 31, 2013, 09:51:12 AM
We did it! 169,900 @ 3.75% paid in 2.5 years. Had a head start with a 50k down payment and saved about 44k interest by paying off early. We also chose 15 year term. Wooo!
Title: Re: Mortgage Payoff Club!!
Post by: basd on December 31, 2013, 11:26:06 AM
Wow, well done mamagoose, that's some pretty impressive paying off, and a great way to start 2014!
Title: Re: Mortgage Payoff Club!!
Post by: Rural on December 31, 2013, 05:40:55 PM
Congrats!
Title: Re: Mortgage Payoff Club!!
Post by: secondcor521 on January 07, 2014, 08:14:38 PM
Scheduled an extra January payment today.

Passed two little milestones:  If I just make my regular payments, I'll finish paying off my house before I finish all my child support payments.  Also, starting in February I'll be paying less than $100 per month in mortgage interest.

New balance:  $29,374.28

Hopefully will have a little bit to throw at it in early February, and then a larger payment hopefully towards the end of February, plus the regular payment.
Title: Re: Mortgage Payoff Club!!
Post by: FIreDrill on January 08, 2014, 01:32:30 PM
We did it! 169,900 @ 3.75% paid in 2.5 years. Had a head start with a 50k down payment and saved about 44k interest by paying off early. We also chose 15 year term. Wooo!

Awesome! Must feel amazing. :)
Title: Re: Mortgage Payoff Club!!
Post by: medinaj2160 on January 09, 2014, 11:13:37 AM
We are in as well :)

Me 28 and my wife 29 purchased our first and last home June 2012.

Value of our home according to Zillow 180K. We only paid 126K since it was a foreclosure and have a 30 year mortgage at 3.75%.
 
As of today we own $64,385.

Payoff goal: March 2015

My reason for paying the house fast is peace of mind because you never know what the future will hold.

New balance: $59,980

I miss judged my tax withholdings so I am not going to be able to pay as much on my mortgage next month :/
Title: Re: Mortgage Payoff Club!!
Post by: mamagoose on January 09, 2014, 12:25:38 PM
We did it! 169,900 @ 3.75% paid in 2.5 years. Had a head start with a 50k down payment and saved about 44k interest by paying off early. We also chose 15 year term. Wooo!

Awesome! Must feel amazing. :)

Thanks! It sure does, being that much closer to FIRE is great, and it's comforting to know our family will always have a place to live :)
Title: Re: Mortgage Payoff Club!!
Post by: mikaty on January 10, 2014, 07:42:37 AM
This is my goal for 2014

Of all the things I want to face-punch my past self for this is the one I have to live in!!  Our housing market didn't suffer as much but 5 years (and an expensive bathroom remodel) later it's worth exactly what I paid for it.  And trends show the average price of properties like mine declining in my immediate area at the moment.  And for some reason rental returns are really poor for our area.  I don't even want to consider what this has cost me in interest so far ($65k with floating interest that has varied between 13% and 6% - it's on the lower side now so I was paying massive interest on the bigger balance)

It's a small flat and we'll have to upgrade eventually if we want to start a family.  Once we pay off this place we'll start saving so we can make a huge downpayment (savings + sale of the flat) on our next home.

Title: Re: Mortgage Payoff Club!!
Post by: mamagoose on January 10, 2014, 10:57:46 AM
You might be surprised at how little extra space you need for that first little one. We're in a 4/3 (2000 sf) and it feels like a mega mansion with one baby. Reason is the baby sleeps in our room, we hardly ever go in her nursery. No plans to move her into her own room for a while since nursing is easier when you don't go across the house to fetch the baby. My cousin had her son sleep in her room until he was 2.
Title: Re: Mortgage Payoff Club!!
Post by: cdub on January 11, 2014, 04:22:51 PM
New blog post:

http://mortgage-payoff-club.com/2014/01/11/only-599-78-extra-paid-in-december-due-to-holidays-and-no-extra-payment-going-to-be-made-in-january-due-to-family-emergency/

Only just under $600 paid extra in December... and none being able to be made this month due to a family emergency forcing me to take off most or all of January.

But the "good" thing is - thanks to YNAB... this break from work and income isn't stressing me one bit. Not one bit. Amazing. A little bummed that I might have to rebuild my buffer - but that's about it.
Title: Re: Mortgage Payoff Club!!
Post by: Gray Matter on January 12, 2014, 06:22:08 AM
I'm in.

Starting mortgage: 180,000 30-year @ 5.0% fixed 02/2011
Refinanced: 167,000 15-year @3.25% fixed 03/2012
Currently: 62,850 12/2013
Payoff date goal: March 2015

Curent house value: 270,000

My husband and I want to pay it off so we can pursue our other goals: adoption and new careers outside of our current sector (tech). Before we met, we both experienced extreme job loss in our families which severely impacted family structures and so don't want that mortgage payment hanging over our heads.

Just want to say I find your other goals worthy and am rooting for you.  We have an adopted daughter--what a wonderful experience!  I also find it exciting to be thinking of mid-career changes.
Title: Re: Mortgage Payoff Club!!
Post by: iris lily on January 12, 2014, 10:50:07 AM
C'mon guys.  Let's apply some perspective here. 

It doesn't matter if keeping a mortgage and investing the balance can make you more money over the long haul.  Paying off a mortgage, if that's what someone wants to do, is an awesome accomplishment and deserves praise rather than criticism. 

Save the face punches for people who really need them!  I'm borderline on dishing out a few for being so focused on maximizing returns that we neglect to value and recognize tremendous savings accomplishments.

Agreed. Being free of mortgage is a huge emotional plus.

I look at interest as The Enemy. I never want to feed The Enemy. I don't think we've paid interest on anything since I sold my first (and last) mortgaged house in 1989. Our next house that we bought was a gut rehab, we moved in when electrical was installed only in 1/3 of the house, we had plywood floors for 15 years, kitchen cabinets built over a  year period, a construction staircase with no railings for 23 years and etc. But never a mortgage, don't feed The Enemy.

Now the local Nanny G wouldn't issue an occupancy permit for us to live in this house in the state is was in 25 years ago and that is too bad. Really too bad because it eliminates an opportunity for building sweat equity and Mustachean lifestyle.

Title: Re: Mortgage Payoff Club!!
Post by: tomsang on January 12, 2014, 11:15:57 PM

Agreed. Being free of mortgage is a huge emotional plus.


My posts were to highlight this sentiment. Paying off your mortgage when you have a sub 4% mortgage is purely emotional. There is no logical reason to do this if you plan on retiring with a 4% safe withdrawal rate. Over the course of history, the stock market has outperformed these levels over a 30 year period every single time. By putting emotional connotations towards financial concepts then your logic is clouded. Paying interest is not evil, it is not bad, it does not hurt you; it is strictly a business transaction. If the government is trying to stimulate the economy by artifically keeping rates low then you are mustachian to take advantage of this environment.

I see Mustachian behavior as that of making logical choices that put you closer to financial independence. Paying off your mortgage does not do that when your mortgage is sub 4%.  When people talk about the interest they saved they should also figure out the return that they are missing out by not investing in the stock market. Over the past 10 years I am at 8.8%+, last year was 28%+, and the past three years I have averaged 18%+ in my investment accounts.  To save 4%, I would have pushed my retirement date out a few years.
Title: Re: Mortgage Payoff Club!!
Post by: Alfred J Quack on January 13, 2014, 09:31:02 AM
@Tomsang: I disagree with it being purely emotional. Currently we are paying down our mortgage by about 1k per month with approx. 275 in interest. If I was only saving/investing I'd have to cover an annual spending amount of 17k whereas without a mortgage I only need 12k. With every additional payment my montly fixed expenses lower slightly.
When the mortgage is payed off I have 2 advantages: my current 5k stash will last me nearly 8 months in case of an emergency (F-you I quit) whereas with my current expenses it would only last me less than 4.
Second advantage is i can devote 75% of income to saving and investing as opposed to less than 50% now.

The lack of compounding is likely negated by the lack of stash I need to build in total...
Title: Re: Mortgage Payoff Club!!
Post by: tomsang on January 13, 2014, 11:54:24 AM
@Tomsang: I disagree with it being purely emotional. Currently we are paying down our mortgage by about 1k per month with approx. 275 in interest. If I was only saving/investing I'd have to cover an annual spending amount of 17k whereas without a mortgage I only need 12k. With every additional payment my montly fixed expenses lower slightly.
When the mortgage is payed off I have 2 advantages: my current 5k stash will last me nearly 8 months in case of an emergency (F-you I quit) whereas with my current expenses it would only last me less than 4.
Second advantage is i can devote 75% of income to saving and investing as opposed to less than 50% now.

The lack of compounding is likely negated by the lack of stash I need to build in total...

I think you are missing the math!  Do two side by side calculations.  One with the $1,000 going to pay down a 4% mortgage and one going into an investment account that averages 8% over a 30 year mortgage term.  I think you can see logically that earning 8% and foregoing paying down a 4% mortgage is going to be the better financial answer.  There has never been a time where the market has not performed greater than 4% since records have been kept.  When you talk about compounding you have to take into account that your investments are compounding.  If it all hits the fan, you don't just have the $5,000 that is in your emergency fund.  You also have all the months and returns that you have been saving vs. paying down your mortgage. 

So if in two years something hits the fan you have the 24 months at $1,000 savings plus the returns on those savings.  So you have like $29k + your $5k emergency fund.  So your numbers would be figuring out how long could you support yourself with $34k in the bank. So you would have 2 years saved up vs.  4 months that you currently have saved ($5,000 emergency fund/ $17k per year to live and make payments).  You are much safer having your assets liquid vs. having them tied up in your house in a crisis. 

If you are half way done paying off the mortgage and you can't make the next payment, you can't just call the bank and say you prepaid the past two years.  They will say you are out of contract and make the payment or face foreclosure.  If you were investing the $1,000, then you could liquidate investments to pay the mortgage and support your family until you get back on your feet.  You would have two years to get on your feet vs. a 4 month buffer with the $5k. 

Mathematically it is pretty simple to see that earning 6 to 8 percent in investments is a better call than paying down a sub 4% loan.  To take the emotion out, calculate the loss of portfolio gain by paying down the 4% mortgage.  If the market returns anything greater than 4% you are better off investing.  If you think the market is going to earn less than 4% over the next 30 years then make sure that your safe withdrawal rate is 1% or closer to your life expectancy as all the models are based on historical performance.  We have never seen a sub 4% return on investments over a 30 year period of time.  If you think that we are going to see those low returns you should also sell your house as the economy is going to be crashing and your house is going to lose significant value.  You would be better off renting when we are in a deflationary time.

In an earlier post on page one I do the side by side analysis of paying off debt or investing.  Again, mathematically if you think we are going to average over 4% you are better off investing. 
Title: Re: Mortgage Payoff Club!!
Post by: Alfred J Quack on January 13, 2014, 01:27:22 PM
Sorry if some comments are a bit blunt, but thanks for triggering me to calculate it. It feels good to review the numbers further in stead of just the feeling I've been operating on so far.

Doing the math:
Current mortgage payment minimum: 400 (interest/principal on an annuity based mortgage with 26 years left @4% for 2 years after which it is variable but i'll use the 4%)

Investable remains: approximatly 850/mo
Mortgage payed at the end: 124k
Investments returned (based on Excel 8 runs of random annual result between 2 and 8%):  450k/550k

Result when continuing current payment scheme:
Downpayment finished in approx. May 1 2020 (based on mortgage payment every 30 days with 4% fixed interest) for ease of calculation, total sum payed:  67k
This results in a loss of investments for 5.5 years or 56k in principle compared to the first scheme.
Investments starts now at 1250/mo for another 20 years (same runs as above):  291k/336k

So in principle you are correct. Even with the difference split the investment option returns a lot more.

However, in the last 20 years there have been some major crashes and major uplifts. If you factor in those risks (and I'm not good enough to use Excel for that) I think that the end result may be a lot more variable depending on the end-point measurement. Regarding your investments-as-safety (for a rainy day) you are not factoring in potential market loss. Depending on actual stock value my 24k saved might actually be 12k when I needed it most as well as 36k because the market is soaring. This scares me away from depending too much on this for income replacement (even in eventual retirement).

For my personal situation my current payoff scheme is financially viable (even though it is not optimal) because I do not expect to exceed the 4%. When I start building a stash my scheme does not weigh on 100% stocks/indexes (more like 30% stocks, 50% long-term savings at fixed interest and 20% short term/cash savings) so the overall returns will be lower than the projected 4-8% and thus the gap shortens somewhat. Also, my country taxes equity above 40k (except home-value) at 1.2% anually so returns will be lower still. In the end I think for me personally it does not make that big of a difference except the mortgage downpayment being certain whereas the market is not, this was always my main reason to kill the mortgage firts. It does not mean I don't invest though that is currently only play money (to see how my tax-forms need to be filled out next year).
When something does hit the fan my country also has several safety nets, so I'd have to be out of work for several years before the 5k actually come into play (unless I quit on principle, but I won't unless I've got 20k+ in investments/savings which would then last me 2 years easily :P)...

Last point: when my mortgage is payed off it does not matter whether the house loses value because so would most other houses in the same price-range. Prices have been dropping since 2009 with a staggering total of 20%. The housing market is subsidized by a hefty tax-refund by the govt (about 40-50% returned from payed interest) so any market implosion would have effect but not nearly as extravagant as 40% drops in 1 year like some stories I heard in the US :)
Title: Re: Mortgage Payoff Club!!
Post by: medinaj2160 on February 03, 2014, 05:09:36 PM
We are in as well :)

Me 28 and my wife 29 purchased our first and last home June 2012.

Value of our home according to Zillow 180K. We only paid 126K since it was a foreclosure and have a 30 year mortgage at 3.75%.
 
As of today we own $64,385.

Payoff goal: March 2015

My reason for paying the house fast is peace of mind because you never know what the future will hold.

New balance: $59,980

I miss judged my tax withholdings so I am not going to be able to pay as much on my mortgage next month :/

New balance: $55,556

little by little
Title: Re: Mortgage Payoff Club!!
Post by: reginna on February 03, 2014, 05:18:11 PM
We did it! 169,900 @ 3.75% paid in 2.5 years. Had a head start with a 50k down payment and saved about 44k interest by paying off early. We also chose 15 year term. Wooo!

So impressed with you and your badassity! Congratulations
Title: Re: Mortgage Payoff Club!!
Post by: secondcor521 on February 03, 2014, 10:32:00 PM
Made most of the larger February payment about a week early just because I am itchy.  Will reimburse my emergency fund when the check arrives in about a week.  Also recorded the regular February payment.

New balance:  $23,933.04

The other number I'm looking at is what I could throw at it if I reduced my emergency fund to 6 months and accounting for the fact that my emergency fund can be somewhat smaller if I don't have a mortgage payment.  If I get that close I'll be sorely tempted to pull the trigger and pay it the rest of the way off.

After this not too many big payments will be likely until May or so.
Title: Re: Mortgage Payoff Club!!
Post by: FunkyStickman on February 04, 2014, 05:24:37 AM
I'm in. I've looked at the numbers, and in my situation, paying the mortgage is the way to go.

I live in a mobile home, with 6.25% interest rate for 30 years. The House won't be worth anything in 30 years, its worth is steadily declining. We probably can't refinance it, either. Had a hard enough time getting any loan at all for it.

However, things are looking up since I started being Mustachian. I'm 5 years into it, and I've still got $72,000 left to pay on the principal... but $85K more just in interest if I keep going.

So, tax return (about $3900) is going on the mortgage, and I'm putting down an extra $500 a month. At this rate, we'll have it paid off (and not have paid an extra $85K) by 2020, if not sooner. Then we'll have $1200+ extra a month to invest.
Title: Re: Mortgage Payoff Club!!
Post by: Alfred J Quack on February 05, 2014, 06:57:06 AM
I'm in. I've looked at the numbers, and in my situation, paying the mortgage is the way to go.

I live in a mobile home, with 6.25% interest rate for 30 years. The House won't be worth anything in 30 years, its worth is steadily declining. We probably can't refinance it, either. Had a hard enough time getting any loan at all for it.

However, things are looking up since I started being Mustachian. I'm 5 years into it, and I've still got $72,000 left to pay on the principal... but $85K more just in interest if I keep going.

So, tax return (about $3900) is going on the mortgage, and I'm putting down an extra $500 a month. At this rate, we'll have it paid off (and not have paid an extra $85K) by 2020, if not sooner. Then we'll have $1200+ extra a month to invest.

Way to go! 6.25% is nothing to sneeze at and keeping most of 85k in your pocket most be a good feeling :)
Title: Re: Mortgage Payoff Club!!
Post by: shusherstache on February 05, 2014, 12:44:50 PM
I think I survived a layoff (woo!) but I'm interviewing for a job next week for 20-25% less money (boo).  It's time to throw in the cards with current company - if my health isn't there than there's not much use in having a paid-for home.  Plus, this new place is reliable, has free transpotation (no commuting costs!) and insurance and will pay for my continued education.

This isn't to say we aren't attacking the mortgage - we sent a 7.5k check this last month - but it may be more slow-going than we expected.  Health/wellness above all else especially as we move towards starting a family.

Current balance is roughly 50,500.
Title: Re: Mortgage Payoff Club!!
Post by: robtown on February 05, 2014, 06:13:08 PM
We started a year ago.   We refinanced for a 5/1 ARM at 2.25%   We will have it paid in 2018 when the 5 year expires.   My wife will quit her job a couple months later.
Title: Re: Mortgage Payoff Club!!
Post by: jrhampt on February 06, 2014, 10:04:41 AM
At $167k now, but knocking off another $23k with this month's payment.  And depending on bonus, may be able to do the same next month, which would put us under the $100k mark this summer.
Title: Re: Mortgage Payoff Club!!
Post by: FIreDrill on February 06, 2014, 01:38:34 PM
At $167k now, but knocking off another $23k with this month's payment.  And depending on bonus, may be able to do the same next month, which would put us under the $100k mark this summer.

Awesome!  That mortgage will be gone pretty fast at this rate!
Title: Re: Mortgage Payoff Club!!
Post by: jordanread on February 06, 2014, 08:20:23 PM
Challenge accepted!
Not necessarily paying off the mortgage, but addressing other questions raised in this thread. I mentioned in another thread that things like the "LifeSpreadsheet" are too complex. I will accept the sub-textual challenge of creating a fully scalable, super-simple (to start), Badassity Calculator that should assist in overcoming the predictable irrationality we all experience. That being said, I do understand that there is a reason it's predictable. The emotional payoff is so variable that it almost cannot be calculated (but I'll try). I'll come back once the requirements gathering is done, and post for review. Any suggestions can be emailed to me, or just posted here. I'll make sure I check back.
Title: Re: Mortgage Payoff Club!!
Post by: Mortgage Free Mike on February 07, 2014, 09:30:24 AM
Just read through some of these post. I paid off my $86,000 mortgage (15 year, 3.75%) in 2 years and 2 months. It was the best decision for me, despite the low interest rate. I feel great about it.

For those who say they could make more money in the markets, perhaps it's true. But the reason I was able to accomplish this goal is because I had something to look forward to.  A finish line.  I was finding new ways to save and earn more in order to reach my goal. Had I not set the goal to pay off my mortgage, I think I probably would not have found a way to save $86,000 in 2 years, which means I wouldn't have had as much money to invest. 

This journey was about being financially free.  Now I am and the possibilities are endless.  I also blog about this topic at http://www.saveonalmosteverything.com (http://www.saveonalmosteverything.com) Keep me posted on your progress.
Title: Re: Mortgage Payoff Club!!
Post by: Sofa King on February 10, 2014, 01:25:56 PM

I live in a mobile home, with 6.25% interest rate for 30 years. The House won't be worth anything in 30 years, its worth is steadily declining. We probably can't refinance it, either. Had a hard enough time getting any loan at all for it.

However, things are looking up since I started being Mustachian. I'm 5 years into it, and I've still got $72,000 left to pay on the principal... but $85K more just in interest if I keep going.



That is crazy price for a mobile home. I paid LESS for a 3 bedroom 2 bath house in upstate NY that has gone up in value.  I have never heard of a trailer park home costing so much. But then again I never looked into buying one either.  If you spent this much why didn't you just purchase a regular house?
Title: Re: Mortgage Payoff Club!!
Post by: FunkyStickman on February 11, 2014, 07:50:04 AM

I live in a mobile home, with 6.25% interest rate for 30 years. The House won't be worth anything in 30 years, its worth is steadily declining. We probably can't refinance it, either. Had a hard enough time getting any loan at all for it.

However, things are looking up since I started being Mustachian. I'm 5 years into it, and I've still got $72,000 left to pay on the principal... but $85K more just in interest if I keep going.



That is crazy price for a mobile home. I paid LESS for a 3 bedroom 2 bath house in upstate NY that has gone up in value.  I have never heard of a trailer park home costing so much. But then again I never looked into buying one either.  If you spent this much why didn't you just purchase a regular house?

Actually, that includes the land, and we got it on a very large (double-sized) lot, so not all of that is the home. At the time, the housing market was wanting ridiculous prices for even small homes in rural areas... believe it or not, this was the cheapest thing we could find that wasn't trashed.
Title: Re: Mortgage Payoff Club!!
Post by: jrhampt on February 11, 2014, 08:38:02 AM
But the reason I was able to accomplish this goal is because I had something to look forward to.  A finish line.  I was finding new ways to save and earn more in order to reach my goal. Had I not set the goal to pay off my mortgage, I think I probably would not have found a way to save $86,000 in 2 years, which means I wouldn't have had as much money to invest. 

I think this is very true.  I can accomplish a LOT when there's a time horizon of 1-2 years...it's easier to stay intensely motivated.  Sure, I can hold steady for longer time periods, but at a lower level.
Title: Re: Mortgage Payoff Club!!
Post by: secondcor521 on February 11, 2014, 12:57:09 PM
OK, I think I'm addicted.

New balance:  $9,999.99

I do have some expenses coming up (taxes, a small driving vacation next weekend with my son).  Will keep pressing forward; hope to have it done by my 45th birthday in May.
Title: Re: Mortgage Payoff Club!!
Post by: FunkyStickman on February 11, 2014, 02:48:16 PM
Just dropped $5K on principal... down to about $67K on principal! That cut about 4 years of interest. Going to keep plopping down per month as I can.
Title: Re: Mortgage Payoff Club!!
Post by: Bateaux on February 12, 2014, 10:58:31 AM
It's hard to believe how good debt freedom feels.  Nothing you can buy can give this feeling.
Title: Re: Mortgage Payoff Club!!
Post by: steveo on February 12, 2014, 01:07:21 PM
It's hard to believe how good debt freedom feels.  Nothing you can buy can give this feeling.

This is my first goal. 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.
Title: Re: Mortgage Payoff Club!!
Post by: soccerluvof4 on February 13, 2014, 04:16:40 AM
Just going to say they need to be rid of the 30 year mortgage and back to 20% down. So I see both sides of the Arguement with basically getting free money. But i for one would rather pay off my mortgage which i havent had one in 20 years and have that behind me Just because as stated in the US we don't ever own our house. My fucking taxes are 9300$ and I hate it. I live in a great school system and community but I want out of this. By the time i add my water bill and other utitlites and maintenance i have a mortgage. So thats my stupidity. Its costing me 13-1400 dollars a month for a house thats paid for. 4-5 years max when 2 of my 4 kids are off to college I am cutting this at least in half . I cant move because of my biz as well so if that changed that to would make me move. Ok self inflicted face punches........last thing dont keep a mortgage for the tax credit. Dont think anyone was suggesting that but I know people that have argued that.  Do what lets you sleep at night. I have no debt and  i still only slept till 3am last night cant imagine if i did have any debt!
Title: Re: Mortgage Payoff Club!!
Post by: Bateaux on February 13, 2014, 06:23:39 AM
Wow!!!
I can't imagine paying that much in property tax.  You are paying 10 times what I pay.  I'm sticking to the south.
Title: Re: Mortgage Payoff Club!!
Post by: nicknageli on February 13, 2014, 08:29:51 AM
Yeah, those taxes are brutal!
Title: Re: Mortgage Payoff Club!!
Post by: jrhampt on February 14, 2014, 07:41:25 AM
Hmm, yes.  Our property taxes just got bumped up to $7200 this year.  I am not thrilled about this, and one of my top priorities in retirement will be to move to an area with lower property tax.
Title: Re: Mortgage Payoff Club!!
Post by: secondcor521 on February 17, 2014, 07:09:05 PM
Yup.  I was addicted.

New balance:  -$98.71.

Overpaid a little just to take care of any residual interest.

Will have to wait until March 10th for all the scheduled payments to post and have it be official.

Surprisingly I am not debt free because I owe $133.34 to American Express at the moment and will be charging my vacation expenses this upcoming weekend in order to get 10,000 MR points.  Then I'll sock drawer that card and be debit card only.

Should be able to cash flow my tax bill in March/April time frame.
Title: Re: Mortgage Payoff Club!!
Post by: jordanread on February 24, 2014, 10:51:21 AM
Yup.  I was addicted.

New balance:  -$98.71.
Congatulations!!!
Title: Re: Mortgage Payoff Club!!
Post by: train_writer on February 24, 2014, 12:58:30 PM
Great to read these pay-off stories!

As one of the Dutch members of the mortgage-payoff-club, it now makes even more sense to me to throw money at the principal:
I reached the stash treshold where I have to pay the extra 1,2 % tax on savings, bonds & stocks!

This means that the market has to yield 3,9 (mortgage 3,85%) + 1,2 = 5,1 % on average to even the mortgage payment.

I immediately paid an extra 2500 euros towards the principal and lowered our monthly annuity payment to 700. I can see how this can be addictive! Immediate results = extra motivation.

I hope to be able to make 2 more 2500 euros payments this year and bring the monthly payment down to a very low level within a few years

The total mortgage is now 144k in euros, we bought 1 year ago for 151k including transaction costs. Long way to go!



Title: Re: Mortgage Payoff Club!!
Post by: cdub on February 24, 2014, 02:17:52 PM
Just going to say they need to be rid of the 30 year mortgage and back to 20% down.

A-MEN! At least to the 20% down portion. Easy money is what inflated the market.

My fucking taxes are 9300$ and I hate it. I live in a great school system and community but I want out of this. By the time i add my water bill and other utitlites and maintenance i have a mortgage. So thats my stupidity. Its costing me 13-1400 dollars a month for a house thats paid for.

I think my property taxes are round $5k or 6k. It's about $460/month. But yeah - ouch that's alot.
Title: Re: Mortgage Payoff Club!!
Post by: Threshkin on February 24, 2014, 02:22:47 PM
It's hard to believe how good debt freedom feels.  Nothing you can buy can give this feeling.

+1 to that!  I paid off my mortgage last year even though it was a low rate, 3.75%.  The peace of mind was much more important to me.  The cash flow improvement sure helped as well!
Title: Re: Mortgage Payoff Club!!
Post by: secondcor521 on February 24, 2014, 02:28:22 PM
Yup.  I was addicted.

New balance:  -$98.71.
Congatulations!!!

Thanks !!
Title: Re: Mortgage Payoff Club!!
Post by: basd on February 25, 2014, 01:39:10 AM
The total mortgage is now 144k in euros, we bought 1 year ago for 151k including transaction costs. Long way to go!
At least you're on the right track! As I've posted before and as a fellow Dutchman, I still have to start working on ours. We've got a significantly larger mortgage amount (238.500) and a significantly higher interest rate as well (5,4%), so the urge is even bigger.

On the plus side, we're saving quite a bit of money at the moment (although that will dip again as soon as our son goes to daycare), so I expect to be able to pay off around 10% of the total mortgage amount before the end of the year. That will be the goal for the years to come as well, hopefully making us mortgage free in 10-15 years.

Again, well done and good luck on the rest of the journey :)
Title: Re: Mortgage Payoff Club!!
Post by: shusherstache on February 26, 2014, 10:06:40 AM
I'm switching jobs to lower pay (boo!) but staying in my old job until my bonus (yay).  Lower pay, higher sanity, better stability, free transportation!  Even if we don't make add'l payments we're set to payoff in 4 years - but we'll kick its ass.

Current balance: 50,600-ish
Title: Re: Mortgage Payoff Club!!
Post by: soccerluvof4 on February 26, 2014, 10:42:29 AM
Wow!!!
I can't imagine paying that much in property tax.  You are paying 10 times what I pay.  I'm sticking to the south.



I know its ludicrous! I so want to head South but be 4 years before i can consider it. Biz is here.
Title: Re: Mortgage Payoff Club!!
Post by: nicknageli on February 26, 2014, 01:44:41 PM
I know its ludicrous! I so want to head South but be 4 years before i can consider it. Biz is here.

Not ludicrous at all.  You don't have to shovel sunshine!  (http://www.vwvortex.com/Anthony/Smilies/thumbup.gif)
Title: Re: Mortgage Payoff Club!!
Post by: Strawberrykiwi75 on February 27, 2014, 12:57:56 AM
I'm settling on a house tomorrow and I can't wait to pay it off. It's my first home, so I only had a 20% deposit.

212k lending (265k purchase price), I've split it into two parts: offsetting and fixed.
The offsetting is 32k, and any money in my accounts stand against the loan, reducing the interest. So say I had 20k in my accounts, I only pay interest on the 12k remaining. I'm planning on saving as hard as I can to get to about 30k in my accounts, so that I barely pay any interest at all. No principal payments on this loan for 5 years either, which means I can plow all my money at the other loan.

180k fixed for 3 years, and I'm paying it off assuming an interest rate 2.3% higher than mine. Then I'll chuck any bonuses I can at it too.

Hoping to get it all paid off in half the time or less!
Title: Re: Mortgage Payoff Club!!
Post by: lbdance on March 01, 2014, 02:17:55 PM
I'm in. (About 95k owing at present) If we stick to the banks timeline - we would have about 8-9 years left. Our current conservative plan will have it paid off somewhere mid 2016.
The stretch goal is to have it paid off before the end of next year. And if possible before Oct 2015 to give my hubby an extra birthday present :)
Title: Re: Mortgage Payoff Club!!
Post by: medinaj2160 on March 03, 2014, 06:05:53 PM
We are in as well :)

Me 28 and my wife 29 purchased our first and last home June 2012.

Value of our home according to Zillow 180K. We only paid 126K since it was a foreclosure and have a 30 year mortgage at 3.75%.
 
As of today we own $64,385.

Payoff goal: March 2015

My reason for paying the house fast is peace of mind because you never know what the future will hold.

New balance: $59,980

I miss judged my tax withholdings so I am not going to be able to pay as much on my mortgage next month :/

New balance: $55,556

little by little

New Balance: $51,171
Title: Re: Mortgage Payoff Club!!
Post by: train_writer on March 04, 2014, 11:39:46 AM
we're saving quite a bit of money at the moment (although that will dip again as soon as our son goes to daycare), so I expect to be able to pay off around 10% of the total mortgage amount before the end of the year.


Paying off 10 %  per year is huge, how much does it save you on monthly payments? Also, wow, juggling daycare with saving and paying off and investing, way to go!
-we are thinking about having a kid and pondering on what timing is best, waiting a year, a few years?-
Title: Re: Mortgage Payoff Club!!
Post by: basd on March 05, 2014, 01:53:39 AM
we're saving quite a bit of money at the moment (although that will dip again as soon as our son goes to daycare), so I expect to be able to pay off around 10% of the total mortgage amount before the end of the year.


Paying off 10 %  per year is huge, how much does it save you on monthly payments? Also, wow, juggling daycare with saving and paying off and investing, way to go!
-we are thinking about having a kid and pondering on what timing is best, waiting a year, a few years?-
No idea, but I guess it will amount to a save of around 75 euros net monthly. I'm not sure whether we can reach 10% every year as we have a bit of savings lying around which would go to the mortgage this year and you can only spend them once) but I like a challenge :)
Title: Re: Mortgage Payoff Club!!
Post by: Alfred J Quack on March 05, 2014, 03:19:23 AM
we're saving quite a bit of money at the moment (although that will dip again as soon as our son goes to daycare), so I expect to be able to pay off around 10% of the total mortgage amount before the end of the year.


Paying off 10 %  per year is huge, how much does it save you on monthly payments? Also, wow, juggling daycare with saving and paying off and investing, way to go!
-we are thinking about having a kid and pondering on what timing is best, waiting a year, a few years?-

If you have an annuity based mortgage you can easily calculate this via the PMT formula (you do have to know the number of months left for the remainder of the mortgage).

My mortgage has been reduced to 75k in the meantime, 60k at the end of the year looks doable :)
Title: Re: Mortgage Payoff Club!!
Post by: jrhampt on March 06, 2014, 08:45:47 AM
New balance: $143k

Bonuses next week!  Then we'll know how big this month's payment can be.  This time last year, we were at $203k, so we've made 60k progress over the past 12 months, and that was before we decided to really get serious about paying it off ASAP.
Title: Re: Mortgage Payoff Club!!
Post by: RNwastash on March 06, 2014, 10:21:16 PM
Count me in!! My balance is $144,000.  APR is 3.375% .  After reading so many different articles on whether to prepay or not, I have decided to bite the bullet.  My goal is to pay it off in 5 years so I can go part time.
Title: Re: Mortgage Payoff Club!!
Post by: cdub on March 06, 2014, 11:09:53 PM
New balance: $143k

Bonuses next week!  Then we'll know how big this month's payment can be.  This time last year, we were at $203k, so we've made 60k progress over the past 12 months, and that was before we decided to really get serious about paying it off ASAP.

Woah! $60k in 12 months. That's awesome. I hope to get there soon. Need to rebuild my e-fund though.
Title: Re: Mortgage Payoff Club!!
Post by: smalliswell on March 11, 2014, 11:50:53 AM
I'm in. We have been on the Dave Ramsey path for some time, but really started to hit paying down the mortgage aggressively when I realized I wasn't a fan of my stressful job with long commute and great pay. In my head I thought I could rationalize a change if our home was paid for, and thats all the motivation we needed. I'm thankful for it now. Every single cent since August of 2013 has gone to the remaining 58K left on our house. We will pay it off on April 15th. The job has improved in the mean time, although the commute hasn't. I'm not the type to make fast career decisions either, so we will have to see what being mortgage free feels like when we get there. We are not there yet but dang we can feel what its going to be like. We have started to really think about how we will spend our days. We can hardly wait we are so excited at all the possibilities.

One strategy I've found to work is to snowball our financial goals one at a time. We only big goal at a time, thereby allowing us to get to our goal faster. We did not stop our 401K match, but we did stop funding our ROTH in Jan, and Christmas fund, and vacation fund, home update fund, and will play catch up with that after April 15th.

Here is our facebook page if you want to follow along. Its a work in progress.
https://www.facebook.com/ocsmalliswell
Title: Re: Mortgage Payoff Club!!
Post by: Kipp on March 11, 2014, 01:39:33 PM
@Tomsang: I disagree with it being purely emotional. Currently we are paying down our mortgage by about 1k per month with approx. 275 in interest. If I was only saving/investing I'd have to cover an annual spending amount of 17k whereas without a mortgage I only need 12k. With every additional payment my montly fixed expenses lower slightly.
When the mortgage is payed off I have 2 advantages: my current 5k stash will last me nearly 8 months in case of an emergency (F-you I quit) whereas with my current expenses it would only last me less than 4.
Second advantage is i can devote 75% of income to saving and investing as opposed to less than 50% now.

The lack of compounding is likely negated by the lack of stash I need to build in total...

I think you are missing the math!  Do two side by side calculations.  One with the $1,000 going to pay down a 4% mortgage and one going into an investment account that averages 8% over a 30 year mortgage term.  I think you can see logically that earning 8% and foregoing paying down a 4% mortgage is going to be the better financial answer.  There has never been a time where the market has not performed greater than 4% since records have been kept.  When you talk about compounding you have to take into account that your investments are compounding.  If it all hits the fan, you don't just have the $5,000 that is in your emergency fund.  You also have all the months and returns that you have been saving vs. paying down your mortgage. 

So if in two years something hits the fan you have the 24 months at $1,000 savings plus the returns on those savings.  So you have like $29k + your $5k emergency fund.  So your numbers would be figuring out how long could you support yourself with $34k in the bank. So you would have 2 years saved up vs.  4 months that you currently have saved ($5,000 emergency fund/ $17k per year to live and make payments).  You are much safer having your assets liquid vs. having them tied up in your house in a crisis. 

If you are half way done paying off the mortgage and you can't make the next payment, you can't just call the bank and say you prepaid the past two years.  They will say you are out of contract and make the payment or face foreclosure.  If you were investing the $1,000, then you could liquidate investments to pay the mortgage and support your family until you get back on your feet.  You would have two years to get on your feet vs. a 4 month buffer with the $5k. 

Mathematically it is pretty simple to see that earning 6 to 8 percent in investments is a better call than paying down a sub 4% loan.  To take the emotion out, calculate the loss of portfolio gain by paying down the 4% mortgage.  If the market returns anything greater than 4% you are better off investing.  If you think the market is going to earn less than 4% over the next 30 years then make sure that your safe withdrawal rate is 1% or closer to your life expectancy as all the models are based on historical performance.  We have never seen a sub 4% return on investments over a 30 year period of time.  If you think that we are going to see those low returns you should also sell your house as the economy is going to be crashing and your house is going to lose significant value.  You would be better off renting when we are in a deflationary time.

In an earlier post on page one I do the side by side analysis of paying off debt or investing.  Again, mathematically if you think we are going to average over 4% you are better off investing.

Hello Tomsang,

If my situation stays the same it is better for my to pay off the mortgage ASAP over investing first.  Why?  Well, with being a bit over median income and planning on having kids in the near future, getting rid of the mortgage allows both full contributions for both my spouse and I toward our retirement funds.  This would drop our taxable income considerably and allow us to claim the EIC credit.  Doing a side by side analysis using your 4% difference, investing my planned $4,800 annual extra mortgage payments to investing, waiting to invest until after the mortgage is paid off generates ~$9,500 in more gains over the 17 year comparison.  If either of us happen to get a promotion some time before the mortgage is paid off then we can adjust accordingly and max out our 401(k) then.  But without considering taxes and their potential benefits, you cannot just blindly say a 4% mortgage should never be paid off early.  If someone were earning six figures I would agree since they cannot obtain the EIC.  But for the Median family, I would say pay off the mortgage and THEN max out the 401k.
Title: Re: Mortgage Payoff Club!!
Post by: tomsang on March 11, 2014, 02:55:42 PM
If my situation stays the same it is better for my to pay off the mortgage ASAP over investing first.  Why?  Well, with being a bit over median income and planning on having kids in the near future, getting rid of the mortgage allows both full contributions for both my spouse and I toward our retirement funds.  This would drop our taxable income considerably and allow us to claim the EIC credit.  Doing a side by side analysis using your 4% difference, investing my planned $4,800 annual extra mortgage payments to investing, waiting to invest until after the mortgage is paid off generates ~$9,500 in more gains over the 17 year comparison.  If either of us happen to get a promotion some time before the mortgage is paid off then we can adjust accordingly and max out our 401(k) then.  But without considering taxes and their potential benefits, you cannot just blindly say a 4% mortgage should never be paid off early.  If someone were earning six figures I would agree since they cannot obtain the EIC.  But for the Median family, I would say pay off the mortgage and THEN max out the 401k.

Can you provide your math?  I think I am missing something. 

In your scenario I don't see you touching your investment accounts to fund your 401k, but you can liquidate your investments at any time to pay-off your mortgage or to fund your 401k contributions.  So you don't have to lock into making monthly extra payments to provide you with the opportunity to get the EIC in the future.  If you conduct appropriate tax planning when you need the funds you can cash out your investments that have minimal gains as well.  So if you want to fully fund your 401k so that you can get the EIC then you can still do this by funding your 401k with your after tax investments.

Let me know what I am missing.
Title: Re: Mortgage Payoff Club!!
Post by: Kipp on March 11, 2014, 03:38:57 PM
Hello Tomsang,

I think there is a slight misunderstanding, I currently do not have investment accounts outside my ROTH and 401k. 

If you are referring to investing my planned 4800 into a taxable account instead of directly to the mortgage and then just pay it off when the paths cross, I can see how that is the best scenario in theory.  However, there are no guarantees in investment returns and with a time frame of less than 10 years I don't feel completely comfortable doing this strategy.

Attached is my spreadsheet showing my math.  In my scenario you can see the 4800 being invested for the first 9 years and then it stops there.  Why?  Because I would be investing that same amount when the home is paid off.  Likewise regarding the investing when the home is paid off, I have an extra $9,439 through no principal and interest payments and the available EIC based on current income and tax laws.  To compute the gains I subtract out the ending balance of each investment of $4,800 while subtracting out only $6,439 with the mortgage since the $3,000 from EIC is all free money.  This comes to the difference between the two options of almost $10,000 as you will see on the spreadsheet.

Again this isn't any option for all mustachians, but those with median incomes whom can take advantage of the EIC.
Title: Re: Mortgage Payoff Club!!
Post by: tomsang on March 11, 2014, 09:28:42 PM
@Kipp

If you are not comfortable investing then I think that paying off your mortgage is a way to get a 4% return.  I was still having difficulties understanding your spreadsheet, but a few things stood out.

1) You are using a 4% investment return. The stock market has averaged 8%+ over longer periods of time.

2) After 10 years you are increasing your investment amounts, yet you are not accounting for the principal paydown on the mortgage. That would most likely drop the benefit significantly. You should do side by side asset/liability based calc.

3). You are not doing any harvesting of gains or losses  to minimize income to eliminate any EIC discounts. You should be able to minimize taxable income to claim the EIC in most years.

4) You are not taking any tax benefits for having a mortgage, which may be warranted based on charitable giving, taxes and mortgage interest.

5) You have not placed any value of having liquidity to purchase assets at a discount or the flexibility to get yourself out of trouble with liquid investments.

You are also banking on doing this to structure your income to get the EIC in 10 years. Your income and the rules around the EIC may change significantly in 10 years. As you may have heard a certain portion of the population do not like the idea of giving the less fortunate money. Tax laws will most likely be revamped in the next decade. In any case if you felt comfortable to invest you could liquidate your investments to pay off our mortgage and still get the EIC.

The government was trying to stimulate the economy. They purposely created an environment where interest rates were depressed. We have never seen rates this low. If you can't beat a 3.5-4.5% interest rate over the next 20+ years, then your Safe Withdrawal Rate would be around 1% or your actuarial life as all the models have the markets earning in excess of 4%, with the average being 8%+


Title: Re: Mortgage Payoff Club!!
Post by: Kipp on March 12, 2014, 08:40:33 AM
@Kipp

If you are not comfortable investing then I think that paying off your mortgage is a way to get a 4% return.  I was still having difficulties understanding your spreadsheet, but a few things stood out.

1) You are using a 4% investment return. The stock market has averaged 8%+ over longer periods of time.

2) After 10 years you are increasing your investment amounts, yet you are not accounting for the principal paydown on the mortgage. That would most likely drop the benefit significantly. You should do side by side asset/liability based calc.

3). You are not doing any harvesting of gains or losses  to minimize income to eliminate any EIC discounts. You should be able to minimize taxable income to claim the EIC in most years.

4) You are not taking any tax benefits for having a mortgage, which may be warranted based on charitable giving, taxes and mortgage interest.

5) You have not placed any value of having liquidity to purchase assets at a discount or the flexibility to get yourself out of trouble with liquid investments.

You are also banking on doing this to structure your income to get the EIC in 10 years. Your income and the rules around the EIC may change significantly in 10 years. As you may have heard a certain portion of the population do not like the idea of giving the less fortunate money. Tax laws will most likely be revamped in the next decade. In any case if you felt comfortable to invest you could liquidate your investments to pay off our mortgage and still get the EIC.

The government was trying to stimulate the economy. They purposely created an environment where interest rates were depressed. We have never seen rates this low. If you can't beat a 3.5-4.5% interest rate over the next 20+ years, then your Safe Withdrawal Rate would be around 1% or your actuarial life as all the models have the markets earning in excess of 4%, with the average being 8%+

@ Tomsang

It's not that I am uncomfortable investing, I am still investing a little over 10% of my gross income during this entire time, what I am unsure of is that the time frame is less than 10 years.  To my knowledge the S&P 500 hasn't lost money in a 10 year time frame, but it has in less than 10 years.

1.)  The difference is 4% investment return (the amount earning more than the mortgage interest)

2.) After 10 years I am still accounting for the principal and interest pay down, which is why that money is shown with the the difference of 4% in gains (8% over the 4% return on the mortgage).

3.) If you look at how EIC works, it takes the higher of your AGI or earned income, harvesting losses really won't have any effect unless if I can get my earned income lower (which is possible by putting more in my 401k, and I can put enough in my 401k once I have less debt obligations).

4.) I might get 2-3 years of this benefit, and it is very minimal.  As the standard deduction rises this would go away on its own very shortly without making any additional payments.  I suspect I will be between $600-1000 this year over the standard, so without paying extra towards the mortgage, as interest decreases and the standard increases, I am looking at maybe 2 years to claim this deduction - then the following years I have to claim the refunds of state and local as income.  So this could be a benefit of $135 the first year then maybe $45 the next.  If it makes you feel better I can add that into the calculation, but I don't think $180 is going to drastically change the outcome.

5.) Liquidity is nice... but a 401(K) isn't exactly liquid either.  Besides, dropping expenses decreases the need for liquidity.  What assets do you see as a discount with the current P/E ratios?  It's not like I have $0 going into the market, so I am still dollar cost averaging.  If the market tanks, then I can look into investing that $4,800 in the market and then paying off once it is crosses the paths, but at market highs I am going for the guaranteed return.

If my income changes significantly I will adjust then, and consider it a win.  But I need to plan based on what is known.  If tax rules change it could change how everything works, 401k's, ROTH's, etc.  But one thing that is actually being pushed for is an expansion of the EIC by economists, and it was even in a republican's tax change proposal!  So it may change, but everything could change with a large tax reform, so why would the risk be greater looking to claim the EIC then putting the money in a tax advantaged account?  I guess I have another advantage since I work for a government and it gives me the opportunity to invest in a 403(b) as well as a 401(K).  This would allow me to defer additional an income increase of up to $17,500 (based on current contribution limits), allowing for more flexibility to claim to EIC if my income does increase.
Title: Re: Mortgage Payoff Club!!
Post by: tomsang on March 12, 2014, 05:57:08 PM
Kipp - I put together this worksheet to try to put down my logic.  Check it out and let me know your thoughts.

Tom
Title: Re: Mortgage Payoff Club!!
Post by: MrCash on March 12, 2014, 06:04:28 PM
I would like to join the mortgage payoff club!  My plan is to buy our first house in cash and then work towards FI.  So I won't technically have a mortgage, but hopefully this doesn't disqualify me from the club!  Let's do this!
Title: Re: Mortgage Payoff Club!!
Post by: Kipp on March 13, 2014, 05:54:37 AM
Kipp - I put together this worksheet to try to put down my logic.  Check it out and let me know your thoughts.

Tom

Tom - your calculations are correct.  The one thing I do not see considered is all of the free cash flow to invest once the mortgage is paid off (the principal and interest portion).  I will have to play around with it to add this comparison and also add another spot where I can additionally invest the EIC amount to see the difference over the comparable 30 year period and get back with you.

Kipp
Title: Re: Mortgage Payoff Club!!
Post by: tomsang on March 13, 2014, 08:05:46 AM
Kipp - I put together this worksheet to try to put down my logic.  Check it out and let me know your thoughts.

Tom

Tom - your calculations are correct.  The one thing I do not see considered is all of the free cash flow to invest once the mortgage is paid off (the principal and interest portion).  I will have to play around with it to add this comparison and also add another spot where I can additionally invest the EIC amount to see the difference over the comparable 30 year period and get back with you.

Kipp

@Kipp. In the scenario where you would have paid off your mortgage you can liquidate your investments, pay the taxes, pay off the mortgage and still have money left over.

You can also go to the math tab, find the month that your loan would have been paid off, then go over to the investment column on the yield and you can see that the investment yield plus the additional contribution is greater than the contribution plus the extra amount of the mortgage payment. If the investment yield is greater than the loan yield the benefit will continue to grow throughout the loan term.  So the answer remains the same of which is better, yet the dollar benefit is off by the difference between the mortgage interest rate and the investment yield after the loan is paid off.

For a work around you can figure out what month this occurs and change the formula for all the remaining months to grab the investment yield vs. the loan rate in the paid off loan scenario.  I will try to work on an If/than formula so you don't have to change the formula every time you change the amount.

Thanks,

Tom
Title: Re: Mortgage Payoff Club!!
Post by: Kipp on March 14, 2014, 12:35:43 PM
Kipp - I put together this worksheet to try to put down my logic.  Check it out and let me know your thoughts.

Tom

Tom - your calculations are correct.  The one thing I do not see considered is all of the free cash flow to invest once the mortgage is paid off (the principal and interest portion).  I will have to play around with it to add this comparison and also add another spot where I can additionally invest the EIC amount to see the difference over the comparable 30 year period and get back with you.

Kipp

@Kipp. In the scenario where you would have paid off your mortgage you can liquidate your investments, pay the taxes, pay off the mortgage and still have money left over.

You can also go to the math tab, find the month that your loan would have been paid off, then go over to the investment column on the yield and you can see that the investment yield plus the additional contribution is greater than the contribution plus the extra amount of the mortgage payment. If the investment yield is greater than the loan yield the benefit will continue to grow throughout the loan term.  So the answer remains the same of which is better, yet the dollar benefit is off by the difference between the mortgage interest rate and the investment yield after the loan is paid off.

For a work around you can figure out what month this occurs and change the formula for all the remaining months to grab the investment yield vs. the loan rate in the paid off loan scenario.  I will try to work on an If/than formula so you don't have to change the formula every time you change the amount.

Thanks,

Tom

Yea I was thinking I would need to create an If / than for under the scenario of paying off the mortgage.  Doing this you would do something like balance less than equal to zero add the principal and interest portion to investments plus X.  X indicating a different cell in which I could add an additional investment (such as EIC).  That is my thoughts for adding this to the spreadsheet.

Previously I did say I agree with you that investing then paying off mortgage with invested dollars works best in theory, it is the time frame for the return that makes me wonder if that is best.  If the S&P 500 were to drop 20% from it's high it would be a no brainer for me to invest then pay off with invested dollars.  I guess it is my preference in avoiding stock valuation fluctuation risk and yours in avoiding liquidity risk.  Either way there is risk.  I suppose a hybrid plan would be the best way to offset those two risks (say 50% invest 50% mortgage).
Title: Re: Mortgage Payoff Club!!
Post by: train_writer on March 15, 2014, 02:52:10 PM
Interesting discussion in the last posts, Kipp and Tomsang. You made me rethink my strategy.

What I haven't seen in the calculations is recasting the mortgage with every extra payment towards the principal. Recasting = a 30-year mortgage is still a 30-year mortgage but the minimum monthly payment is recalculated.

I personally own a 30 year mortgage that is recasted automatically with every extra payment. After reading your discussion, I might stop paying down the mortgage once the monthly minimum payment feels more comfortable. Which would be -in my current estimations- around 600 euros or the equivalent of where I could no longer find a rental appartment in my region.

I see this recasting as building in extra resilience in case of unemployment; illness; other unforeseen hazards; or sudden urge for more travelling-less working.

Example
Mortgage: 200.000 dollars, 30 years, 4 %.
Fixed monthly payment for 30 years: 955 dollars
Extra payment of 10.000 in the first year, recasted: 907
Extra payment of 10.000 in the second year, recasted : 856

If the person in the example feels comfortable with around 850, he can stop paying extra towards the mortgage. If however, the comfortable level lies around 700, he should continue.

Edit: my automatic recasting is without any additional costs. I just realised this might not be the case in the US, depending on the policy of your lender.
Title: Re: Mortgage Payoff Club!!
Post by: Cassie on March 15, 2014, 03:11:12 PM
You guys are all doing awesome!!! Our home is paid for and it really is a wonderful feeling plus our taxes are low-Nevada.  There has been a lot of discussion on other threads about saving versus paying off mortgage & many say the math points that direction but paying off your home is a guaranteed savings plan with no risk. 
Title: Re: Mortgage Payoff Club!!
Post by: dabears847 on March 16, 2014, 10:26:30 AM
It just doesn't seem right, since paying off my mortgage early saves me over $200,000 in interest.
According to Washington Post, Capital Gains Tax will increase from 15% to possibly 25%. Not pleasant news to us investors.[/color]

Paying off your mortgage may "Save You $200,000 in mortgage interest", but the bigger issue is how much does it costs you in "Portfolio Gain".

If you have a $600,000 mortgage and pay it off over 30 years at 3.5% mortgage rate, then you will pay approximately $370,000 in interest over the 30 years.  If you choose to make an additional $1,500 per month mortgage payment, then you will cut the 30 year mortgage down to 188 month mortgage and you will pay approximately $178,000 in interest.

So by making an additional $1,500 payment per month, you "save" $192,000 in interest.  Close to your $200,000 savings that you mentioned.

So how does $1,500 per month going to your mortgage cost your portfolio over time?

That depends on what return you have over a 188 month/close to 15.5 year time frame.

Starting with 0, your portfolio would grow to the following at the following yields:

11% = $746,000     
10% = $677,000
 9% = $615,000
 8% = $560,000
 7% = $510,000
 6% = $466,000
 5% = $427,000
 4% = $391,000
3.5% = $367,000

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. 

188 payments of $1,500 = $282,000 of capital

So the taxes would be calculated based on the return - $282,000.  IE 11% = $746,000-$282,000 = $464,000 gain.  25% of the gain = 25% of $464,000 = $116,000 of taxes if you cashed them all in at once.  You would probably manage taxes better.  $746,000 - $116,000 = $630,000.  Subtract off the mortgage that you still have of $367,000 and you have a benefit of $263,000.

After your tax rate of 25%, the results would be as follows:

11% = $263,000
10% = $211,000
 9% = $165,000
 8% = $124,000
 7% = $86,000
 6% = $53,000
 5% = $24,000
 4% = $-3,250
3.5% = -21,250

This is calculated at a very high capital gain rate of 25%, and not managing any taxes.  Just cashing out in 188 months, and many other assumptions that don't make sense.  The biggest one is all the current tax benefits that you get by itemizing your taxes and claiming your home mortgage deduction. 

Using the current 15% tax rate would result in:

11% = $309,000
10% = $251,000
 9% =$198,000
 8%  = $151,000
 7% = $109,000
 6% = $71,000
 5% = $38,000
 4% = $7,650
3.5% = $12,750 

Again with managing your realization of the gains you should be able to bring down taxes even further and again this does not take into the benefits of having the home mortgage deduction on your tax return while you are still paying high tax rates while you are working.

So over a period of 30 years, if you can get anything above 4% you are better off keeping your 3.5% mortgage as long as possible.

I am confident that I can get above 4%, if I can't then I would probably be earning a 0% return after inflation.  If we have that then our Safe Withdrawal Rate would be close to 1% which would cause significant issues to everyone.  A 30 year fixed rate mortgage is a great hedge against inflation.  The Government is giving those who take it free money to jumpstart the economy.  Those who pay it down faster than required are foregoing the government's gift to homeowners.   

I crunch these numbers all the time and I came to the value of piece of mind that paying off my house would provide a greater return should my wife or I lose our jobs.

1. I've built massive excel charts and equations evaluating the cash flow of the before cash and after cash. One thing I found is the opportunity of cash flow after the mortgage is paid off, that has to be calculated as well for the return comparison. ie. the second half of the mortgage or 15years of no mortgage payments invested and the benefit of compounding.

2. I could pay off my rentals and take the tax savings which is marginally better than paying off my house. However, I would lose the comfort of something unexpected happening to our cash flow. Maybe we have another downturn in the real estate market so I'm waiting to pay those off last.

3. I look at paying down my house as a form of bond buying as part of my investing strategy.

Title: Re: Mortgage Payoff Club!!
Post by: tomsang on March 16, 2014, 11:00:51 AM
I crunch these numbers all the time and I came to the value of piece of mind that paying off my house would provide a greater return should my wife or I lose our jobs.

1. I've built massive excel charts and equations evaluating the cash flow of the before cash and after cash. One thing I found is the opportunity of cash flow after the mortgage is paid off, that has to be calculated as well for the return comparison. ie. the second half of the mortgage or 15years of no mortgage payments invested and the benefit of compounding.

2. I could pay off my rentals and take the tax savings which is marginally better than paying off my house. However, I would lose the comfort of something unexpected happening to our cash flow. Maybe we have another downturn in the real estate market so I'm waiting to pay those off last.

3. I look at paying down my house as a form of bond buying as part of my investing strategy.

Are not taking into account that the investments kick off yield that can be tapped?  Your cashflow will be significantly better off if investments yield greater than your mortgage rate.  If you don't have a paid off mortgage, then prepaying your mortgage puts you in a significantly riskier situation if you or your wife lose your jobs.  Have investments provides a huge emergency fund vs. having your money locked up in your house.  If you prepay your mortgage by $50k, then you have an emergency where you don't have the money to pay the monthly payment the bank will not say do not worry about your payment as you prepaid $50k.  They will say make your payment by x date or we will begin foreclosure.  If you have excess dollars in investments you can liquidate your investments, payoff your bills, payoff your mortgage, etc. until you get back on your feet.

It is clear that many forget to include the investment side of the income to offset the mortgage side of the expense. If you look at in this way the peace of mind should/would be greater than having a partially or fully paid off mortgage as you in effect have a huge emergency fund earning longterm market rates.  Check out my Excel spreadsheet to see the impact on your finances based on various assumptions.

This is a very personal choice and there are no terrible decisions, but I want to point out to you and everyone else the math behind the decision.  Most don't see or don't count the investment side of things.  If they have good reasons for that, then I think it would be great to share those with the board.

If you are comfortable I would like to see your Excel file to see your assumptions and calculations.   
Title: Re: Mortgage Payoff Club!!
Post by: dabears847 on March 17, 2014, 04:46:10 PM
I crunch these numbers all the time and I came to the value of piece of mind that paying off my house would provide a greater return should my wife or I lose our jobs.

1. I've built massive excel charts and equations evaluating the cash flow of the before cash and after cash. One thing I found is the opportunity of cash flow after the mortgage is paid off, that has to be calculated as well for the return comparison. ie. the second half of the mortgage or 15years of no mortgage payments invested and the benefit of compounding.

2. I could pay off my rentals and take the tax savings which is marginally better than paying off my house. However, I would lose the comfort of something unexpected happening to our cash flow. Maybe we have another downturn in the real estate market so I'm waiting to pay those off last.

3. I look at paying down my house as a form of bond buying as part of my investing strategy.

Are not taking into account that the investments kick off yield that can be tapped?  Your cashflow will be significantly better off if investments yield greater than your mortgage rate.  If you don't have a paid off mortgage, then prepaying your mortgage puts you in a significantly riskier situation if you or your wife lose your jobs.  Have investments provides a huge emergency fund vs. having your money locked up in your house.  If you prepay your mortgage by $50k, then you have an emergency where you don't have the money to pay the monthly payment the bank will not say do not worry about your payment as you prepaid $50k.  They will say make your payment by x date or we will begin foreclosure.  If you have excess dollars in investments you can liquidate your investments, payoff your bills, payoff your mortgage, etc. until you get back on your feet.

ANS: This is all about timing, in a perfect scenario you could yield 10% but you could also lose 10%. This is how opportunity of cash flow comes into play and the time horizon.

ANS: I'm actually closing a Home Equity Line of Credit next week. This will allow me access to my homes equity that I've paid into the house in the event I need the funds. Also my goal is to payoff the house so I can retire sooner while reducing the amount I need in retirement.



It is clear that many forget to include the investment side of the income to offset the mortgage side of the expense. If you look at in this way the peace of mind should/would be greater than having a partially or fully paid off mortgage as you in effect have a huge emergency fund earning longterm market rates.  Check out my Excel spreadsheet to see the impact on your finances based on various assumptions.

ANS: Your assuming investing in the DOW at 16,500 will yield you short term and long term returns which I'm finding it hard to invest with the market so high currently. You should also consider the potential for a loss in your equation.

This is a very personal choice and there are no terrible decisions, but I want to point out to you and everyone else the math behind the decision.  Most don't see or don't count the investment side of things.  If they have good reasons for that, then I think it would be great to share those with the board.

ANS: Last part to consider, opportunity of cash flow

A: One scenario shows the return in the market and yielding perfect returns vs the current mortgage yield

Scenario B: Consider the after mortgage payoff cash flow available for the 15years of no mortgage payments and the extra payments previously going to principal payments now going to the market and now give it the same perfect returns.

P&I 1500 + Extra example of 1000 = 2500 Monthly for 15 years will yield a great return compounding all while having the piece of mind of your house paid off.

Also, now consider a shorter term for Early Retirement, your horizon plays a big role.





If you are comfortable I would like to see your Excel file to see your assumptions and calculations.
Title: Re: Mortgage Payoff Club!!
Post by: jrhampt on April 01, 2014, 06:19:56 AM
New balance: $143k

Bonuses next week!  Then we'll know how big this month's payment can be.  This time last year, we were at $203k, so we've made 60k progress over the past 12 months, and that was before we decided to really get serious about paying it off ASAP.

New balance: $123k

Sold some company stock after it vested, so this month will be another big payment.  Should be able to get it under $100k.  That will be the last of the unusually large payments this year, though.  Hoping to get into the mid-forties by the end of the year.
Title: Re: Mortgage Payoff Club!!
Post by: Cassie on April 01, 2014, 12:39:52 PM
You are doing an awesome job!!
Title: Re: Mortgage Payoff Club!!
Post by: Norrie on April 01, 2014, 02:49:51 PM
Waiting for our most recent payment to be processed, but new balance will be around 43,000. The goal is to have it paid off by the end of August, which may be a bit too rowdy. We'll see.
Title: Re: Mortgage Payoff Club!!
Post by: cdub on April 01, 2014, 03:17:59 PM
Waiting for our most recent payment to be processed, but new balance will be around 43,000. The goal is to have it paid off by the end of August, which may be a bit too rowdy. We'll see.

Awesome! Do to Murphy coming to visit I'mm going to have to build back my EF until I start throwing all the money at the mortgage. But that's great for you!
Title: Re: Mortgage Payoff Club!!
Post by: medinaj2160 on April 02, 2014, 04:09:45 AM
We are in as well :)

Me 28 and my wife 29 purchased our first and last home June 2012.

Value of our home according to Zillow 180K. We only paid 126K since it was a foreclosure and have a 30 year mortgage at 3.75%.
 
As of today we own $64,385.

Payoff goal: March 2015

My reason for paying the house fast is peace of mind because you never know what the future will hold.

New balance: $59,980

I miss judged my tax withholdings so I am not going to be able to pay as much on my mortgage next month :/

New balance: $55,556

little by little

New Balance: $51,171

New balance: $47270
Title: Re: Mortgage Payoff Club!!
Post by: Cassie on April 08, 2014, 05:11:47 PM
Allsummer long: you are doing an awesome job! Having our house paid off  helps me to sleep at night and helped me to be confident that we could actually retire.
Title: Re: Mortgage Payoff Club!!
Post by: serious_pete on April 17, 2014, 12:25:30 PM
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.
Title: Re: Mortgage Payoff Club!!
Post by: jrhampt on April 22, 2014, 12:30:47 PM
New balance: $143k

Bonuses next week!  Then we'll know how big this month's payment can be.  This time last year, we were at $203k, so we've made 60k progress over the past 12 months, and that was before we decided to really get serious about paying it off ASAP.

New balance: $123k

Sold some company stock after it vested, so this month will be another big payment.  Should be able to get it under $100k.  That will be the last of the unusually large payments this year, though.  Hoping to get into the mid-forties by the end of the year.

Agh.  Missed getting it under $100k by $85.  Forgot to account for property tax/escrow increase.  Have to wait until next month to lose that extra digit.

New balance: $100k. 
Title: Re: Mortgage Payoff Club!!
Post by: Davids on April 23, 2014, 08:06:28 PM
Love this, my goal is to have my house paid off by 2020 (bought in 2010). Currently have a mortgage balance of $144K (4.25% interest). I have been getting more aggressive the past year as well. Perhaps I will use this thread as well to post my progress.
Title: Re: Mortgage Payoff Club!!
Post by: medinaj2160 on May 02, 2014, 04:01:52 AM
We are in as well :)

Me 28 and my wife 29 purchased our first and last home June 2012.

Value of our home according to Zillow 180K. We only paid 126K since it was a foreclosure and have a 30 year mortgage at 3.75%.
 
As of today we own $64,385.

Payoff goal: March 2015

My reason for paying the house fast is peace of mind because you never know what the future will hold.

New balance: $59,980

I miss judged my tax withholdings so I am not going to be able to pay as much on my mortgage next month :/

New balance: $55,556

little by little

New Balance: $51,171

New balance: $47270

New balance: $43,868

Me and my wife changed our 401k contributions to max them out; there for principal payments for the rest of the year will be way smaller.
Title: Re: Mortgage Payoff Club!!
Post by: Rural on May 02, 2014, 05:34:01 AM
We are in as well :)

Me 28 and my wife 29 purchased our first and last home June 2012.

Value of our home according to Zillow 180K. We only paid 126K since it was a foreclosure and have a 30 year mortgage at 3.75%.
 
As of today we own $64,385.

Payoff goal: March 2015

My reason for paying the house fast is peace of mind because you never know what the future will hold.

New balance: $59,980

I miss judged my tax withholdings so I am not going to be able to pay as much on my mortgage next month :/

New balance: $55,556

little by little

New Balance: $51,171

New balance: $47270

New balance: $43,868

Me and my wife changed our 401k contributions to max them out; there for principal payments for the rest of the year will be way smaller.


With the interest rate on your mortgage, I think that's the wisest course for you to take. If it starts to get frustrating, look at the balance in your retirement accounts. :-)
Title: Re: Mortgage Payoff Club!!
Post by: shusherstache on May 04, 2014, 05:29:37 PM
So, even with the job change my paycheck is higher than expected thanks to free insurance (!) and other swanky benefits like free public transit.  The paycheck is still $500 lower every other week, but not the $800+ that we were expecting.  Yay! Between that and some unexpected checks we are still progressing, though slower originally than planned.  After DH is reimbursed from his travel later this month we will have another couple thou to throw at it.

Currently at: 38,600ish
Title: Re: Mortgage Payoff Club!!
Post by: Norrie on May 04, 2014, 09:20:34 PM
We're at $42,099. Well, I actually just threw another $100 at it because I couldn't stand seeing that $99 hanging out there. So just under $42K.

It's going to be a stretch to get it paid off by the end of August. A biiig stretch. But that's still our goal.
Title: Re: Mortgage Payoff Club!!
Post by: Alfred J Quack on May 05, 2014, 12:21:44 PM
We're at $42,099. Well, I actually just threw another $100 at it because I couldn't stand seeing that $99 hanging out there. So just under $42K.

It's going to be a stretch to get it paid off by the end of August. A biiig stretch. But that's still our goal.

Wow, just wow... You'll be paying off in a month about as much as I'm expecting to pay off this year (not for lack of trying though)...

Status 1-1-2014: 78k
Current status: 72.5k
Expecting go under 70k next month!

To be fair, I did use ~48% of my net income as extra principle...
Title: Re: Mortgage Payoff Club!!
Post by: Davids on May 06, 2014, 04:00:28 PM
My current mortgage balance is $141,500. Looking to have it at $138,500 next month.
Title: Re: Mortgage Payoff Club!!
Post by: frugalJD on May 08, 2014, 04:54:24 PM
I'm in on this.  Joined MMM forum because of it.  Great discussion, guys.

It's nice to share the motivation and hear from other's on the same mission.

My background:

- August 2012 (Age 28): purchased home for $321,400
- Original Mortgage balance: $250,400 (3.75%, 30 year fixed)
- Monthly mortgage payment: $1,160

- Current balance: $200,663

GOAL: Payoff by Fall 2019 (Age 35)

PLAN: Additional $2,200 to principal each month

My wife and I each contribute to 401k to the extent we max out our employer match.  We each have ROTH IRA which we contribute very little to so far, just opened them in December 2013. 

Emergency fund ~ 3 months livings expenses.  We would set aside more for an emergency fund but I work a Saturday job in addition to my full time.  If I were to lose my FT job, I am fortunate that I could pick up close to (if not) 40 hours /week at the Saturday job (never burn bridges!).

Like many others here, I highly value the peace of mind of being mortgage free and the zero risk involved in throwing extra money at a mortgage.

Keep up the good work!

-JD
Title: Re: Mortgage Payoff Club!!
Post by: McGeens on May 09, 2014, 04:03:18 AM
We're in for this challenge! In Australia interest rates are higher and not tax deductible so it makes good sense to squash the mortgage quick-sticks! We're 37 and 32yrs old.

Starting sum: $230k in 2007
Current: $87k

We've been aggressively paying it down for 3 years, since our son was born. We aim to have it cleared in 2 more years, at which point we will have saved $220k on interest. Unreal!!

I'm proud because we've done this on one FT and some part time salary, with lots of cost cutting badassity.
Title: Re: Mortgage Payoff Club!!
Post by: jrhampt on May 22, 2014, 02:43:42 PM
New balance: $143k

Bonuses next week!  Then we'll know how big this month's payment can be.  This time last year, we were at $203k, so we've made 60k progress over the past 12 months, and that was before we decided to really get serious about paying it off ASAP.

New balance: $123k

Sold some company stock after it vested, so this month will be another big payment.  Should be able to get it under $100k.  That will be the last of the unusually large payments this year, though.  Hoping to get into the mid-forties by the end of the year.

Agh.  Missed getting it under $100k by $85.  Forgot to account for property tax/escrow increase.  Have to wait until next month to lose that extra digit.

New balance: $100k.

New balance: $94k!  Nice to be under $100k finally. 
Title: Re: Mortgage Payoff Club!!
Post by: medinaj2160 on June 03, 2014, 11:00:34 AM
We are in as well :)

Me 28 and my wife 29 purchased our first and last home June 2012.

Value of our home according to Zillow 180K. We only paid 126K since it was a foreclosure and have a 30 year mortgage at 3.75%.
 
As of today we own $64,385.

Payoff goal: March 2015

My reason for paying the house fast is peace of mind because you never know what the future will hold.

New balance: $59,980

I miss judged my tax withholdings so I am not going to be able to pay as much on my mortgage next month :/

New balance: $55,556

little by little

New Balance: $51,171

New balance: $47270

New balance: $43,868

Me and my wife changed our 401k contributions to max them out; there for principal payments for the rest of the year will be way smaller.

New balance: $42750.

Title: Re: Mortgage Payoff Club!!
Post by: Davids on June 03, 2014, 04:01:28 PM
My current mortgage balance is $141,500. Looking to have it at $138,500 next month.
Update: My new balance is $138,300. Purposely threw in an extra $200 to beat my goal. My goal for next month is $135,000 balance.
Title: Re: Mortgage Payoff Club!!
Post by: medinaj2160 on June 11, 2014, 04:05:09 AM
We are in as well :)

Me 28 and my wife 29 purchased our first and last home June 2012.

Value of our home according to Zillow 180K. We only paid 126K since it was a foreclosure and have a 30 year mortgage at 3.75%.
 
As of today we own $64,385.

Payoff goal: March 2015

My reason for paying the house fast is peace of mind because you never know what the future will hold.

New balance: $59,980

I miss judged my tax withholdings so I am not going to be able to pay as much on my mortgage next month :/

New balance: $55,556

little by little

New Balance: $51,171

New balance: $47270

New balance: $43,868

Me and my wife changed our 401k contributions to max them out; there for principal payments for the rest of the year will be way smaller.

New balance: $42750.

Sold one of my cars and decided to send some money to the house.

New balance: $32750.

The goal is to pay the mortgage completely before I turn 30 in January... It is going to be difficult.
Title: Re: Mortgage Payoff Club!!
Post by: Jazzpolice on June 11, 2014, 06:03:50 PM
Very exciting with everyone working hard towards being mortgage free!

We have $7099 left and hoping to be done by August.  Can't wait!!  Even though we're a little older than some others on here…still better late than even later.
Title: Re: Mortgage Payoff Club!!
Post by: fitzgeralday on June 12, 2014, 02:52:40 PM
I started a quest to pay off my mortgage! I even created a blog to document my journey.

http://mortgage-payoff-club.com/ (http://mortgage-payoff-club.com/)

Who's with me?

Paying off our mortgages would certainly be badass. (I hope you enjoy the blog too)

I am so here for this!  I am aiming to have my mortgage paid off in the next 8 years and will be supporting your blog and mortgage payoff efforts :)
Title: Re: Mortgage Payoff Club!!
Post by: Strawberrykiwi75 on June 13, 2014, 03:44:33 AM
Started my loan at the beginning of March with 212k, now sitting at 204 :-) pretty happy with that starting effort in 2.5 months

Title: Re: Mortgage Payoff Club!!
Post by: nora on June 13, 2014, 05:54:31 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.
Title: Re: Mortgage Payoff Club!!
Post by: frugalJD on June 18, 2014, 06:09:09 PM
I'm in on this.  Joined MMM forum because of it.  Great discussion, guys.

It's nice to share the motivation and hear from other's on the same mission.

My background:

- August 2012 (Age 28): purchased home for $321,400
- Original Mortgage balance: $250,400 (3.75%, 30 year fixed)
- Monthly mortgage payment: $1,160

- Current balance: $200,663

GOAL: Payoff by Fall 2019 (Age 35)

PLAN: Additional $2,200 to principal each month

My wife and I each contribute to 401k to the extent we max out our employer match.  We each have ROTH IRA which we contribute very little to so far, just opened them in December 2013. 

Emergency fund ~ 3 months livings expenses.  We would set aside more for an emergency fund but I work a Saturday job in addition to my full time.  If I were to lose my FT job, I am fortunate that I could pick up close to (if not) 40 hours /week at the Saturday job (never burn bridges!).

Like many others here, I highly value the peace of mind of being mortgage free and the zero risk involved in throwing extra money at a mortgage.

Keep up the good work!

-JD

Update: down to $195.5k!

A few changes I've made in the past month or two in order to increase my badassity/effort to payoff the mortgage:

1. FINALLY signed up for a cash back credit card, and use it for every expense/purchase possible.  I 'm kicking myself for not doing this sooner!  Every little bit helps!

2. Learned about the commuter benefits available through my employer.  I get $100/month tax free to use towards public transportation.  This saves gas $ as well as serious wear and tear on my car (50 mile round trip commute).

Just when I think I'm doing everything I can to payoff the mortgage ASAP, I find new ways to work even harder at it. 

Love the forum, thanks to all.  I don't post much but I read often and appreciate the helpful insight and tips from the board.

-JD
Title: Re: Mortgage Payoff Club!!
Post by: theincurableapprentice on June 18, 2014, 07:57:03 PM
my husband and have about a year to go before we will have the extra cash to throw down on the mortgage.  I constantly think about what is the right move for us: paying down vs. investing.  So many good posts in this thread - I appreciate all the points of view. 

what I love about savings goals/paying off debt is you can choose to do what is right in the moment and change the strategy when needed. 
Title: Re: Mortgage Payoff Club!!
Post by: Neustache on June 21, 2014, 05:30:35 AM
I'm here!!

Starting Mortgage:  123K
Current Balance: 122K

Mortgage is at 4.25% with PMI, so while I may switch up strategies at some point, right now the goal is to get the PMI off as quickly as possible, hopefully by August 2015 (we only had 5% down).  If we don't switch strategies, goal is to pay this off in the next 3 or 4 years. 


I love seeing everyone else's progress on this thread. 
Title: Re: Mortgage Payoff Club!!
Post by: theincurableapprentice on June 25, 2014, 08:27:03 PM
I'm here!!

Starting Mortgage:  123K
Current Balance: 122K

Mortgage is at 4.25% with PMI, so while I may switch up strategies at some point, right now the goal is to get the PMI off as quickly as possible, hopefully by August 2015 (we only had 5% down).  If we don't switch strategies, goal is to pay this off in the next 3 or 4 years. 


PMI is on my mind as well - pay off all other debt first and then get rid of that pointless $118 fee that goes to waste every month.  I plan to get rid of it by December 2015.  Good luck to you :)

I love seeing everyone else's progress on this thread.
Title: Re: Mortgage Payoff Club!!
Post by: medinaj2160 on July 02, 2014, 05:53:09 AM
We are in as well :)

Me 28 and my wife 29 purchased our first and last home June 2012.

Value of our home according to Zillow 180K. We only paid 126K since it was a foreclosure and have a 30 year mortgage at 3.75%.
 
As of today we own $64,385.

Payoff goal: March 2015

My reason for paying the house fast is peace of mind because you never know what the future will hold.

New balance: $59,980

I miss judged my tax withholdings so I am not going to be able to pay as much on my mortgage next month :/

New balance: $55,556

little by little

New Balance: $51,171

New balance: $47270

New balance: $43,868

Me and my wife changed our 401k contributions to max them out; there for principal payments for the rest of the year will be way smaller.

New balance: $42750.

Sold one of my cars and decided to send some money to the house.

New balance: $32750.

The goal is to pay the mortgage completely before I turn 30 in January... It is going to be difficult.

New balance: $28,050

Omg so close, I probably own less money on my house than my coworkers paid for their cars lol.
Title: Re: Mortgage Payoff Club!!
Post by: jrhampt on July 02, 2014, 02:34:13 PM
New balance: $143k

Bonuses next week!  Then we'll know how big this month's payment can be.  This time last year, we were at $203k, so we've made 60k progress over the past 12 months, and that was before we decided to really get serious about paying it off ASAP.

New balance: $123k

Sold some company stock after it vested, so this month will be another big payment.  Should be able to get it under $100k.  That will be the last of the unusually large payments this year, though.  Hoping to get into the mid-forties by the end of the year.

Agh.  Missed getting it under $100k by $85.  Forgot to account for property tax/escrow increase.  Have to wait until next month to lose that extra digit.

New balance: $100k.

New balance: $94k!  Nice to be under $100k finally.

$84k!
Title: Re: Mortgage Payoff Club!!
Post by: cdub on July 02, 2014, 03:06:11 PM
Nice! I got hit by some serious medical bills so I need to rebuild the e-fund but this thread is inspiring me. I can't wait until I can start throwing money at the mortgage again.
Title: Re: Mortgage Payoff Club!!
Post by: basd on July 02, 2014, 03:07:45 PM
Good work everyone!

We'll finally be starting our payoff as well, first 10K will be paid this week. That will bring the remaining mortgage down to 228.500. We've started saving up this 10K in January after paying off the remainder of my student loans, so pretty happy with that. Especially since we're now with three instead of two in our household..

Seeing everybody's progress on here has been really motivating.
Title: Re: Mortgage Payoff Club!!
Post by: Davids on July 02, 2014, 06:34:39 PM
My current mortgage balance is $141,500. Looking to have it at $138,500 next month.
Update: My new balance is $138,300. Purposely threw in an extra $200 to beat my goal. My goal for next month is $135,000 balance.
My new balance is $134,900. Decided to throw in an extra $100 to beat my goal. Unfortunately I am not sure what next month will bring as this month will have some extra expenses (Auto insurance renewal and paying baby delivery bills). Also my wife will be going part time when her maternity leave ends at the end of this month so the next 6-9 months will have a slight wrinkle in putting in as much extra as we can toward the principal but we will still be putting as much extra as we can. 
Title: Re: Mortgage Payoff Club!!
Post by: tanhanivar on July 03, 2014, 10:50:23 PM
Joining the club!

Situation
I bought a house just above my budget in 2009, with a 30 year mortgage ($391k loan), single income. I felt bad only having a $20k deposit, but the bank said I was well above average in that. That was fixed-rate, and my income stagnated for those 5 years, but I paid the permitted extra $20k on top of the regular payments and saved up $25k for when I could get an offset account.

Now I owe $324,450. This is mostly fixed at 5.05% for 3 years. $46,100 is variable (5.08%), and set-off against my 100% offset account, which I try to keep over $25k.

Decision
Long-term, the jury is still out on pay-down vs invest. However, for at least the next 3 years my goal is to pay down as much as possible. At the end of the fixed-rate period, I can reassess pay-down vs buy a flat vs invest.

Goal
Based on current income, etc. I can aim to pay this off in 10 years with weekly repayments of $819 (from weekly income of $1,335) . I really, really want to pay it off before I'm 40 (i.e. 6 years), which should let me be FIRE by 45. I can't *quite* get the calculations to come out at less than 8 years. However I am not including side-income (or corresponding expenses), windfalls or further mustachian ratchetting in my calculations, so it's not impossible.

Latest payment
In June I paid $5478 on my mortgage, which is $3259 more than my minimum payments, and $1929 more than what I aim to pay! I don't expect to manage this every month. It was helped by five payment dates in the month and several side-business cheques coming in at once. But it has brought my forecasted repayment date down to 1 month less than 10 years. So hurrah!

Title: Re: Mortgage Payoff Club!!
Post by: commodore perry on July 06, 2014, 06:27:32 PM
I'm joining this club too! We just moved to a new state and I've gotten it in my head to pay off the mortgage as fast as we can for peace of mind and avoid interest!

I know on paper I could maybe make more investing but wife and I both max out our 401k's and make extra contributions to taxable accounts so it's really not an either-or thing. And with the past few years of returns in the market I don't feel the need to hold on to the mortgage just to put more in the market at this point. Guaranteed interest savings and peace of mind are worth it for me right now.

Purchase price = $248,000 Oct/2013 / financed $154,000; 15 year at 3.5%.
After most recent payment we owe $108,850...good bonus year helped!

Goal is to pay off by March 2016. 21 more payments - who's counting? :) I'll be 37. We'll save $37,500 in interest.
Title: Re: Mortgage Payoff Club!!
Post by: ltt on July 08, 2014, 06:58:33 PM
C'mon guys.  Let's apply some perspective here. 

It doesn't matter if keeping a mortgage and investing the balance can make you more money over the long haul.  Paying off a mortgage, if that's what someone wants to do, is an awesome accomplishment and deserves praise rather than criticism. 

Save the face punches for people who really need them!  I'm borderline on dishing out a few for being so focused on maximizing returns that we neglect to value and recognize tremendous savings accomplishments.

Not only that, it's just so freeing to not have to pay one more mortgage payment.
Title: Re: Mortgage Payoff Club!!
Post by: basd on July 09, 2014, 01:06:07 AM
Good work everyone!

We'll finally be starting our payoff as well, first 10K will be paid this week. That will bring the remaining mortgage down to 228.500. We've started saving up this 10K in January after paying off the remainder of my student loans, so pretty happy with that. Especially since we're now with three instead of two in our household..

Seeing everybody's progress on here has been really motivating.
Aaand... done. Feels good making that first payment and bringing down the monthly payment. Now it's time to save for the next 10K!
Title: Re: Mortgage Payoff Club!!
Post by: frizzywhiskers on July 11, 2014, 08:47:08 PM
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%
- 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.........!
Title: Re: Mortgage Payoff Club!!
Post by: libertarian4321 on July 12, 2014, 05:51:41 AM
Sorry, but unless you have a monstrously large stash, I think this is a poor investment decision. Borrow at 3.5% fixed for 30years. Put the overpayments into the sp500, et al.

Incorrect.

In THEORY, it may be a mildly bad investment decision from a pure numbers point of view.

But life doesn't always follow the theoretical numbers.

I paid my mortgage off early in the late '90s.  As you said, in THEORY, that was a "mistake."

In reality, I came out ahead, because the stock market essentially stagnated for years after I paid off my mortgage.

Many of the theoretical calculations you see are deeply flawed.  They calculate the "tax benefit" of holding a mortgage, but neglect the fact that one can get most of that deduction even without a mortgage (through the standard deduction).

These theoretical calculations also almost always neglect the psychological benefit of having paid off the mortgage.  Knowing you are 100% DEBT FREE is pretty important to some people- worth far more than a few THEORETICAL bucks one way or the other.

So I can't join the club.  I already paid off my mortgage years ago, and never regretted it for a minute. 

And honestly, even if the numbers had worked out the other way, and shown that I would have made a bit more money by holding mortgage debt, I wouldn't change my decision.  Call me a radical.  Call me crazy.  But I think owing NOTHING to anyone is fantastic.  Being completely debt free is a great feeling. 




Title: Re: Mortgage Payoff Club!!
Post by: frizzywhiskers on July 12, 2014, 01:14:41 PM
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%
- 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.........!


Happy to have another Canadian here! RE is crazy expensive where I live, too (BC). It feels so great to see that mortgage dwindle every month!

Weekly payments are a great idea! We've got semi monthly, but may change it up for the next period :)

Yep, crazy expensive is right!  Weekly payments make a huge difference.  Definately worthwhile to make the change.
Title: Re: Mortgage Payoff Club!!
Post by: Jazzpolice on July 12, 2014, 06:40:45 PM
$4000 left...will be all done in 3 weeks!  So close I can taste it :). Wahoooooo!!!!
Title: Re: Mortgage Payoff Club!!
Post by: Neustache on July 14, 2014, 09:34:08 AM

Starting Mortgage:  123K
Current Balance: 122K



Just made my first extra payment of $1300...new mortgage balance is $119,800.00
Title: Re: Mortgage Payoff Club!!
Post by: Neustache on July 14, 2014, 09:35:47 AM
$4000 left...will be all done in 3 weeks!  So close I can taste it :). Wahoooooo!!!!


YAY!!!  Jealous but happy for you at the same time. 
Title: Re: Mortgage Payoff Club!!
Post by: Jazzpolice on July 14, 2014, 08:34:58 PM
Thanks Neustache!  Keep up up with those extra payments and you'll be there before you know it...
Title: Re: Mortgage Payoff Club!!
Post by: Happyback on July 17, 2014, 01:50:28 PM
I just paid off my land 100% and now have ZERO debt in this world!
:D
Title: Re: Mortgage Payoff Club!!
Post by: Neustache on July 21, 2014, 03:50:04 PM
Congrats, Happyback!
Title: Re: Mortgage Payoff Club!!
Post by: Bob W on July 23, 2014, 09:39:33 AM
IMHO,  paying off a mortgage is the equivalent or paying your rent 30 years in advance.  Why in the world would I ever do that.   If it is some psychological need simply put your money into a REIT account and label it "paid off home."  Set up withdrawals to be automatic so you will never be writing a check or thinking about it.   

Paying off a mortgage = wussassity,   having the money to pay it off and investing it = baddassity. 

Here's a link that explains why paying off a mortgage or even owning a home is a bad idea.  http://www.dailyfinance.com/2014/07/19/the-worst-investment-you-can-make-buying-a-home/?cps=gravity

There is a nice calculator there that will help you evaluate renting vs buying.

Really, you could avoid restaurants,  never heat your home,  drive with the ac off and never drink a Starbucks and you wouldn't even be close to saving the money that paying off a mortgage early will cost you. 

It is a multimillion dollar decision.  One that most people will make with emotions rather than a calculator.

Some other food for thought -

Your home is too big --- shoot for 400 sq ft per person
Your home is too expensive  --- shoot for a home valued at no more than 2 times your annual income.
You live in an area that is too expensive --- rural Midwestern communities have housing at 1/3rd what the coasts do.
Your home owns you --- you don't own it.

If your serious about paying off your home  you should also pay off the maintenance, taxes and insurance 30 years in advance.   Most people would say that is crazy.   But then why pay your rent 30 years in advance?   

There seems to be a big contingent here on the forums in favor of paying off homes and owning homes in general.  For me owning a bigass or even smallass home is the equivalent of driving a Hummer clown car down the road.   It is the biggest consumerism item in the world.   I cry a little every time MMM is bragging about his uber expensive chunk of consumerism.   I feel sorry for him that he is too lazy to walk or bike to the park and insists on owning a home with a park in the back yard.  I shed tears for his engineering degree,  knowing that he is can't or won't do the simple math on mortgages vs. investing. 

Sorry to rain on your parade.
Title: Re: Mortgage Payoff Club!!
Post by: Mike2 on July 23, 2014, 02:06:08 PM
I'll join in on this.  Current mortgage is about $94k.  I pay an extra $350 a month towards the principle and if everything stayed the same it will be paid off in 10 years.  However, my goal is to have it paid off in a maximum of 8 years by throwing extra money at it.  I think the peace of mind of not having a mortgage will be huge and it really motivates me to pay it down.
Title: Re: Mortgage Payoff Club!!
Post by: Bob W on July 24, 2014, 11:02:36 AM
IMHO,  paying off a mortgage is the equivalent or paying your rent 30 years in advance.  Why in the world would I ever do that.   If it is some psychological need simply put your money into a REIT account and label it "paid off home."  Set up withdrawals to be automatic so you will never be writing a check or thinking about it.   

Paying off a mortgage = wussassity,   having the money to pay it off and investing it = baddassity. 

Here's a link that explains why paying off a mortgage or even owning a home is a bad idea.  http://www.dailyfinance.com/2014/07/19/the-worst-investment-you-can-make-buying-a-home/?cps=gravity

There is a nice calculator there that will help you evaluate renting vs buying.

Really, you could avoid restaurants,  never heat your home,  drive with the ac off and never drink a Starbucks and you wouldn't even be close to saving the money that paying off a mortgage early will cost you. 

It is a multimillion dollar decision.  One that most people will make with emotions rather than a calculator.

Some other food for thought -

Your home is too big --- shoot for 400 sq ft per person
Your home is too expensive  --- shoot for a home valued at no more than 2 times your annual income.
You live in an area that is too expensive --- rural Midwestern communities have housing at 1/3rd what the coasts do.
Your home owns you --- you don't own it.


If your serious about paying off your home  you should also pay off the maintenance, taxes and insurance 30 years in advance.   Most people would say that is crazy.   But then why pay your rent 30 years in advance?   

There seems to be a big contingent here on the forums in favor of paying off homes and owning homes in general.  For me owning a bigass or even smallass home is the equivalent of driving a Hummer clown car down the road.   It is the biggest consumerism item in the world.   I cry a little every time MMM is bragging about his uber expensive chunk of consumerism.   I feel sorry for him that he is too lazy to walk or bike to the park and insists on owning a home with a park in the back yard.  I shed tears for his engineering degree,  knowing that he is can't or won't do the simple math on mortgages vs. investing. 

Sorry to rain on your parade.


I'm not going to get in an argument with you over where one should put one's money. This topic has been thoroughly discussed in-depth elsewhere in the forum, and generally speaking people are divided.

You, of course, are able to put your cash wherever the heck you would like. As are we. Everyone's situation is unique, and we each have different priorities, goals, and abilities. Please do not presume to know ours or assume that we are not aware of what we are doing.

I'm being a complete jerk here, so please forgive me.

Of course everyone can spend money anywhere they like.   I always think to myself the point of this blog and the community is to help us make thoughtful informed decisions regarding the use of money.   I'm probably off base on that thinking.

It is just perplexing and frustrating to me that MMM will go on and on about the virtues of hacking cable,  not eating out and driving crappy cars and then give up 20K per year on the mortgage/investment split.   

Put me in the "have the money to pay it off,  never pay it off, but far more likely to rent camp" 

and good luck with your goal!

Title: Re: Mortgage Payoff Club!!
Post by: Alfred J Quack on July 26, 2014, 03:16:17 AM
I'm being a complete jerk here, so please forgive me.

Of course everyone can spend money anywhere they like.   I always think to myself the point of this blog and the community is to help us make thoughtful informed decisions regarding the use of money.   I'm probably off base on that thinking.

It is just perplexing and frustrating to me that MMM will go on and on about the virtues of hacking cable,  not eating out and driving crappy cars and then give up 20K per year on the mortgage/investment split.   

Put me in the "have the money to pay it off,  never pay it off, but far more likely to rent camp" 

and good luck with your goal!

You are entitled to your opinion as is everyone else. Personally, I think this specific topic is not the place to put this one though, we've got a mortgage (for better or worse) and have made the choice to pay it off ASAP and this topic is a big motivator for it. The fact that you are calling it a wussasity is counterproductive and I would ask you to refrain from such comments in this specific topic.

On that note, I just dropped my amount payed off to 55%. Maxed out for the year (any more and I will have to pay fines) so I won't be posting much here for a while :P
Title: Re: Mortgage Payoff Club!!
Post by: medinaj2160 on August 02, 2014, 10:28:33 AM
We are in as well :)

Me 28 and my wife 29 purchased our first and last home June 2012.

Value of our home according to Zillow 180K. We only paid 126K since it was a foreclosure and have a 30 year mortgage at 3.75%.
 
As of today we own $64,385.

Payoff goal: March 2015

My reason for paying the house fast is peace of mind because you never know what the future will hold.

New balance: $59,980

I miss judged my tax withholdings so I am not going to be able to pay as much on my mortgage next month :/

New balance: $55,556

little by little

New Balance: $51,171

New balance: $47270

New balance: $43,868

Me and my wife changed our 401k contributions to max them out; there for principal payments for the rest of the year will be way smaller.

New balance: $42750.

Sold one of my cars and decided to send some money to the house.

New balance: $32750.

The goal is to pay the mortgage completely before I turn 30 in January... It is going to be difficult.

New balance: $28,050

Omg so close, I probably own less money on my house than my coworkers paid for their cars lol.

Update time :)

New balance: $23,100
Title: Re: Mortgage Payoff Club!!
Post by: shusherstache on August 02, 2014, 10:44:35 AM
So, even with the job change my paycheck is higher than expected thanks to free insurance (!) and other swanky benefits like free public transit.  The paycheck is still $500 lower every other week, but not the $800+ that we were expecting.  Yay! Between that and some unexpected checks we are still progressing, though slower originally than planned.  After DH is reimbursed from his travel later this month we will have another couple thou to throw at it.

Currently at: 38,600ish

WIth the payment for August we should be down to 27,900 soon.

My mortgage company is so incompetent at dealing with principal payments that I am even more encouraged to pay this thing off.  The way they want to fix it is to gain access to debit my bank account - and with the fact that they have handled my payments correctly TWICE in the entire year they have had the account, there's no way in hell I trust them with more acess than I give them via paper check.

I'm now to the point where I walk the checks down to the bank branch close to work and they STILL mess it up every month, which results in me having to call them.
Title: Re: Mortgage Payoff Club!!
Post by: Happyback on August 02, 2014, 11:13:49 AM
I JUST PAID OFF MY MORTGAGE!  DONE!  NEVER AGAIN!! WHOOO HOOOOOOOO!!!!!!!!

I'ma gonna sleep sooooooo good tonight!
(*doin' a happy dance!*)
Title: Re: Mortgage Payoff Club!!
Post by: Rural on August 02, 2014, 12:06:35 PM
I JUST PAID OFF MY MORTGAGE!  DONE!  NEVER AGAIN!! WHOOO HOOOOOOOO!!!!!!!!

I'ma gonna sleep sooooooo good tonight!
(*doin' a happy dance!*)


Congratulations! Don't burn the real document, but it's officially okay to make a copy just for torching purposes...
Title: Re: Mortgage Payoff Club!!
Post by: Neustache on August 02, 2014, 12:19:03 PM
I JUST PAID OFF MY MORTGAGE!  DONE!  NEVER AGAIN!! WHOOO HOOOOOOOO!!!!!!!!

I'ma gonna sleep sooooooo good tonight!
(*doin' a happy dance!*)

Yay!  Congrats!
Title: Re: Mortgage Payoff Club!!
Post by: FIreDrill on August 02, 2014, 01:28:31 PM
I JUST PAID OFF MY MORTGAGE!  DONE!  NEVER AGAIN!! WHOOO HOOOOOOOO!!!!!!!!

I'ma gonna sleep sooooooo good tonight!
(*doin' a happy dance!*)

Awesome! Congrats :)
Title: Re: Mortgage Payoff Club!!
Post by: Cressida on August 02, 2014, 11:40:03 PM
I JUST PAID OFF MY MORTGAGE!  DONE!  NEVER AGAIN!! WHOOO HOOOOOOOO!!!!!!!!

I'ma gonna sleep sooooooo good tonight!
(*doin' a happy dance!*)

Congratulations, that is truly fantastic.
Title: Re: Mortgage Payoff Club!!
Post by: Davids on August 04, 2014, 04:18:57 PM
I JUST PAID OFF MY MORTGAGE!  DONE!  NEVER AGAIN!! WHOOO HOOOOOOOO!!!!!!!!

I'ma gonna sleep sooooooo good tonight!
(*doin' a happy dance!*)
I expect to be doing the happy dance in 4 years!
Title: Re: Mortgage Payoff Club!!
Post by: Davids on August 04, 2014, 04:22:33 PM
My current mortgage balance is $141,500. Looking to have it at $138,500 next month.
Update: My new balance is $138,300. Purposely threw in an extra $200 to beat my goal. My goal for next month is $135,000 balance.
My new balance is $134,900. Decided to throw in an extra $100 to beat my goal. Unfortunately I am not sure what next month will bring as this month will have some extra expenses (Auto insurance renewal and paying baby delivery bills). Also my wife will be going part time when her maternity leave ends at the end of this month so the next 6-9 months will have a slight wrinkle in putting in as much extra as we can toward the principal but we will still be putting as much extra as we can.
My new balance is $132,400. In addition to extra expenses of auto insurance renewal and the baby delivery bills we had to replace our hot water heater since it was leaking but I am still happy with what I put for extra even though it is not as much as I have lately been doing. With my wife working part time now with maternity leave ending we will see how much extra each month we can do. We should definitely though be under $130,000 for next month update!
Title: Re: Mortgage Payoff Club!!
Post by: tanhanivar on August 04, 2014, 08:00:47 PM
My annual pay rise turned out double what I calculated it to be (there were some other simultaneous changes which threw me). If I throw it all at the mortgage, that buys me an extra five months! With a very small effort, I may even get this down to 7 1/2 years after all.

I realised the other day that I have 6 1/2 years until I'm up for long service leave at the current job, so that is my new stretch goal: Paid off before I take long service leave.
Title: Re: Mortgage Payoff Club!!
Post by: ecmcn on August 05, 2014, 12:49:05 PM
RE the pay off vs invest argument, I think there's a middle way that can provide both piece of mind and maximum returns. Instead of, say, paying an extra $X/mo to pay off the mortgage in 15 years rather than 30, invest that money and earmark it for paying off the mortgage in 15 years. At any time you can compare your principal due to the value of that account and get the warm fuzzies knowing you're closer to the end of your mortgage. But you also get the financial advantages described elsewhere in this thread, and it allows for much more flexibility. You may find you can pay it off in 12 years, or perhaps you'll decide you're better off keeping the mortgage, etc.

I know it's a subtle change in outlook and isn't really that different from the "invest" side of the argument, but it works for me. Personally I would *love* the feeling of having my mortgage paid off, but my logical side can't escape the numbers, and this approach injects a little of the emotional element into the cold, hard finances.

Title: Re: Mortgage Payoff Club!!
Post by: gobius on August 05, 2014, 03:26:13 PM

Here's a link that explains why paying off a mortgage or even owning a home is a bad idea.  http://www.dailyfinance.com/2014/07/19/the-worst-investment-you-can-make-buying-a-home/?cps=gravity

There is a nice calculator there that will help you evaluate renting vs buying.

That is a cool calculator.

I live in the Midwest (a few hours from you).  Granted, you said the Midwest is cheaper, but the article is making assumptions such as buying a $350K house vs renting a similar place for 3/4 the mortgage payment.  Where I live, you can get a 15-year mortgage with a smaller payment (including insurance/taxes) than what someone pays in rent.  His assumptions would perhaps be good if you live in an area with a housing boom where the values of the homes have skyrocketed but people have options of renting from landlords who have owned their homes for awhile.  In the places where I have lived, that isn't the case (all are Midwest areas).  If his assumptions were true about the monthly payment, then all the landlords on this forum wouldn't be able to retire as early as they want.

When I put my assumptions into the calculator, it said I would break-even at $590/mo rent costs (living there 5 years).  I assumed 9% investment growth rate as well.  To rent the house where I live in, I would probably pay at least $700/mo (without including utilities).  According to the calculator, I would have to live in it for at least 3 years to beat that.  Sure, I used to rent an apartment that was less than $590/mo, but to fit my wife and me into it would yield less than the 400 SF/person you recommended.  About half that, actually.  That would be more mustachian I suppose, but since I'm at 80%+ savings rate I'm not that worried about it.  We also live in a house that is worth less than our combined annual salaries and allows us to bike almost everywhere.
Title: Re: Mortgage Payoff Club!!
Post by: guzzler on August 15, 2014, 06:09:34 PM
I am 33 years old. 

I have been in this debate with myself for past 6 years:  I have decided to pay off.  For piece of mind and simplicity.

I bought 2 homes:
1) 2008, Primary: 550K >> down to 385K >> refinanced to 15 years term.  2855 monthly payment, out of which almost 2K towards principal.
2) 2007, Investment: 120K >> paid off in 2 years.  Now the house is worth 250K

I cannot express in words how good it feels to OWN the house fully and to say that if I quit my job today I can live in that #2 house and live off my dividend income. 

Also renting vs buying calculators dont address this important fact:  Fixed payment for 30 years and no payment there after!!

No matter what you do, will need a house to live in, whether you are 20 or 90 years old.  If I can get a fixed monthly payment for next 30 years by having a mortgage it just makes sense.   Coz rent is gonna go up dramatically 30 years later say in 2044!!

See second table:
https://www.census.gov/hhes/www/housing/census/historic/grossrents.html

Take a look at 30 year diff in the past: 1970 and 2000:  Rents have gone up 6 times. 

If i decide not to buy because of some calculator and my rent today is 1000$, it will become 6000$ when i become 60.  At that i time I cannot afford that rent.





Title: Re: Mortgage Payoff Club!!
Post by: jrhampt on August 16, 2014, 11:17:15 AM
New balance: $143k

Bonuses next week!  Then we'll know how big this month's payment can be.  This time last year, we were at $203k, so we've made 60k progress over the past 12 months, and that was before we decided to really get serious about paying it off ASAP.

New balance: $123k

Sold some company stock after it vested, so this month will be another big payment.  Should be able to get it under $100k.  That will be the last of the unusually large payments this year, though.  Hoping to get into the mid-forties by the end of the year.

Agh.  Missed getting it under $100k by $85.  Forgot to account for property tax/escrow increase.  Have to wait until next month to lose that extra digit.

New balance: $100k.

New balance: $94k!  Nice to be under $100k finally.

$84k!

$79k, forgot to update last month.
Title: Re: Mortgage Payoff Club!!
Post by: tomsang on August 16, 2014, 11:50:24 AM

Also renting vs buying calculators dont address this important fact:  Fixed payment for 30 years and no payment there after!!

No matter what you do, will need a house to live in, whether you are 20 or 90 years old.  If I can get a fixed monthly payment for next 30 years by having a mortgage it just makes sense.   Coz rent is gonna go up dramatically 30 years later say in 2044!!

See second table:
https://www.census.gov/hhes/www/housing/census/historic/grossrents.html

Take a look at 30 year diff in the past: 1970 and 2000:  Rents have gone up 6 times. 

If i decide not to buy because of some calculator and my rent today is 1000$, it will become 6000$ when i become 60.  At that i time I cannot afford that rent.
Just a FYI.
The calculators do take this into account. If you have a paid off $600,000 house vs an investment account with $600k. At 4% you could pull out $2k a month in today's dollars for life for rent.  The stock market averages 7%+, so when you back off inflation that is where you get the 4%.

You listed rents from 1970 to 2000. If you also listed the stock market from that point in time you will see that you would be far ahead to invest vs having a paid off house.

Logically you can see that if your investments pay out greater than your mortgage rate then you would be better off keeping your mortgage and investing the difference.

Everyone should do what is best for them, I just wanted to clarify a few areas that you may have been mistaken.
Title: Re: Mortgage Payoff Club!!
Post by: guzzler on August 16, 2014, 02:48:19 PM
In theory it makes sense financially..  But in practice it doesnt work out.

I am left with constant stress and active involvement to make sure i get good returns for 60 years of my life:  25 to 85 age.

Also technically you would not be earning from your age 60-90 but rather withraw from your investments.  At that point your capital starts decling which may not provide you 6000$ for rent or at that point buying a home might not be an option either.
Title: Re: Mortgage Payoff Club!!
Post by: YeahNo on August 17, 2014, 07:44:41 PM
In theory it makes sense financially..  But in practice it doesnt work out.

I am left with constant stress and active involvement to make sure i get good returns for 60 years of my life:  25 to 85 age.



This is EXACTLY how I feel.
Title: Re: Mortgage Payoff Club!!
Post by: tomsang on August 17, 2014, 08:48:19 PM
Also technically you would not be earning from your age 60-90 but rather withraw from your investments.  At that point your capital starts decling which may not provide you 6000$ for rent or at that point buying a home might not be an option either.

I am not discounting emotions, but it might make sense to read up on investments and the 4%SWR. In most scenarios your Stache will grow. In the few worst case scenarios you will eat into principal, but that is the exception not the rule. In most scenarios your Stache will be greater than what you started with in real dollars. Play around with cfiresim. You might be shocked by the projected size of your stache based on historical returns.
Title: Re: Mortgage Payoff Club!!
Post by: Cassie on August 17, 2014, 11:18:03 PM
In another forum I participate in many older people including myself were commenting that many young MM's think it is wiser to invest because the returns have been so good for awhile but they have not lived thru the many long downturns. Many of us think that those that pay off the mortgage are the smartest!!
Title: Re: Mortgage Payoff Club!!
Post by: tomsang on August 18, 2014, 06:56:54 AM
In another forum I participate in many older people including myself were commenting that many young MM's think it is wiser to invest because the returns have been so good for awhile but they have not lived thru the many long downturns. Many of us think that those that pay off the mortgage are the smartest!!

Investment returns have been so good since 1929 or as long as we have financial models. There is no period of time where the market has performed less than 5% over a 25 to 30 year period. I was thinking about your comment and may flip your remark; that young people may have grown up in the worst economic times since 1929 and feel that the market is risky. The mortgage rates are at all time lows as the government is giving away free money to spark the economy. Even with this complete meltdown that we have witnessed in 2008, we have seen returns in excess of 8% over the past 10 years, 20 year and 30 years. Again if we don't earn greater than 6% over 30 years the 4% SWR does not work. 

MMM's shockingly simple math calc uses 5% after inflation. So if you are paying off a 4% mortgage you are pushing your retirement back from the calcs as MMM was using 7%+ for his investment returns. Also note that he kept his mortgage for several years after retiring until he said that he has so much money that he doesn't need the hassle to gain more.

Based on all of the historical returns since we started tracking them you would have beat a 4% mortgage over 20 or more years. So it isn't that the young whippersnappers don't have the wisdom, the facts when you look at them are clear that paying off a 3.5% mortgage is pushing back your retirement date, creating a situation where your net worth is tied up in an illiquid asset, where you are still responsible for your monthly mortgage payment until your mortgage is 100% paid off. A bank doesn't care if you prepaid your mortgage by $50k. They still want your payment.
Title: Re: Mortgage Payoff Club!!
Post by: Neustache on August 18, 2014, 09:39:48 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. 
Title: Re: Mortgage Payoff Club!!
Post by: Cassie on August 18, 2014, 05:33:51 PM
You will be done before you know it!!
Title: Re: Mortgage Payoff Club!!
Post by: RNwastash on August 18, 2014, 05:45:25 PM
I FINALLY got my act together and made my first prepayment of the principal.  I feel great!! Balance: $139,318.  Great job everyone.  I feel inspired reading your posts. :)
Title: Re: Mortgage Payoff Club!!
Post by: financialforager on August 20, 2014, 09:43:32 AM
I am trying to pay mine off in about 6 years. I am hoping to refinance to a 10 year and a lower rate soon. I am making extra payments of $800 a month towards the principal. I owe about $180,000. It will be such a great feeling to have no mortgage payment.
Title: Re: Mortgage Payoff Club!!
Post by: FunkyStickman on August 21, 2014, 07:24:35 AM
Homeowner's insurance went up on me, still have $66K left owed on principal. I'm seriously debating on dumping my savings and tax returns into it and paying it off in 4 years instead of 7.
Title: Re: Mortgage Payoff Club!!
Post by: medinaj2160 on September 02, 2014, 06:42:34 AM
We are in as well :)

Me 28 and my wife 29 purchased our first and last home June 2012.

Value of our home according to Zillow 180K. We only paid 126K since it was a foreclosure and have a 30 year mortgage at 3.75%.
 
As of today we own $64,385.

Payoff goal: March 2015

My reason for paying the house fast is peace of mind because you never know what the future will hold.

New balance: $59,980

I miss judged my tax withholdings so I am not going to be able to pay as much on my mortgage next month :/

New balance: $55,556

little by little

New Balance: $51,171

New balance: $47270

New balance: $43,868

Me and my wife changed our 401k contributions to max them out; there for principal payments for the rest of the year will be way smaller.

New balance: $42750.

Sold one of my cars and decided to send some money to the house.

New balance: $32750.

The goal is to pay the mortgage completely before I turn 30 in January... It is going to be difficult.

New balance: $28,050

Omg so close, I probably own less money on my house than my coworkers paid for their cars lol.

Update time :)

New balance: $23,100

New balance: $15,560

:) so close... I can't wait.
Title: Re: Mortgage Payoff Club!!
Post by: Davids on September 03, 2014, 08:10:43 PM
Quote
My new balance is $132,400. In addition to extra expenses of auto insurance renewal and the baby delivery bills we had to replace our hot water heater since it was leaking but I am still happy with what I put for extra even though it is not as much as I have lately been doing. With my wife working part time now with maternity leave ending we will see how much extra each month we can do. We should definitely though be under $130,000 for next month update!
My new balance is $129,000. Excellent month to say the least. My goal is to be under $120K by year end.
Title: Re: Mortgage Payoff Club!!
Post by: LLCoolDave on September 06, 2014, 04:02:46 PM
My mortgage balance just went under $20k. My last payment was $3800. I bought the house 5 years ago with a mortgage of $157k. I should be finished in January or February, my income fluctuates. I'm on the home stretch. Pun intended. Congrats to the posters who hit the milestone.
Title: Re: Mortgage Payoff Club!!
Post by: falcondisruptor on September 07, 2014, 02:56:39 PM
Add us to the pay down debt club!  Today I saw our balance under $100,000 for the first time, it feels great!  We're hoping to have it paid off in four years.
Title: Re: Mortgage Payoff Club!!
Post by: tanhanivar on September 07, 2014, 07:37:30 PM
As of this month, my debt is $318,000: $100,000 less than the house cost. My net position is $100,000 less than what I borrowed.

I feel like it's the first major milestone, and am hoping to be under $300k in debt ($275k net) by the end of April next year, and paid off (at this rate) by mid-2022.

I'd really like to knock at least another two years off that, and pay it off before I'm 40 and take long service leave.
Title: Re: Mortgage Payoff Club!!
Post by: Roland of Gilead on September 07, 2014, 07:41:23 PM
Paid off our loan.  Was $200,000 3 years ago, made extra payments and zeroed it out on Friday.
Title: Re: Mortgage Payoff Club!!
Post by: frizzywhiskers on September 08, 2014, 07:52:17 PM
Paid off our loan.  Was $200,000 3 years ago, made extra payments and zeroed it out on Friday.

Whoot!  Awesome job!  Big congratulations on that payoff!
Title: Re: Mortgage Payoff Club!!
Post by: falcondisruptor on September 21, 2014, 02:32:06 PM
Paid off our loan.  Was $200,000 3 years ago, made extra payments and zeroed it out on Friday.


Wooohooo!  Congratulations, that is huge!
Title: Re: Mortgage Payoff Club!!
Post by: Happy Little Chipmunk on September 21, 2014, 09:27:50 PM
Go Roland of Gilead!

We have been dabbling with this challenge; we've been paying extra but not focusing too much because we also want to be stashing cash in investments and our loan is pretty low at 3.25%. We have $107K left on a $126K loan. But we recently bought a "new to us" car. And in a most non-mushtachian move we financed part of it so we have an auto loan for the first time in 14 years.

I'm finding that adding consumer debt (even really low interest debt) makes me cranky, so we won't pay extra on the mortgage until I get the car paid off.

I hope to soon be back on track!
Title: Re: Mortgage Payoff Club!!
Post by: Herbert Derp on September 21, 2014, 11:01:35 PM
I gave the point plenty of thought and decided to pay cash for my condo. The way I see it, my FI was delayed for about a year, but now I am locked into a stable living situation with very low expenses. If I was renting, I would be paying at least $1,000/month + utilities for my location. With roommates, I could go a few hundred cheaper a month, but I would be hard pressed to beat what I'd be paying in dues + mortgage if I bought.

So basically, the cheapest options in my case were buy a condo and have my own apartment or rent and have roommates. There wasn't a significant financial difference between the two so I bought. Paying in cash was mostly a gut instinct decision: my thoughts on the matter are that I chose to make a safe investment at ~4.5% return rather than gamble with the stock market and hope I get over 4.5% (even though on average, this is very likely).

In any case, by the time I reach my 30s, my home equity will represent a relatively small percent of my net worth so I like to think of it as a nice little diversification in my investments.
Title: Re: Mortgage Payoff Club!!
Post by: medinaj2160 on October 02, 2014, 04:35:21 PM
We are in as well :)

Me 28 and my wife 29 purchased our first and last home June 2012.

Value of our home according to Zillow 180K. We only paid 126K since it was a foreclosure and have a 30 year mortgage at 3.75%.
 
As of today we own $64,385.

Payoff goal: March 2015

My reason for paying the house fast is peace of mind because you never know what the future will hold.

New balance: $59,980

I miss judged my tax withholdings so I am not going to be able to pay as much on my mortgage next month :/

New balance: $55,556

little by little

New Balance: $51,171

New balance: $47270

New balance: $43,868

Me and my wife changed our 401k contributions to max them out; there for principal payments for the rest of the year will be way smaller.

New balance: $42750.

Sold one of my cars and decided to send some money to the house.

New balance: $32750.

The goal is to pay the mortgage completely before I turn 30 in January... It is going to be difficult.

New balance: $28,050

Omg so close, I probably own less money on my house than my coworkers paid for their cars lol.

Update time :)

New balance: $23,100

New balance: $15,560

:) so close... I can't wait.

New balance: $10,550
Title: Re: Mortgage Payoff Club!!
Post by: secondcor521 on October 02, 2014, 09:45:56 PM
^ Looks like you're going to beat your March 2015 goal :-)
Title: Re: Mortgage Payoff Club!!
Post by: steveo on October 03, 2014, 02:30:12 AM
I have just under 100k owing at this point. I'd like to pay it off by the end of next year.
Title: Re: Mortgage Payoff Club!!
Post by: Pants on October 03, 2014, 03:07:16 AM
I need to join this thread :) I only got a mortgage a bit over a year ago for over $200,000 - probably huge by the US standards, but minuscule by Australian! Since finding MMM and doing a bit of thinking about mortgage pay off vs investing, I have decided to throw everything into the mortgage. Currently at 5.18% interest rate plus I feel like the peace of mind it will offer me is worth several percentage points on top of that. And the rates are expected to go up next year after a long pause at current levels...

Current balance $195,660 and I am hoping to pay it off in about 6 years (though that's being conservative).
Title: Re: Mortgage Payoff Club!!
Post by: Bytowner on October 03, 2014, 06:40:42 AM
After long debates with my partner in life, we settled on doubling our current weekly mortgage payments. We agreed that we prefer having the peace of mind of owning our house outright. Payment is now 17% interest, 83% capital instead of 35% interests, 65% capital.

Done in 7.5, or 6 if we drop an additional 17k$ per year. But I figure this will only happens if both our RRSP and TFSA are fully invested in.

When I bought the house a year ago, I figured I would have to pay mortgage payments for the next 25 years. No way I decided, I want to be done by 35.

Similar boat to you. We have a 30 year mortgage that I hope to pay off in under 8 years (I'm 30 now). I'm waffling back and forth between paying it off and chucking everything into our TFSAs and RRSPs. I know what the math says, and I doubt mortgage rates will be that much higher in 5 years when we need to refinance, but I'm having a really hard time putting money into this market with the S&P500 looking like it does. A big(ger) correction in October would make the decision a lot easier!
Title: Re: Mortgage Payoff Club!!
Post by: FunkyStickman on November 04, 2014, 08:25:29 AM
We still owe $64K, but back on track for paying it off in less than 7 years.

It makes me sick that we've actually only paid $24K on principal over the last 7 years.

Cannot wait to get this albatross off my neck.
Title: Re: Mortgage Payoff Club!!
Post by: medinaj2160 on November 08, 2014, 09:24:41 AM
We are in as well :)

Me 28 and my wife 29 purchased our first and last home June 2012.

Value of our home according to Zillow 180K. We only paid 126K since it was a foreclosure and have a 30 year mortgage at 3.75%.
 
As of today we own $64,385.

Payoff goal: March 2015

My reason for paying the house fast is peace of mind because you never know what the future will hold.

New balance: $59,980

I miss judged my tax withholdings so I am not going to be able to pay as much on my mortgage next month :/

New balance: $55,556

little by little

New Balance: $51,171

New balance: $47270

New balance: $43,868

Me and my wife changed our 401k contributions to max them out; there for principal payments for the rest of the year will be way smaller.

New balance: $42750.

Sold one of my cars and decided to send some money to the house.

New balance: $32750.

The goal is to pay the mortgage completely before I turn 30 in January... It is going to be difficult.

New balance: $28,050

Omg so close, I probably own less money on my house than my coworkers paid for their cars lol.

Update time :)

New balance: $23,100

New balance: $15,560

:) so close... I can't wait.

New balance: $10,550

New balance: $9,035

Finally in the 4 digits :) ... I think that I should be able to pay the house completely in January before turning 30 if everything goes well.

Will see what happens....
Title: Re: Mortgage Payoff Club!!
Post by: eyePod on November 12, 2014, 08:39:28 AM
OK, I'll bite. I'm not sure how quickly we'd like to pay of our mortgage, but here's our stats.

Mortgage started at 223,200 in June 2014. We are paying PMI to the tune of $80 a month. We plan on keeping this in our monthly mortgage payment since we're used to it.

It's now November, and to date, we are at $217,524.10. So that's $5,675.90 off of principal in the first 5 months. I wish we could keep that pace.

We've been able to do this in sort of a two-pronged approach.

1 is our dependent care from work, I get 5k that's removed throughout the year and when it comes back, it automatically goes to principal - wife and I agreed about this.

Other miscellaneous non-allocated money at the end of the month is also going to principal.

Things that we've saved up for since we got in our home include: new carpet upstairs, new carpet in the basement (only one rooms worth), and new furniture for my daughter.

For general house repairs and the like, including major appliances, we're trying to only use money from my eBay side business. Currently, we've put away ~1500, and that will keep going up. This is for replacement of the hot water heater, furnace, and hvac system since they're all pretty old. We do have a home warranty through June, but we feel pretty good about all of this.

Sorry for the novel, but I really love the idea of not having to make these types of payments in the future. Probably would like to hit FI around/before 40 (11 years from now), and we would love to pay off the house before then too. Currently have cut off (with the $80 continuing) ~25k on the total amount paid and 43 months. This is 15 years further out from my 40th, so we have some work to do.
Title: Re: Mortgage Payoff Club!!
Post by: frugalJD on November 12, 2014, 12:03:34 PM
I'm in on this.  Joined MMM forum because of it.  Great discussion, guys.

It's nice to share the motivation and hear from other's on the same mission.

My background:

- August 2012 (Age 28): purchased home for $321,400
- Original Mortgage balance: $250,400 (3.75%, 30 year fixed)
- Monthly mortgage payment: $1,160

- Current balance: $200,663

GOAL: Payoff by Fall 2019 (Age 35)

PLAN: Additional $2,200 to principal each month

My wife and I each contribute to 401k to the extent we max out our employer match.  We each have ROTH IRA which we contribute very little to so far, just opened them in December 2013. 

Emergency fund ~ 3 months livings expenses.  We would set aside more for an emergency fund but I work a Saturday job in addition to my full time.  If I were to lose my FT job, I am fortunate that I could pick up close to (if not) 40 hours /week at the Saturday job (never burn bridges!).

Like many others here, I highly value the peace of mind of being mortgage free and the zero risk involved in throwing extra money at a mortgage.

Keep up the good work!

-JD

Update: down to $195.5k!

A few changes I've made in the past month or two in order to increase my badassity/effort to payoff the mortgage:

1. FINALLY signed up for a cash back credit card, and use it for every expense/purchase possible.  I 'm kicking myself for not doing this sooner!  Every little bit helps!

2. Learned about the commuter benefits available through my employer.  I get $100/month tax free to use towards public transportation.  This saves gas $ as well as serious wear and tear on my car (50 mile round trip commute).

Just when I think I'm doing everything I can to payoff the mortgage ASAP, I find new ways to work even harder at it. 

Love the forum, thanks to all.  I don't post much but I read often and appreciate the helpful insight and tips from the board.

-JD

Update: down to $176.2k come this Friday.  Aiming for a payoff date of Sept 2018.  Keep going strong, fellow M's.
Title: Re: Mortgage Payoff Club!!
Post by: YeahNo on November 13, 2014, 02:17:45 PM
Glad to find you guys. I'm of the same exact mindset...the freedom of being completely debt free completely outweighs "the math" of not paying off and investing the money. Gaining an extra point or two changes my life very minimally, paying off my mortgage transforms my life.

Thanks frugalJD for the template ;)

My background:

September 2011 (Age 29): purchased home for $325,000
Original Mortgage balance: $260,000 (4.25%, 30 year fixed)
Original Monthly mortgage payment: $1,726.87
Original Extra Principal Paydown: $500/month
Original Payment frequency: Monthly

Current balance: $211,197.92
Current Payment frequency: Bi-Weekly
Current Monthly Mortgage Payment: $1,868.30
Current Extra Principal Paydown: $1,631.70/month + 2 months a year where an extra $1,750 each month goes in

GOAL: I am a business owner so there are periods where my income is stable and periods where it fluctuates. If we have a good 6 month run I could take a distribution that would pay off 1/2 the remaining balance in one shot. At the same time, if the money isn't there I will continue getting my monthly paychecks and making the "current" numbers from above work. I'd really like to have this beast paid of within 2 years, age 35.

PLAN: Keep routine "current" plans, use extra business income to pay down big chunks of principal.

Side note: We own 50% of a rental townhouse. We saved up to finally pay off the remaining ~$40k on that mortgage. We did get a little taste of the "no mortgage" freedom with that. It gave us a $600 swing in cash flow each month.

My wife and I each max out 401(k).  We are above income thresholds for IRAs. Max out HSA for family of $6500.

Emergency fund - None. We will use funds in checking account and/or credit cards for immediate needs(<72 hours). After that would sell some stock and transfer funds to checking account.

Very curious to know what it feels like to have literally 0 debt.






Title: Re: Mortgage Payoff Club!!
Post by: Threshkin on November 14, 2014, 08:08:31 AM
Glad to find you guys. I'm of the same exact mindset...the freedom of being completely debt free completely outweighs "the math" of not paying off and investing the money. Gaining an extra point or two changes my life very minimally, paying off my mortgage transforms my life.

...clip...

Very curious to know what it feels like to have literally 0 debt.

It feels GREAT!  Congratulations on your excellent progress!
Title: Re: Mortgage Payoff Club!!
Post by: jrhampt on November 18, 2014, 04:42:04 AM
Mortgage mutilated.  Struck the final death blow last week - totally debt free.
Title: Re: Mortgage Payoff Club!!
Post by: Primm on November 18, 2014, 04:54:13 AM
Mortgage mutilated.  Struck the final death blow last week - totally debt free.

Awesome work!
Title: Re: Mortgage Payoff Club!!
Post by: FunkyStickman on November 18, 2014, 08:01:53 AM
My hours got cut back at work, it will end up costing me about $600 a month, which is what we were using to pay off the mortgage. Will probably put my Christmas bonus on it, and most if not all of my tax return. So still not doing badly, but kind of irritated I have to push it back a few months.

Current balance is $64K.
Title: Re: Mortgage Payoff Club!!
Post by: jrhampt on November 18, 2014, 11:16:40 AM
Mortgage mutilated.  Struck the final death blow last week - totally debt free.

Amazing! Congrats!

I hope to be in your shoes in 4.5 years :)

Thanks!  Took us just over 6 years; still can't believe it's all gone.
Title: Re: Mortgage Payoff Club!!
Post by: serious_pete on November 20, 2014, 12:56:10 PM
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!
Title: Re: Mortgage Payoff Club!!
Post by: frizzywhiskers on November 20, 2014, 07:44:04 PM
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
Title: Re: Mortgage Payoff Club!!
Post by: Neustache on November 21, 2014, 06:20:25 AM
I'm so happy for you all!  I've had to take a break due to some major house repairs (foundation !!! and new roof on the rental) so I probably won't be able to do much for the next 8 months or so.  Just wanted to say "Congrats!" to those making progress and a "WOOOOOT" to those paying off their mortgages.  So cool!
Title: Re: Mortgage Payoff Club!!
Post by: Neustache on November 21, 2014, 07:28:58 AM
Nice!  Our kids will know about our payoff, too, and we plan to cement it in their minds with a WDW trip.  I want them to forever remember going to WDW as a result of "Mom and Dad paid off their mortgage" which will make the trip very special for us and hopefully they'll assume that paying off a mortgage with young kids is just what people do.  :D

 (no face punches, please, I intend on making this celebration trip as mustachian as possible by utilizing points/card churning when it happens!)
Title: Re: Mortgage Payoff Club!!
Post by: Neustache on November 21, 2014, 08:14:55 AM
LOL!  Are you millionaires?  If not, I think you will be in short order!
Title: Re: Mortgage Payoff Club!!
Post by: mnsaver on November 23, 2014, 08:07:39 PM
Hello,

   I'm a new member and have been mostly frugal my entire life. I'd working on stepping up my game. I bought a condo in July and want it paid off in now less than 20 years (can probably do 15)

Starting date Sept 2014 Age 34 108750 (I put 25% down)
payment is 534 per month, paying an extra 66 + toward principle each month
due to my parents giving me money has a housewarming present + OT mortgage is currently 107,000
payoff date has gone from 8/1/44 to 12/1/43. Will pay an extra 250 next month.

At my job I regularly have OT and I save 40% of that in a separate fund to eventually pay off my condo. Due to health issues and the fact that I'm single I feel better with a larger emergency fund. I would like it to be about 2 years worth. Currently it is about 13 months worth. My goal for next year is to get it to 18 months + get balance of mortgage to less then 102,000.

Currently contribute 7% for 401K (and my employer gives a 6% match!) I have about 80,000 in retirement funds.
Title: Re: Mortgage Payoff Club!!
Post by: shusherstache on December 01, 2014, 06:33:04 PM
We're down to 16 and some change.

I was sitting there tonight writing the check to physically take to my mortgage provider (they have mucked up every payment I have ever mailed in) and I finally decided I'm tired of it.  We get no deduction next year on our mortgage interest and so we have decided to bite the bullet and knock the last barnacle off.  Waiting on the payoff amount to show up tomorrow and then the check's on the way.  (Or, delivered in person, more likely.)
Title: Re: Mortgage Payoff Club!!
Post by: jordanread on December 03, 2014, 06:40:09 AM
We're down to 16 and some change.

I was sitting there tonight writing the check to physically take to my mortgage provider (they have mucked up every payment I have ever mailed in) and I finally decided I'm tired of it.  We get no deduction next year on our mortgage interest and so we have decided to bite the bullet and knock the last barnacle off.  Waiting on the payoff amount to show up tomorrow and then the check's on the way.  (Or, delivered in person, more likely.)

When you do deliver it in person, I must insist that you do something like this:

(https://d12edgf4lwbh8j.cloudfront.net/photo/image/gif-happy-dance.gif)
Title: Re: Mortgage Payoff Club!!
Post by: medinaj2160 on December 03, 2014, 05:33:55 PM
We are in as well :)

Me 28 and my wife 29 purchased our first and last home June 2012.

Value of our home according to Zillow 180K. We only paid 126K since it was a foreclosure and have a 30 year mortgage at 3.75%.
 
As of today we own $64,385.

Payoff goal: March 2015

My reason for paying the house fast is peace of mind because you never know what the future will hold.

New balance: $59,980

I miss judged my tax withholdings so I am not going to be able to pay as much on my mortgage next month :/

New balance: $55,556

little by little

New Balance: $51,171

New balance: $47270

New balance: $43,868

Me and my wife changed our 401k contributions to max them out; there for principal payments for the rest of the year will be way smaller.

New balance: $42750.

Sold one of my cars and decided to send some money to the house.

New balance: $32750.

The goal is to pay the mortgage completely before I turn 30 in January... It is going to be difficult.

New balance: $28,050

Omg so close, I probably own less money on my house than my coworkers paid for their cars lol.

Update time :)

New balance: $23,100

New balance: $15,560

:) so close... I can't wait.

New balance: $10,550

New balance: $9,035

Finally in the 4 digits :) ... I think that I should be able to pay the house completely in January before turning 30 if everything goes well.

Will see what happens....

New balance: $6,011

So close....
Title: Re: Mortgage Payoff Club!!
Post by: Primm on December 04, 2014, 03:20:51 AM
Oooh, so so SO close!
Title: Re: Mortgage Payoff Club!!
Post by: Alfred J Quack on December 04, 2014, 12:50:15 PM
Mortgage mutilated.  Struck the final death blow last week - totally debt free.

Awesome!! Congrats!~!

It's almost January which means I can pick up again. Saved up a bunch too so I'll probably schedule a payment to clear on the 2nd of jan! Current balance is just under 53k, on the 2nd of january it'll be 49k hopefully, jay \o/
Title: Re: Mortgage Payoff Club!!
Post by: BBub on December 05, 2014, 02:11:01 PM
Joining to follow.  Current mortgage 15yr $112k @ 3.625%.  Not paying real aggressively as it's our only remaining debt, and our main focus is building the stash for the time being.  But I'm all about some debt payoff - spreadsheets be damned.  Once I hit a certain number in assets I will put every next cent into annihilating the mortgage.  My current projections place me on schedule to simultaneously hit my FI number and achieve pay off in 8 yrs. But I may pivot mid-course and decide to curb stomp the mortgage.  Who knows.  For now I'm just coming out of lurker status on this thread & will periodically post numbers and congrats going forward.
Title: Re: Mortgage Payoff Club!!
Post by: jordanread on December 05, 2014, 05:13:05 PM
Our goal was $150k by Dec 2014. In Nov we were at $156k.

Yesterday we brought it down to $149k! We met our goal, and are actually going to bring it down to hopefully $145 (or even less!) in the next month.

I am so pleased that our determined efforts are making such a difference. Our ~4 year goal is within reach, for sure!

Congrats to medinaj2160 and shusherstache! great job!

Damn!!! A $148,855 payment in the next month? I hope you have a really high interest rate, otherwise it doesn't seem worth it. :P
Title: Re: Mortgage Payoff Club!!
Post by: shusherstache on December 08, 2014, 07:03:04 PM
So we walked in to our CU on Saturday and sent off the death blow via wire transfer.  I still don't trust the mortgage company to acknowledge receipt of the transfer nor apply it correctly to our account as they have yet to do anything correctly in the two years since they bought our mortgage, so I'm waiting until Wednesday and then giving them a call. 

On the other hand, it feels awesomely freeing to have no debt to anyone in the world.
Title: Re: Mortgage Payoff Club!!
Post by: hdatontodo on December 08, 2014, 07:27:11 PM
So we walked in to our CU on Saturday and sent off the death blow via wire transfer.  I still don't trust the mortgage company to acknowledge receipt of the transfer nor apply it correctly to our account as they have yet to do anything correctly in the two years since they bought our mortgage, so I'm waiting until Wednesday and then giving them a call. 

On the other hand, it feels awesomely freeing to have no debt to anyone in the world.

That must feel great. Congratulations.

We've gone from $166K to $99K in 2014. For my plan to work, for a payoff at the end of 2016, the Mrs and I have to manage to pay off $50K/year, via a monthly extra principal payment plus a $10K single payment each year. My job is on very shakey ground, and if it goes away when I'm in my mid-50's, we'll have to switch back to normal payments for more years than that.
Title: Re: Mortgage Payoff Club!!
Post by: Money Badger on December 09, 2014, 08:13:12 PM
Hi all!   Loving the thread and what it means to be able to stop being "owned" by the bank!    Mrs. Indentured and I have the goal of payoff in 5 years on a $249k mortgage without gutting our current stash.    Big challenge for sure but have the kids college accounts already funded and just made the Baddass moves to eliminate the easy list of stupid expenses other debt and free up cash flow.    The goal is to apply chunks from annual bonuses these years totalling of $75k PLUS $40k a year in principal from investments and salary.   Right now, I only know how to make half of that amount happen...   Dont care though because this community can make it happen!
Title: Re: Mortgage Payoff Club!!
Post by: birdman2003 on December 13, 2014, 03:17:46 AM
My original mortgage was for $70k in 2012 (15 years @ fixed 3%) and now I think the principal balance is somewhere around $65k.  Obviously I have never made extra payments.  I think I will do that next year as I have extra monies not spoken for!

Thanks for the jumpstart to do this!
Title: Re: Mortgage Payoff Club!!
Post by: Davids on December 13, 2014, 07:39:04 AM
Update from me is I am at $119,900. My goal was to be at $120K by year end and I threw in an extra $100 just to purposely beat it.
Title: Re: Mortgage Payoff Club!!
Post by: WynnDuffy73 on December 13, 2014, 10:28:47 AM
I'm going to implement a slightly different mortgage payoff strategy.

My goal is to have liquid assets greater than my mortgage balance within the next 16 months.

Our mortgage balance is currently $171k and our liquid(non retirement) assets are currently $112k.

Once I hit that tipping point in 16 months i will make the final decision whether to retire the mortgage and become completely debt free.  Just the thought of being completely debt free within 16 months is already providing incredible peace of mind. 

We have a double income family and once the mortgage is gone in 16 months only one income will be needed essentially forever.  Next up after that will be complete financial independence.
Title: Re: Mortgage Payoff Club!!
Post by: brooklynmoney on December 14, 2014, 02:49:24 PM
WynnDuffy73 -- I did that last year. It felt good to get to the point that if I need to I can pay off the mortgage. I would have almost nothing left in my taxable accounts, but still a decent sized stache in retirement accounts.
Title: Re: Mortgage Payoff Club!!
Post by: frugalJD on December 17, 2014, 12:06:56 PM
Update: Just made our final additional payment for 2014 of $3k.  Balance is now $172.6 ($250k starting).  Shooting for $130k by end of 2015!

-JD
Title: Re: Mortgage Payoff Club!!
Post by: McGeens on December 18, 2014, 05:11:29 AM
We're in this club and incredibly excited that 2015 should be our last year with a mortgage- yippee! We started owing $230k in 2008 and currently owe $57k. With a big effort this will be cleared by dec '15. We're a 1.5 income family with two young kids, so really happy to be on the path to FI once it's cleared. Incidentally, we're in Australia and the house value is now $450k+, which still feels like Monopoly money to me!
Title: Re: Mortgage Payoff Club!!
Post by: Money Badger on December 18, 2014, 06:44:55 PM
Mrs. Indentured and I have the goal of payoff in 5 years on a $249k mortgage without gutting our current stash. 
Baby step here so humor me and treat me like I just walked for the first time...

Balance was actually just under $250K.   Now under $248,500 with this payment.   Mulling a chunk payment depending on annual bonus (maybe?)
Title: Re: Mortgage Payoff Club!!
Post by: mnsaver on December 19, 2014, 07:54:59 PM
Hello,

   I'm a new member and have been mostly frugal my entire life. I'd working on stepping up my game. I bought a condo in July and want it paid off in now less than 20 years (can probably do 15)

Starting date Sept 2014 Age 34 108750 (I put 25% down)
payment is 534 per month, paying an extra 66 + toward principle each month
due to my parents giving me money has a housewarming present + OT mortgage is currently 107,000
payoff date has gone from 8/1/44 to 12/1/43. Will pay an extra 250 next month.

At my job I regularly have OT and I save 40% of that in a separate fund to eventually pay off my condo. Due to health issues and the fact that I'm single I feel better with a larger emergency fund. I would like it to be about 2 years worth. Currently it is about 13 months worth. My goal for next year is to get it to 18 months + get balance of mortgage to less then 102,000.

Currently contribute 7% for 401K (and my employer gives a 6% match!) I have about 80,000 in retirement funds.

Mortgage balance is currently 10653.98 and payoff date (assuming no extra payments) is 10/1/43. I was offered and accepted a promotion to another department. It comes with a 10% raise! It is close enough that I will walk and can drop my bus pass (currently 76 a month. I will have 20 put on a stored value card. This will be 80% of my transportation costs)

This department doesn't have much OT but the raise is more then I've ever made in OT. I can spend some of my free time working on some of the computer skills to improve my prospects for future promotions :)

I'll be able up my 401k to 10%. For the first year at least my plan is to put all of my raise in saving so give myself an extra cushion.
Title: Re: Mortgage Payoff Club!!
Post by: frizzywhiskers on December 20, 2014, 09:00:42 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!
Title: Re: Mortgage Payoff Club!!
Post by: FunkyStickman on December 23, 2014, 06:57:24 AM
End of year report:
Started the year with a principal balance of $72,206 (started with $81,900 seven years ago and have gotten it down to $62,973.

I have knocked my principal down about as much in one year as I did the previous six.

Here's to early retirement, folks. Happy new year!
Title: Re: Mortgage Payoff Club!!
Post by: APowers on December 25, 2014, 11:38:46 AM
Started 4.5 years ago:

$68,800
3%

Minimum payment = 290.06

We started out paying the exact amount, and after a while we decided to just pay an even 300. After a while we decided we didn't want to be paying this for 30 years, so we dumped about $16k from savings into it (leaving us with about $8-10k in the bank). After that, we upped our payment to $750, and a couple months later we bumped it to an even $800-- which has been our payment for the last 3 years.

There's $22,512 remaining at this point (we already paid for December). We've got $18k saved up and should be able to squirrel away enough to match the balance remaining by February or March of 2015. I will be extremely happy once that payment is gone. Without having to pay the mortgage, our monthly expenses will be $1,100 or less, and I will be able to quit my soul-sucking job, and will be able to handily pay the bills, save a good bit, and have a bunch of free time to be productive in other income-producing areas that aren't (bad)stressful. Also to not be working 7 days/week will be very restful.
Title: Re: Mortgage Payoff Club!!
Post by: NEMPLS on December 27, 2014, 03:52:00 PM
11 months left! Last payment December 2014. No plans to pay it off any earlier now that we are paying about 95% principal on our monthly payments.

As a back story; 14 years ago we sold our previous 3,000 SF home to purchase a 1,500 SF home in order to lower our payments, Because of downsizing we halved the total amount we owed just by selling and moving. Our payment went down by a third, our utilities went down by half, our taxes went down by 60% per year (old house $7,600 year current house 3,100 per year), our yearly up keep went down by a third. The math on how much we saved in housing related costs is staggering.

We were going to take most of the cash that we made from the sale and bank it but the closing paperwork got messed up and we ended up paying our current house down to a 18 year mortgage just so we could close that day (it was the single best thing that could have happened). We have refinanced twice over the past 14 years using no cost refinancing to lower our payments and then payed a little extra each year to bring our time down from 18 years to 14 years while saving a bit in interest.

The best news is that we invested ALL of the money saved by downsizing into mutual funds and are now thinking of retiring soon or at least working part time.
Title: Re: Mortgage Payoff Club!!
Post by: ontario74 on December 27, 2014, 06:13:56 PM
Project pay off year: 2020, right before my child goes to university

135K to go, with 7K in extra payments yearly
Title: Re: Mortgage Payoff Club!!
Post by: medinaj2160 on January 03, 2015, 07:26:22 AM
We are in as well :)

Me 28 and my wife 29 purchased our first and last home June 2012.

Value of our home according to Zillow 180K. We only paid 126K since it was a foreclosure and have a 30 year mortgage at 3.75%.
 
As of today we own $64,385.

Payoff goal: March 2015

My reason for paying the house fast is peace of mind because you never know what the future will hold.

New balance: $59,980

I miss judged my tax withholdings so I am not going to be able to pay as much on my mortgage next month :/

New balance: $55,556

little by little

New Balance: $51,171

New balance: $47270

New balance: $43,868

Me and my wife changed our 401k contributions to max them out; there for principal payments for the rest of the year will be way smaller.

New balance: $42750.

Sold one of my cars and decided to send some money to the house.

New balance: $32750.

The goal is to pay the mortgage completely before I turn 30 in January... It is going to be difficult.

New balance: $28,050

Omg so close, I probably own less money on my house than my coworkers paid for their cars lol.

Update time :)

New balance: $23,100

New balance: $15,560

:) so close... I can't wait.

New balance: $10,550

New balance: $9,035

Finally in the 4 digits :) ... I think that I should be able to pay the house completely in January before turning 30 if everything goes well.

Will see what happens....

New balance: $6,011

So close....

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
Title: Re: Mortgage Payoff Club!!
Post by: Groovin Old Hippie on January 03, 2015, 05:38:10 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  :)

Title: Re: Mortgage Payoff Club!!
Post by: Money Badger on January 04, 2015, 08:08:24 AM
@medinaj...,   Congratulations!!!!  You now get to start the "Paid off the mortgage, now what?!" thread where you brag about increasing passive income with your freed-up active income!   :)
Title: Re: Mortgage Payoff Club!!
Post by: Peacefulwarrior on January 06, 2015, 01:17:31 PM
Sorry, but unless you have a monstrously large stash, I think this is a poor investment decision. Borrow at 3.5% fixed for 30years. Put the overpayments into the sp500, et al.

If this was such a great idea, don't you think the banks would put all their money into S&P500 instead of lending it to you?
Title: Re: Mortgage Payoff Club!!
Post by: tomsang on January 06, 2015, 05:43:09 PM
Sorry, but unless you have a monstrously large stash, I think this is a poor investment decision. Borrow at 3.5% fixed for 30years. Put the overpayments into the sp500, et al.

If this was such a great idea, don't you think the banks would put all their money into S&P500 instead of lending it to you?

In the US Banks are regulated on the amount of money that they have in each investment bucket.  The reason that they make great money is that they can borrow from the government and depositors at a rate of 10+ times equity.  If they took the money, then the government would not allow them to be as leveraged, which would eat into their profits.
Title: Re: Mortgage Payoff Club!!
Post by: h2ogal 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!

Title: Re: Mortgage Payoff Club!!
Post by: Alfred J Quack 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...
Title: Re: Mortgage Payoff Club!!
Post by: steveo 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.
Title: Re: Mortgage Payoff Club!!
Post by: asauer 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.
Title: Re: Mortgage Payoff Club!!
Post by: nora 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%!
Title: Re: Mortgage Payoff Club!!
Post by: Neustache 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.
Title: Re: Mortgage Payoff Club!!
Post by: Money Badger 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 $.
Title: Re: Mortgage Payoff Club!!
Post by: asauer 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!
Title: Re: Mortgage Payoff Club!!
Post by: jordanread 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 (http://www.mrmoneymustache.com/2015/01/21/mortgage-freedom/) 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.
Title: Re: Mortgage Payoff Club!!
Post by: jordanread on January 23, 2015, 10:44:48 AM

Well, Mr. Frugal Toque kind of agrees (http://www.mrmoneymustache.com/2015/01/21/mortgage-freedom/) 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.
Title: Re: Mortgage Payoff Club!!
Post by: Lyngi 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.   
Title: Re: Mortgage Payoff Club!!
Post by: nora 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..
Title: Re: Mortgage Payoff Club!!
Post by: KBecks2 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.







Title: Re: Mortgage Payoff Club!!
Post by: eyePod 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!
Title: Re: Mortgage Payoff Club!!
Post by: eyePod 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. :-/
Title: Re: Mortgage Payoff Club!!
Post by: RNwastash on January 29, 2015, 08:47:51 PM
Paid extra $400, down to $132,800.  Will keep plugging along.
Title: Re: Mortgage Payoff Club!!
Post by: Bolshevik Artizan 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
Title: Re: Mortgage Payoff Club!!
Post by: Groovin Old Hippie 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
Title: Re: Mortgage Payoff Club!!
Post by: Alfred J Quack 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!
Title: Re: Mortgage Payoff Club!!
Post by: serious_pete 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.
Title: Re: Mortgage Payoff Club!!
Post by: gluskap 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.
Title: Re: Mortgage Payoff Club!!
Post by: asauer 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!
Title: Re: Mortgage Payoff Club!!
Post by: frugalJD 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
Title: Re: Mortgage Payoff Club!!
Post by: The knitter 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.)


Title: Re: Mortgage Payoff Club!!
Post by: Neustache 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!)

Title: Re: Mortgage Payoff Club!!
Post by: FunkyStickman 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.
Title: Re: Mortgage Payoff Club!!
Post by: Money Badger 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!
Title: Re: Mortgage Payoff Club!!
Post by: aj_yooper 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.
Title: Re: Mortgage Payoff Club!!
Post by: hdatontodo 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.
Title: Re: Mortgage Payoff Club!!
Post by: MarciaB 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.
Title: Re: Mortgage Payoff Club!!
Post by: aj_yooper 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?
Title: Re: Mortgage Payoff Club!!
Post by: MarciaB 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.
Title: Re: Mortgage Payoff Club!!
Post by: aj_yooper 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.
Title: Re: Mortgage Payoff Club!!
Post by: Rural 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!
Title: Re: Mortgage Payoff Club!!
Post by: FunkyStickman on February 27, 2015, 08:42:46 AM
Just dropped my tax return on principal, now we're down under $60K.
Title: Re: Mortgage Payoff Club!!
Post by: Groovin Old Hippie 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
Title: Re: Mortgage Payoff Club!!
Post by: asauer 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. 
Title: Re: Mortgage Payoff Club!!
Post by: sansimeon 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."
Title: Re: Mortgage Payoff Club!!
Post by: dabears847 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. 

Title: Re: Mortgage Payoff Club!!
Post by: asauer 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!
Title: Re: Mortgage Payoff Club!!
Post by: frizzywhiskers 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)
Title: Re: Mortgage Payoff Club!!
Post by: frizzywhiskers 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!
Title: Re: Mortgage Payoff Club!!
Post by: hdatontodo 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.
Title: Re: Mortgage Payoff Club!!
Post by: Heckler 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. 
Title: Re: Mortgage Payoff Club!!
Post by: Heckler 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!
Title: Re: Mortgage Payoff Club!!
Post by: Stachesquatch 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.
Title: Re: Mortgage Payoff Club!!
Post by: dabears847 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.
Title: Re: Mortgage Payoff Club!!
Post by: dabears847 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.
Title: Re: Mortgage Payoff Club!!
Post by: REAL WORLD EXPAT 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.
Title: Re: Mortgage Payoff Club!!
Post by: dabears847 on April 05, 2015, 09:28:35 AM
Quote
Quote from: MrMurphy on April 15, 2013, 02:13:45 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.

Oh, Ok, i get it, because 188months is 15.5 yrs.. So, if you then invested the $3,500 for 14.5yrs after paying it off (total 30yrs) you'd still be ahead of investing $1500 for 30yr.. because that is the argument/misconception is that after it's paid off you'll have $xx extra to invest/catch up.

Is there a time frame, say if you could payit off in 2 yrs or 5yrs vs 15.5.. Would that make a diff?? Or does the interest rate make a diff?

I'm not trying to be an ass, i'm just trying to learn. I don't have a mortgage but big student loans.

Or you can see my situation here:
http://www.mrmoneymustache.com/forum/ask-a-mustachian/should-we-change-sl-repayment-plans/

I'd love any advice!!
Take a look at this updated worksheet. I worked  on Tomsang's sheet and found two primary concerns. I was seriously considering cutting back on mortgage pay down now that I'm under $100,000 balance but now I'm not so certain anymore. If I'm wrong, I'll probably shift more to Vanguard but I'm not seeing the risk reward.

1. Future Cash Flow is not calculated accurately for the accelerated Payoff club, not including the normal payment and extra payment once paid off.
2. The Investment rate is not applied to extra cash once the mortgage is paid off.

I added columns to the math and input sheet to show the differences. Notice the big swing in the compounding at the end of the cashflow. We went from lossing money paying off the house early of by 1.9Million and now we are making $550,000 by compounding the future cash flow.

D - C   Compounding Future Cash Flow         
   with Mortgage Paid Off         
Benefit (Loss)   7% Future Cash Flow 7038.56, year 6         
Investing vs.   Without Tax Gain Holdings         
Paying Down             
Mortgage   Neg Loss with Payoff, Positive Gain Compounding Future Cash flow         
 $669.26     $(904.81)   12   Tax Difference   
 $20,829.02     $(27,784.76)   60   Tax Difference   
 $245,687.97     $(97,661.48)   120   Tax and Compounding   
 $550,993.38     $(160,632.72)   180   Tax and Compounding   
 $925,475.73     $52,826.56    240   Tax and Compounding   
 $1,391,028.37     $203,111.20    300   Tax and Compounding   
 $1,977,557.12     $505,474.90    360   Tax and Compounding   
Title: Re: Mortgage Payoff Club!!
Post by: FIRE me on April 06, 2015, 02:16:39 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.

Paid mine off in 7 years. Now my savings rate is 70%.

Those are some awful property taxes, mine is less than 1K annual.
Title: Re: Mortgage Payoff Club!!
Post by: tomsang on April 06, 2015, 09:36:08 AM
Quote
Quote from: MrMurphy on April 15, 2013, 02:13:45 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.

Oh, Ok, i get it, because 188months is 15.5 yrs.. So, if you then invested the $3,500 for 14.5yrs after paying it off (total 30yrs) you'd still be ahead of investing $1500 for 30yr.. because that is the argument/misconception is that after it's paid off you'll have $xx extra to invest/catch up.

Is there a time frame, say if you could payit off in 2 yrs or 5yrs vs 15.5.. Would that make a diff?? Or does the interest rate make a diff?

I'm not trying to be an ass, i'm just trying to learn. I don't have a mortgage but big student loans.

Or you can see my situation here:
http://www.mrmoneymustache.com/forum/ask-a-mustachian/should-we-change-sl-repayment-plans/

I'd love any advice!!
Take a look at this updated worksheet. I worked  on Tomsang's sheet and found two primary concerns. I was seriously considering cutting back on mortgage pay down now that I'm under $100,000 balance but now I'm not so certain anymore. If I'm wrong, I'll probably shift more to Vanguard but I'm not seeing the risk reward.

1. Future Cash Flow is not calculated accurately for the accelerated Payoff club, not including the normal payment and extra payment once paid off.
2. The Investment rate is not applied to extra cash once the mortgage is paid off.

I added columns to the math and input sheet to show the differences. Notice the big swing in the compounding at the end of the cashflow. We went from lossing money paying off the house early of by 1.9Million and now we are making $550,000 by compounding the future cash flow.

D - C   Compounding Future Cash Flow         
   with Mortgage Paid Off         
Benefit (Loss)   7% Future Cash Flow 7038.56, year 6         
Investing vs.   Without Tax Gain Holdings         
Paying Down             
Mortgage   Neg Loss with Payoff, Positive Gain Compounding Future Cash flow         
 $669.26     $(904.81)   12   Tax Difference   
 $20,829.02     $(27,784.76)   60   Tax Difference   
 $245,687.97     $(97,661.48)   120   Tax and Compounding   
 $550,993.38     $(160,632.72)   180   Tax and Compounding   
 $925,475.73     $52,826.56    240   Tax and Compounding   
 $1,391,028.37     $203,111.20    300   Tax and Compounding   
 $1,977,557.12     $505,474.90    360   Tax and Compounding

Here is the updated workbook.  I placed it here 

Since I believe you posted a modified workbook that doubles up the mortgage returns, I wanted to post the correct one here as well.  Check it out and let me know if anything needs to be updated.
Title: Re: Mortgage Payoff Club!!
Post by: Neustache on April 06, 2015, 10:16:52 AM
This is all super duper interesting....and I want to discuss....shall I start a new thread for it?  That way we can high five over here for mortgage payoff progress....and discuss the particulars elsewhere?  'Cause I just ran some rough numbers, and it looks like it's close to a wash for me, personally, which I find very interesting.  But I wonder, too, if it's very specific to numbers in a case by case basis?  Basically, our FI is not extended by much because I still need extra income to pay for my mortgage if I don't pay it off first.  I'm talking...work a few months extra to make up the difference. 
Title: Re: Mortgage Payoff Club!!
Post by: tomsang on April 06, 2015, 10:43:59 AM
This is all super duper interesting....and I want to discuss....shall I start a new thread for it?  That way we can high five over here for mortgage payoff progress....and discuss the particulars elsewhere?  'Cause I just ran some rough numbers, and it looks like it's close to a wash for me, personally, which I find very interesting.  But I wonder, too, if it's very specific to numbers in a case by case basis?  Basically, our FI is not extended by much because I still need extra income to pay for my mortgage if I don't pay it off first.  I'm talking...work a few months extra to make up the difference.

I would be interested in hearing about your situation and agree about clogging up the High Five page.  I just posted the calculator as I feel like the calculator that was by posted by dabears847 of my calc was not calculating correctly. 

We are discussing lots of mortgage related topics over on this thread:
http://forum.mrmoneymustache.com/investor-alley/paying-off-mortgage-early-how-bad-is-it-for-your-fi-date/
Title: Re: Mortgage Payoff Club!!
Post by: dabears847 on April 06, 2015, 04:12:03 PM
I'll check out the other thread and maybe we need a new thread to reflect all the new information gathered. Also, I've checked the numbers on all three sheets posted and the greatest concern is missing the key elements I posted recently about future cash flow and applying the investment rate to future earnings.   

Balance on the House $75,900 and two rentals next.
Title: Re: Mortgage Payoff Club!!
Post by: tomsang on April 06, 2015, 04:52:10 PM
I'll check out the other thread and maybe we need a new thread to reflect all the new information gathered. Also, I've checked the numbers on all three sheets posted and the greatest concern is missing the key elements I posted recently about future cash flow and applying the investment rate to future earnings.   

Balance on the House $75,900 and two rentals next.

All the cash flows and investment rates are working properly in the updated worksheet.  I think you are not following how the calculator works.  It calculates a mortgage to term, it calculates it with a loan pay down(switching to investing when the loan is paid off), and it calculates a pure investment account.  It then figures out the benefit of investing vs. paying off the mortgage by month.  The summary page is just capturing different years. 

You are better off keeping your mortgage if your investment returns exceed your mortgage rate.  IE if you are getting 7% by investing or saving 4% by paying off your mortgage, you will be better off from month one through the 30 years by keeping the mortgage.  Let's take further discussions to the other thread.  I just wanted to clear that up that the calculator is taking into account the current and future cash flows or balances.
Title: Re: Mortgage Payoff Club!!
Post by: asauer on April 07, 2015, 07:37:39 AM
Awesome!  Think of all that $ you can save now.  Can't wait to be in your shoes soon.
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.
Title: Re: Mortgage Payoff Club!!
Post by: Money Badger on April 11, 2015, 12:50:11 PM
Mrs. Indentured and I have the goal of payoff in 5 years on a $249k mortgage without gutting our current stash. 

Under $210K by year-end or bust!
Ugh, took a hit on $1K net tax bill that slowed progress.   The tax benefit of our mortgage coincidentally is just $1K per year for the privilege of throwing away another $6k net in interest.   New balance as of April 1 is $244880...   Hoping a bonus will knock $5k off that to get to the $230-ish range.   Also sold another $500 of junk towards the cause recently and have another $1k in clutter for sale to beef up the emergency/maintenance fund as well.   
Title: Re: Mortgage Payoff Club!!
Post by: hdatontodo on April 11, 2015, 07:01:11 PM
Update on trying to pay off the $99K mortgage balance this year.

I used bonus money, motorcycle sale proceeds, OT, $8K from the Mrs, money from selling a cabinet full of expendables from certain outdoor sport, and monthly extra principal payments, to reduce the balance to about $40K. Not bad for a little more than four months.

We will send about $2K extra each month ($18K). I have two 3-check months ($6K). I have about $500+ per month extra ($5K). I will have some OT this year.

I am a bit impatient thinking about the 150-some workdays left to get it done.

I will be 55 this year and might get laid off next year when a contract is over. My wife's salary can cover most of our expenses if our 15-year mortgage is gone.

Side note. She seldom spends money on clothes, jewelry, hair, etc but just bought a $3K mountain bike. Ouch.

Title: Re: Mortgage Payoff Club!!
Post by: Neustache on April 12, 2015, 06:36:54 AM
@hdatontodo - SO CLOSE!!  Rooting for ya! (and for everyone else!)
Title: Re: Mortgage Payoff Club!!
Post by: Emerald on April 15, 2015, 12:18:45 PM
Compared to y'all, I'm moving a little slower.  I just crossed the 50% mark, so now I officially own more of my house than the bank does.  I'm on track to pay it off completely by the end of 2017.
Title: Re: Mortgage Payoff Club!!
Post by: sequim on April 17, 2015, 02:51:28 PM
Our home listed for sale today and we are hoping in this market we can accept an offer and closed before the end of May.  Once our mortgage gets paid off from the proceeds, we will be headed to Salt Lake where we just bought a home for cash.  And then we'll be officially FIREd (or free to do what we want) and mortgage-free.  Can't believe I first posted only once almost exactly one year ago with hopes of becoming a mustachian but the "plan" wasn't in place quite yet.  And here we are a year later with that plan having been mostly executed.  Feels like sliding into home base...

Such a good feeling yet it seemed so overwhelming to contemplate in the beginning.  Will love having more time to read this forum and connect with like-minded people.
Title: Re: Mortgage Payoff Club!!
Post by: Frugalite on April 18, 2015, 02:02:56 PM
I have been a long time lurker, but am not quite cool enough to join the group yet, LOL. In January hubby and I paid off the last of our student loans, and now are working diligently at the last bit of a car loan we have. Projecting having it paid off by July and then we are going to begin chipping away at our modest mortgage of about $115,000. :) Looking forward to joining you all soon- in the meanwhile, good luck and keep soldiering on!
Title: Re: Mortgage Payoff Club!!
Post by: KBecks2 on April 20, 2015, 06:15:21 AM
I have started sucking at this a little bit.  But I have been working on putting more into our kids' college savings.  Where is the balance? I'm not that sure.  But I paid an extra $300 this month, an extra $513 in March, and an extra $1,500 in January.

Our mortgage balance is currently at $115,000. 

I might make small swipes at this for a while. I am also debating investing vs. paying down mortgage, and I may try to split our contributions between the two.  I think no mortgage will be a huge emotional load off my husband though, moreso than an investment total.  However, I expect our investments can / will gain 7+% annually at a minimum.
Title: Re: Mortgage Payoff Club!!
Post by: Able was I ERE on April 25, 2015, 11:35:18 PM
Just got a "Satisfaction of Mortgage" in the mail today!   After almost 11 years from purchase, and 2 rates-can-never-go-lower refinances, it's finally completely paid off.   
Title: Re: Mortgage Payoff Club!!
Post by: boarder42 on April 26, 2015, 07:55:58 PM
Those who have paid their mortgages off should consider cash out refi at today's rates.  Its a great inflation hedge. Plus u will make more investing than the interest
Title: Re: Mortgage Payoff Club!!
Post by: Debts_of_Despair on April 27, 2015, 05:32:19 PM
I just registered to get in on this action!

Since I've been a homeowner, 2015 was the first year where we didn't have any car loans or student loans between us.  Now it's time to get serious about ridding ourselves of the mortgage!  Started out with 92k when I bought the house eight years ago.   When I made my first principal-only payment in March I was at 77k.  I'm already down to 67k.  In a good month without any unexpected expenses, I can throw 4k in principal at it.  When I get down to 20k, I'll be pulling that amount from my rainy day fund to make one final balloon payment.  I hope to be completely done with it in a little over a year.

Anyway, I was pretty excited when I realized I could make this happen and this thread is good motivation to keep me going.  I will be posting update!
Title: Re: Mortgage Payoff Club!!
Post by: Debts_of_Despair on May 07, 2015, 05:22:59 PM
Pay week!  Down to 65.3k.
Title: Re: Mortgage Payoff Club!!
Post by: Neustache on May 08, 2015, 10:43:56 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.

Current amount:  $111,523

Pretty sure I'll reach our goal of 104K by Jan 2016 if not before - although I am changing up strategies a bit and maxing out IRAs for tax savings and then throwing additional towards the mortgage.  Will make the mortgage payoff slower, but the tax savings and investing earnings will be worth it!
Title: Re: Mortgage Payoff Club!!
Post by: boarder42 on May 11, 2015, 11:15:40 AM

Starting Mortgage:  123K
Current Balance: 122K


i really hope you're maxing out all tax advantaged account before dumping money into a mortgage


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.

Current amount:  $111,523

Pretty sure I'll reach our goal of 104K by Jan 2016 if not before - although I am changing up strategies a bit and maxing out IRAs for tax savings and then throwing additional towards the mortgage.  Will make the mortgage payoff slower, but the tax savings and investing earnings will be worth it!
Title: Re: Mortgage Payoff Club!!
Post by: hdatontodo on May 11, 2015, 11:43:08 AM
Current amount:  $111,523...Pretty sure I'll reach our goal of 104K by Jan 2016 if not before...

I don't know if you get paid on this schedule, but a number of people will get 3 pays in December since January 1 is a Friday and becomes a December pay for some (like me, which should be part of our final mortgage payment in January.)
Title: Re: Mortgage Payoff Club!!
Post by: dandypandys on May 11, 2015, 12:16:03 PM
i 'think' I'm in too. my rate is 5.9% and 86k to go.
since i am crap at stocks, and don't know anything about it, although i am learning right now on this forum (thanks!) is this not a wise decision?
Title: Re: Mortgage Payoff Club!!
Post by: birdman2003 on May 11, 2015, 12:31:13 PM
i 'think' I'm in too. my rate is 5.9% and 86k to go.
since i am crap at stocks, and don't know anything about it, although i am learning right now on this forum (thanks!) is this not a wise decision?

You could always open a taxable investment account, add money and grow it until it surpasses the 86k mortgage balance.  Then you liquidate the account, pay taxes on your gains, and then "retire" your mortgage.

Otherwise you could send in extra principal payments as you accumulate cash, and get a "guaranteed" 5.9% rate of return (which is close to the historical average for the stock market).
Title: Re: Mortgage Payoff Club!!
Post by: dandypandys on May 11, 2015, 12:36:34 PM
i 'think' I'm in too. my rate is 5.9% and 86k to go.
since i am crap at stocks, and don't know anything about it, although i am learning right now on this forum (thanks!) is this not a wise decision?

You could always open a taxable investment account, add money and grow it until it surpasses the 86k mortgage balance.  Then you liquidate the account, pay taxes on your gains, and then "retire" your mortgage.

Otherwise you could send in extra principal payments as you accumulate cash, and get a "guaranteed" 5.9% rate of return (which is close to the historical average for the stock market).
Thank you bird man! i have a Q.. if i have a 403b with transamerica through my work, should i do it with them since i can see those Vanguard stocks i have some already, or do a separate thing with Vanguard where it is not coming straight off my paycheck tax free? Not sure if Transamerica 403b account lets me set up other things like this.. thought i can ask them too. I know nothing! learning much! Also, can you put money in to Vanguard and then get it out any time you like?
Title: Re: Mortgage Payoff Club!!
Post by: Neustache on May 11, 2015, 04:13:07 PM
Current amount:  $111,523...Pretty sure I'll reach our goal of 104K by Jan 2016 if not before...

I don't know if you get paid on this schedule, but a number of people will get 3 pays in December since January 1 is a Friday and becomes a December pay for some (like me, which should be part of our final mortgage payment in January.)


We get an extra paycheck in May and October - but the October one usually gets eaten up with property taxes (about $700 - thank goodness this will keep going down each year as our cars age!) Christmas ($500) and other normal budget stuff (food/giving/sitar lessons).  But yes, I should still, even with all of that, have about $900 extra to throw at either the mortgage or maxing out our IRAs.  Woot!  Love three paycheck months, but especially the one I get in May as the only odd thing that comes out of that is our life insurance which is about $500 and then the rest goes to our current goal.
Title: Re: Mortgage Payoff Club!!
Post by: ACLR8R on May 11, 2015, 04:41:33 PM
Just found this thread, so I thought I would toss my numbers in as well.

Trying to become more mustachian since I found MMM about 8 months ago. Luckily we bought our house at the bottom of the recession and only owed $121k. I refi'd last year to a 15yr at 2.75%, then I sold my FF Cobra, and my C6 Corvette and have dropped 70k or so and we are down do 50k left. Hoping to have it paid off by June 2016!

I know for most the math doesn't work out, when comparing it to investing but I always wondered, what if the house then becomes a rental property. Do the numbers get better?

Our plan is to pay this house off and then buy another and rent this one out. Yes we will have another mortgage, but the rent from our current house will pay for the mortgage on the next plus $3-400 per month. So we would still have our mortgage paid for, essentially, but increase our income by $3-400 per month.

I feel like that is a pretty good return on our money, especially when you factor in the house appreciating in value by 3-10% each year as well. (this house has already gone from 161k to 240k in value in 4 years due to the housing market recovering).

I know we got lucky in our timing, but I figure that has to be on par with investing the $121k, or is there a hole in my thinking somewhere?
Title: Re: Mortgage Payoff Club!!
Post by: boarder42 on May 12, 2015, 06:10:50 AM
Just found this thread, so I thought I would toss my numbers in as well.

Trying to become more mustachian since I found MMM about 8 months ago. Luckily we bought our house at the bottom of the recession and only owed $121k. I refi'd last year to a 15yr at 2.75%, then I sold my FF Cobra, and my C6 Corvette and have dropped 70k or so and we are down do 50k left. Hoping to have it paid off by June 2016!

I know for most the math doesn't work out, when comparing it to investing but I always wondered, what if the house then becomes a rental property. Do the numbers get better?

Our plan is to pay this house off and then buy another and rent this one out. Yes we will have another mortgage, but the rent from our current house will pay for the mortgage on the next plus $3-400 per month. So we would still have our mortgage paid for, essentially, but increase our income by $3-400 per month.

I feel like that is a pretty good return on our money, especially when you factor in the house appreciating in value by 3-10% each year as well. (this house has already gone from 161k to 240k in value in 4 years due to the housing market recovering).

I know we got lucky in our timing, but I figure that has to be on par with investing the $121k, or is there a hole in my thinking somewhere?

If the math doesnt work out for it not being a rental it still doesnt work out when it is a rental.  Essentially at a 2.75% rate you're just burning money putting it in your mortgage as your rate is under the avg inflation rate. 
Title: Re: Mortgage Payoff Club!!
Post by: ACLR8R on May 12, 2015, 10:27:08 AM
Just found this thread, so I thought I would toss my numbers in as well.

Trying to become more mustachian since I found MMM about 8 months ago. Luckily we bought our house at the bottom of the recession and only owed $121k. I refi'd last year to a 15yr at 2.75%, then I sold my FF Cobra, and my C6 Corvette and have dropped 70k or so and we are down do 50k left. Hoping to have it paid off by June 2016!

I know for most the math doesn't work out, when comparing it to investing but I always wondered, what if the house then becomes a rental property. Do the numbers get better?

Our plan is to pay this house off and then buy another and rent this one out. Yes we will have another mortgage, but the rent from our current house will pay for the mortgage on the next plus $3-400 per month. So we would still have our mortgage paid for, essentially, but increase our income by $3-400 per month.

I feel like that is a pretty good return on our money, especially when you factor in the house appreciating in value by 3-10% each year as well. (this house has already gone from 161k to 240k in value in 4 years due to the housing market recovering).

I know we got lucky in our timing, but I figure that has to be on par with investing the $121k, or is there a hole in my thinking somewhere?

If the math doesnt work out for it not being a rental it still doesnt work out when it is a rental.  Essentially at a 2.75% rate you're just burning money putting it in your mortgage as your rate is under the avg inflation rate.

My thinking (again could be flawed), but once the house is rented and it is bringing in around $1400 per month that's 16,800 per year. Which using the $121k payoff amount is almost 14% per year. Now I know you have to account for taxes and a month or two every couple of years that it isn't rented ( I have another property that was vacant two months in the past 3 years). But I would say a conservative 7-9% annually, and that still isn't factoring in appreciation of the home itself which has been almost 50% over the last 4 years (I know that wont continue, but home prices in Gilbert have been recovering very well).

What am I missing?
Title: Re: Mortgage Payoff Club!!
Post by: dandypandys on May 12, 2015, 10:38:46 AM
I've decided I'm in! yay! Gonna send a huge check to them this week :) take me down to 68k owed. Then we are going to put an extra 1000 towards it every month. yippee.
We want to sell it in a few years maybe 3, once we have it paid off and have cash for a downpayment on another house.
Title: Re: Mortgage Payoff Club!!
Post by: birdman2003 on May 12, 2015, 03:52:06 PM
I've decided I'm in! yay! Gonna send a huge check to them this week :) take me down to 68k owed. Then we are going to put an extra 1000 towards it every month. yippee.
We want to sell it in a few years maybe 3, once we have it paid off and have cash for a downpayment on another house.

Sounds like a good plan.  If you did want to open an account with Vanguard (or any other broker) it would be separate from any other retirement plans offered through your work.  You would link it to your bank and transfer money to your Vanguard account which can then be used to buy your favorite funds.  You can sell them at any time, but most of the funds have a minimum required balance (if your account is at $5000 and you decide you need to pull out $4000 for an emergency, you can't sell $4000 worth of funds unless the minimum balance for that fund is $1000. Most of the funds have a minimum of $3000).  When you sell funds and transfer the money back to your bank, you'll pay taxes on the gains at tax time.  So don't spend it all. *smile*

But yeah, I would probably do what you describe and just send in an extra $1000 principal payment to your mortgage owner every month.
Title: Re: Mortgage Payoff Club!!
Post by: dandypandys on May 12, 2015, 04:22:41 PM
I've decided I'm in! yay! Gonna send a huge check to them this week :) take me down to 68k owed. Then we are going to put an extra 1000 towards it every month. yippee.
We want to sell it in a few years maybe 3, once we have it paid off and have cash for a downpayment on another house.

Sounds like a good plan.  If you did want to open an account with Vanguard (or any other broker) it would be separate from any other retirement plans offered through your work.  You would link it to your bank and transfer money to your Vanguard account which can then be used to buy your favorite funds.  You can sell them at any time, but most of the funds have a minimum required balance (if your account is at $5000 and you decide you need to pull out $4000 for an emergency, you can't sell $4000 worth of funds unless the minimum balance for that fund is $1000. Most of the funds have a minimum of $3000).  When you sell funds and transfer the money back to your bank, you'll pay taxes on the gains at tax time.  So don't spend it all. *smile*

But yeah, I would probably do what you describe and just send in an extra $1000 principal payment to your mortgage owner every month.
Thanks! You just answered all my Q's i had swilling in my head and on another thread :)
Title: Re: Mortgage Payoff Club!!
Post by: boarder42 on May 13, 2015, 06:17:29 AM
Just found this thread, so I thought I would toss my numbers in as well.

Trying to become more mustachian since I found MMM about 8 months ago. Luckily we bought our house at the bottom of the recession and only owed $121k. I refi'd last year to a 15yr at 2.75%, then I sold my FF Cobra, and my C6 Corvette and have dropped 70k or so and we are down do 50k left. Hoping to have it paid off by June 2016!

I know for most the math doesn't work out, when comparing it to investing but I always wondered, what if the house then becomes a rental property. Do the numbers get better?

Our plan is to pay this house off and then buy another and rent this one out. Yes we will have another mortgage, but the rent from our current house will pay for the mortgage on the next plus $3-400 per month. So we would still have our mortgage paid for, essentially, but increase our income by $3-400 per month.

I feel like that is a pretty good return on our money, especially when you factor in the house appreciating in value by 3-10% each year as well. (this house has already gone from 161k to 240k in value in 4 years due to the housing market recovering).

I know we got lucky in our timing, but I figure that has to be on par with investing the $121k, or is there a hole in my thinking somewhere?

If the math doesnt work out for it not being a rental it still doesnt work out when it is a rental.  Essentially at a 2.75% rate you're just burning money putting it in your mortgage as your rate is under the avg inflation rate.

My thinking (again could be flawed), but once the house is rented and it is bringing in around $1400 per month that's 16,800 per year. Which using the $121k payoff amount is almost 14% per year. Now I know you have to account for taxes and a month or two every couple of years that it isn't rented ( I have another property that was vacant two months in the past 3 years). But I would say a conservative 7-9% annually, and that still isn't factoring in appreciation of the home itself which has been almost 50% over the last 4 years (I know that wont continue, but home prices in Gilbert have been recovering very well).

What am I missing?

your thinking is extremely flawed.  its not just the pay off amount ROI you need to look at its the entire value of the home.  Meaning what you could sell it for.  if your home is worth anymore than 70k which it is... it doesnt even meet the 2% rule of renting.  at 1400 a month.  Not to mention just the amount of capital you're tossing in the trash paying it off any faster than minimum payments and investing the rest in other properties or the stock market.  Home appreciation typically keeps up with inflation.  you bought at a bottom so it has been higher.  but you will come out miles ahead selling that house and putting it into a smarter investment.  and also by not paying it down.  Paying down ALL debt is probably one of the biggest flaws of people on this site.  A mortgage at your rate is costing you 2-3 years of FIRE by paying it down vs investing the money in more property or stock investments.   And your house is not currently rentable its worth way too much for the rent you would bring in.   

post actual numbers

Home value - ???
assumed rental income - 1400
what you owe is not relevant.  only the rate which we already have.
what is your expected FIRE annual income
what do you currently have in savings

i can do the math and show you how bad an idea you're currently contemplating.  assuming that you bought it for around 140-150 and it has appreciated like you say ... you should not be renting this place even based on original purchase price. 
Title: Re: Mortgage Payoff Club!!
Post by: ACLR8R on May 13, 2015, 10:40:05 AM
Just found this thread, so I thought I would toss my numbers in as well.

Trying to become more mustachian since I found MMM about 8 months ago. Luckily we bought our house at the bottom of the recession and only owed $121k. I refi'd last year to a 15yr at 2.75%, then I sold my FF Cobra, and my C6 Corvette and have dropped 70k or so and we are down do 50k left. Hoping to have it paid off by June 2016!

I know for most the math doesn't work out, when comparing it to investing but I always wondered, what if the house then becomes a rental property. Do the numbers get better?

Our plan is to pay this house off and then buy another and rent this one out. Yes we will have another mortgage, but the rent from our current house will pay for the mortgage on the next plus $3-400 per month. So we would still have our mortgage paid for, essentially, but increase our income by $3-400 per month.

I feel like that is a pretty good return on our money, especially when you factor in the house appreciating in value by 3-10% each year as well. (this house has already gone from 161k to 240k in value in 4 years due to the housing market recovering).

I know we got lucky in our timing, but I figure that has to be on par with investing the $121k, or is there a hole in my thinking somewhere?

If the math doesnt work out for it not being a rental it still doesnt work out when it is a rental.  Essentially at a 2.75% rate you're just burning money putting it in your mortgage as your rate is under the avg inflation rate.

My thinking (again could be flawed), but once the house is rented and it is bringing in around $1400 per month that's 16,800 per year. Which using the $121k payoff amount is almost 14% per year. Now I know you have to account for taxes and a month or two every couple of years that it isn't rented ( I have another property that was vacant two months in the past 3 years). But I would say a conservative 7-9% annually, and that still isn't factoring in appreciation of the home itself which has been almost 50% over the last 4 years (I know that wont continue, but home prices in Gilbert have been recovering very well).

What am I missing?

your thinking is extremely flawed.  its not just the pay off amount ROI you need to look at its the entire value of the home.  Meaning what you could sell it for.  if your home is worth anymore than 70k which it is... it doesnt even meet the 2% rule of renting.  at 1400 a month.  Not to mention just the amount of capital you're tossing in the trash paying it off any faster than minimum payments and investing the rest in other properties or the stock market.  Home appreciation typically keeps up with inflation.  you bought at a bottom so it has been higher.  but you will come out miles ahead selling that house and putting it into a smarter investment.  and also by not paying it down.  Paying down ALL debt is probably one of the biggest flaws of people on this site.  A mortgage at your rate is costing you 2-3 years of FIRE by paying it down vs investing the money in more property or stock investments.   And your house is not currently rentable its worth way too much for the rent you would bring in.   

post actual numbers

Home value - ???
assumed rental income - 1400
what you owe is not relevant.  only the rate which we already have.
what is your expected FIRE annual income
what do you currently have in savings

i can do the math and show you how bad an idea you're currently contemplating.  assuming that you bought it for around 140-150 and it has appreciated like you say ... you should not be renting this place even based on original purchase price.

Lo, I think throwing it in the trash might be a tad extreme, but here are my numbers.

Home value - $240,000
assumed rental income - 1400
what you owe is not relevant.  only the rate which we already have.
what is your expected FIRE annual income- Shooting for 30-50k, but wife and I will still be working part time at hobbies we enjoy. Only need about 20k in investment income.
what do you currently have in savings- $30k in cash in the bank, but approx $200k (not including equity in primary residence) , between 403b, Precious Metals, Roth, IRA, equity in other rental property, and State retirement (both teachers).

Ages 32, and 27.

I have a feeling this is going to hurt :)

Not planning to pay the rental off early, that is at 2.375%
Title: Re: Mortgage Payoff Club!!
Post by: boarder42 on May 13, 2015, 12:31:32 PM
that home is worth 240000 ... meaning if you sold the home vs renting.  you would have 240k to invest in a good investment.  This home renting at 1400 is not that investment.  lets just use the annual market returns which can grow tax sheltered til you withdraw.  and lets pull out inflation so lets say 7% annual returns. that gives you 16,800.  you may say its the same as the house ... yes but you're not accounting for the fact that a good rule of thumb for rentals is to assume 50% goes to other things.  so you're making half that on you rental.  and you have to worry about tennants and working on the house and fixing it up each time and managing your property.  all to get less than half the return of just sitting it in a taxable account and putting it in VTSAX. 

Most people follow a 2% rule (most successful real estate investors)  you arent even at a 1% rule on this house.  Go read bigger pockets forum and you can learn alot about owning rentals.
Title: Re: Mortgage Payoff Club!!
Post by: ACLR8R on May 13, 2015, 03:17:42 PM
that home is worth 240000 ... meaning if you sold the home vs renting.  you would have 240k to invest in a good investment.  This home renting at 1400 is not that investment.  lets just use the annual market returns which can grow tax sheltered til you withdraw.  and lets pull out inflation so lets say 7% annual returns. that gives you 16,800.  you may say its the same as the house ... yes but you're not accounting for the fact that a good rule of thumb for rentals is to assume 50% goes to other things.  so you're making half that on you rental.  and you have to worry about tennants and working on the house and fixing it up each time and managing your property.  all to get less than half the return of just sitting it in a taxable account and putting it in VTSAX. 

Most people follow a 2% rule (most successful real estate investors)  you arent even at a 1% rule on this house.  Go read bigger pockets forum and you can learn alot about owning rentals.

OK, I see one of the major differences in our thinking. I am looking at the investment I have made in the house of $121k, and you are looking at the value of the home $240k.

I do manage my properties and luckily in that last 4-5 years of doing it I have been no where near the 50% rule, probably no even 10%. Could be luck or doing my due diligence in the application process. I honestly spend less than 10 hrs per year managing.

I appreciate your perspective.
Title: Re: Mortgage Payoff Club!!
Post by: boarder42 on May 15, 2015, 08:46:12 AM
selling that house and buying a house that costs less and has higher return to value is your 100% best option.  Doing what you're doing you are better off investing in vtsax.  its not a prespective its simple math
Title: Re: Mortgage Payoff Club!!
Post by: ACLR8R on May 15, 2015, 11:15:59 AM
selling that house and buying a house that costs less and has higher return to value is your 100% best option.  Doing what you're doing you are better off investing in vtsax.  its not a prespective its simple math

Thanks I'll keep that in mind, there really aren't any less expensive houses in my area so I will just continue on my path. Might not be the absolute best way to do it, but being mortgage free by 33 isn't the end of the world either :)

I appreciate your input, even if it did seem a bit condescending.
Title: Re: Mortgage Payoff Club!!
Post by: boarder42 on May 15, 2015, 02:08:48 PM
selling that house and buying a house that costs less and has higher return to value is your 100% best option.  Doing what you're doing you are better off investing in vtsax.  its not a prespective its simple math

Thanks I'll keep that in mind, there really aren't any less expensive houses in my area so I will just continue on my path. Might not be the absolute best way to do it, but being mortgage free by 33 isn't the end of the world either :)

I appreciate your input, even if it did seem a bit condescending.
+

then why ask the question if you just wanted a yes man .
Title: Re: Mortgage Payoff Club!!
Post by: hdatontodo on June 02, 2015, 08:47:23 PM
[January] $99K mortgage balance...
[April] balance ... $40K. ...

June 1, $31.6K. Need to increase the next 7 payments by $25 to finish in January 2016.
Title: Re: Mortgage Payoff Club!!
Post by: asauer on June 04, 2015, 07:09:19 AM
Was able to throw another couple grand at the mortgage this month.  Down to 131K!
Title: Re: Mortgage Payoff Club!!
Post by: hdatontodo on June 04, 2015, 08:40:22 AM
[January] $99K mortgage balance...
[April] balance ... $40K. ...

June 1, $31.6K. Need to increase the next 7 payments by $25 to finish in January 2016.

Quite impressive, you already got all the cash sitting still in another account or you just pull a NFL paycheck?

I read posts here once in a while and figure that some of you throw on your mortgage more than our gross familial income. The special thing about you guys is not to repay the morgage fast but to dont follow the royal lifestyle (including housing) that your collaterals probably run.
The Mrs and I can just afford to scrape together the $5K payment from our paychecks. Only one of my 2 monthly checks had been needed prior. Getting OT @40/hr take-home covers a dinner out that was not in the budget. I have nil in savings but she has some. I plan to replenish savings next year.

At the peak of the market, the Mrs had gotten this house for $285K with a 30 year mortgage by herself before I came along. She had been renting out a room. My coming into the picture initially led to refi to a 15 year loan with some extra principal on top. It was about a year ago that I started really making big extra payments on the principal (after we finished the prepaid MD 529 for the kid.)
Title: Re: Mortgage Payoff Club!!
Post by: latetotheparty1977 on June 05, 2015, 10:23:09 AM
I've decided I'm in! yay! Gonna send a huge check to them this week :) take me down to 68k owed. Then we are going to put an extra 1000 towards it every month. yippee.
We want to sell it in a few years maybe 3, once we have it paid off and have cash for a downpayment on another house.

Sounds like a good plan.  If you did want to open an account with Vanguard (or any other broker) it would be separate from any other retirement plans offered through your work.  You would link it to your bank and transfer money to your Vanguard account which can then be used to buy your favorite funds.  You can sell them at any time, but most of the funds have a minimum required balance (if your account is at $5000 and you decide you need to pull out $4000 for an emergency, you can't sell $4000 worth of funds unless the minimum balance for that fund is $1000. Most of the funds have a minimum of $3000).  When you sell funds and transfer the money back to your bank, you'll pay taxes on the gains at tax time.  So don't spend it all. *smile*

But yeah, I would probably do what you describe and just send in an extra $1000 principal payment to your mortgage owner every month.
Thanks! You just answered all my Q's i had swilling in my head and on another thread :)

Forgive me, beginner question here: but what do you do if you do want to get your full amount of money out of the Vanguard brokerage account? You would get no gains on the money that is below the $3k minimum?
Title: Re: Mortgage Payoff Club!!
Post by: Debts_of_Despair on June 07, 2015, 04:51:59 PM
Pay week!  Down to 65.3k.

61k at time of this post.
Title: Re: Mortgage Payoff Club!!
Post by: birdman2003 on June 08, 2015, 01:12:31 PM
I've decided I'm in! yay! Gonna send a huge check to them this week :) take me down to 68k owed. Then we are going to put an extra 1000 towards it every month. yippee.
We want to sell it in a few years maybe 3, once we have it paid off and have cash for a downpayment on another house.

Sounds like a good plan.  If you did want to open an account with Vanguard (or any other broker) it would be separate from any other retirement plans offered through your work.  You would link it to your bank and transfer money to your Vanguard account which can then be used to buy your favorite funds.  You can sell them at any time, but most of the funds have a minimum required balance (if your account is at $5000 and you decide you need to pull out $4000 for an emergency, you can't sell $4000 worth of funds unless the minimum balance for that fund is $1000. Most of the funds have a minimum of $3000).  When you sell funds and transfer the money back to your bank, you'll pay taxes on the gains at tax time.  So don't spend it all. *smile*

But yeah, I would probably do what you describe and just send in an extra $1000 principal payment to your mortgage owner every month.
Thanks! You just answered all my Q's i had swilling in my head and on another thread :)

Forgive me, beginner question here: but what do you do if you do want to get your full amount of money out of the Vanguard brokerage account? You would get no gains on the money that is below the $3k minimum?

If you had $2900 and the fund minimum is $3000, your money would be sitting around idle until you transfer another $100 to meet the fund minimum investment.  Once you have $3000 in your account, you can buy $3000 worth of shares.  For example, if the mutual fund was worth $44 a share, you could buy $3000 worth of that fund and have 68.182 shares in your account (68.182*44 = 3000).  Then a few months later, the fund price has increased from $44 per share to $49 per share.  Now your 68.182 shares are worth $3340.92 (68.182*49 = 3340.92).  You can't pull out more than $340.92 from this mutual fund or else your balance would be below the required minimum of $3000.  If you had an urgent need for $500, you would need to sell all your shares of the mutual fund.  That's why you shouldn't put money into a mutual fund unless you can leave it alone and let it grow.
Title: Re: Mortgage Payoff Club!!
Post by: birdman2003 on June 08, 2015, 01:13:12 PM
More on topic, I am now below $60k left on my mortgage!
Title: Re: Mortgage Payoff Club!!
Post by: Heckler on June 08, 2015, 01:28:59 PM
$27,610 remaining. 8 months to go!
Title: Re: Mortgage Payoff Club!!
Post by: Money Badger on June 14, 2015, 02:42:06 PM
Mrs. Indentured and I have the goal of payoff in 5 years on a $249k mortgage without gutting our current stash. 

Under $210K by year-end or bust!

Slow and steady...  Threw the bonus at the mortgage (but decided to beef up the kid's 529 plans to cushion us from the college years instead of just paying down principal now at an unsustainable rate later)...   Now $239,500 half way through the year...   Putting passive income into it and the paydowns are starting to make notable positive momentum to the tune of $30 a month or so since we started accelerating a year ago...   So tracking to be around $225K by year end.    Sounds silly, but also as a Trekkie, I'm keeping Frugal Toque's "Jean Luc Picard" post on mortgage freedom bookmarked on my phone for inspiration.
Title: Re: Mortgage Payoff Club!!
Post by: KBecks2 on June 16, 2015, 02:12:58 PM
We're putting $1600 on the mortgage this month.  Balance will be about $112k.  I'm trying to put our extra on this and get it done. 
Title: Re: Mortgage Payoff Club!!
Post by: rjbf65 on June 18, 2015, 08:19:37 PM
I'll join.

Started June 2014 at 71k.

It's currently $55k.  Goal is to finish it off by next June.   Have 20k in cash that would finish it off by then.  We are currently investing 15% as well.   Basically doing the Dave Ramsey plan.   
Title: Re: Mortgage Payoff Club!!
Post by: LanceThrustington on June 22, 2015, 06:57:52 PM
I'm in too

Started in Feb with about 90K. 50% share of a $560k house in Melbourne Australia, interest rates are about 4.7% here
so its an easier decision to pay it off now rather than ivest.

Trying to smash down the loan ASAP preferably before the end of 2016 to then start saving for a family / future

down to 66,400 as of today.

Average wage, just funneling everything into it.
Title: Re: Mortgage Payoff Club!!
Post by: Rheagar on June 23, 2015, 01:07:26 PM
I'm in.

We bought our house in Nov 2015, mortgage of ~123k. We have ~117k left on the mortgage, but we are squirreling money away in  an ETF with the intent of paying off the mortgage in one lump sum once we have enough. The rationale is that we can hope to earn more in the market than we would save on interest, so we are sort of finding a happy medium in the pay it off/don't pay it off debate.

We currently have ~62k in that account, so 55k left to go! My very optimistic goal is April of next year. Hoping for bonuses to help out!
Title: Re: Mortgage Payoff Club!!
Post by: Debts_of_Despair on June 27, 2015, 04:12:55 PM
Pay week!  Down to 65.3k.

61k at time of this post.

Now at a little over 50k.  Wife is a teacher and gets a lump sum check at the end of the school year.  Put all of it into mortage.

Right now I'm ahead of schedule.  This is way easier than I thought it would be so far.
Title: Re: Mortgage Payoff Club!!
Post by: WWMD on July 01, 2015, 11:11:29 AM
Ok,

I'm in. I have been waffling over this for years now, just steadily saving. At this point in time if I got a rate of return of over 3.25% on my investments it would make sense to keep the money there and not pay off the mortgage. When all is said and done, my current loan would land me 10 years from now having paid $30,000 in interest. Nothing to sneeze at, but not an insurmountable loss.

BUT, I see a lot of benefits to paying off the mortgage instead:

I have about $60,000 to go if I want to keep a year's living expenses worth of savings/investments on deck for safety.

I believe it. No matter how many times I look at it and the financials tell me to invest instead, I believe in the peace-of-mind power of a mortgage-free existence.
Title: Re: Mortgage Payoff Club!!
Post by: frugalJD on July 01, 2015, 11:25:42 AM
Midway through 2015, we got it down to $144k.  Our goal for 2015 was to cut it to $128k by year end.  Now aiming for $120k!

-JD
Title: Re: Mortgage Payoff Club!!
Post by: asauer on July 07, 2015, 12:11:06 PM
Woohoo!  Down to 124,600!  This marks our half way point through the mortgage.  All down hill from here!
Title: Re: Mortgage Payoff Club!!
Post by: Farmgirl on July 07, 2015, 01:30:54 PM
20 payments left.  I can't wait.  The game changes seriously for us after that.
Title: Re: Mortgage Payoff Club!!
Post by: Alfred J Quack on July 07, 2015, 01:50:26 PM
Pay week!  Down to 65.3k.

61k at time of this post.

Now at a little over 50k.  Wife is a teacher and gets a lump sum check at the end of the school year.  Put all of it into mortage.

Right now I'm ahead of schedule.  This is way easier than I thought it would be so far.

Wow, you're going quite fast, nearly 15k in a few monts 0_0;

Ours is doing well too, got a tax return and made some smaller payments so we're down to just under 33k. 4.5k to go this year which should be easy!
Title: Re: Mortgage Payoff Club!!
Post by: hdatontodo on July 07, 2015, 02:46:42 PM
[January] $99K mortgage balance...

July 7, $27K left. 6 more payments from Aug->Jan. I hope my job holds out.
Title: Re: Mortgage Payoff Club!!
Post by: Fiveyearclub on July 07, 2015, 11:13:11 PM
Hi.  SW engineer here.  Income $140k.  $106k left on a 10 year fixed on $117k.  Property worth $350k.  Originally purchased in 2009, 30 year fixed on $122k.  What a waste!  Refinanced in 2014.  I want to start a business, so I want to minimize living expenses.  Really difficult in San Jose, CA.  Instead of thinking about my life as arbitraged percentages, I just want to maximize my chance of success to start a business that allows me to make more money than the stock market could ever return.  I will always need a place to live, so might as well get it out of the way now.

Instead of paying the mortgage directly, I think I will just pile up money over the next 18 months, just in case I end up moving for some unknown reason... Job change, whatever.  With a monthly principal portion around $850 in theory I will be putting around $5700 total toward the mortgage.  I will also be selling from my hoard of collectibles, worth $50k-$100k to accelerate the process.  $2000 a month and I finish in 12 months.  I have spent a lot of money... But at least it was on physical items I can resell.

I have around $35k in investments outside retirement for safety. I think I can finish this before the end of 2016 as long as I sell enough stuff.  It's kind of a bummer to be doing this alone, but I guess it has freedom also. 

I'll be 31 when this finishes.  Houses here are $750k or more, and my net worth will be only around $450k including the $350k condo.  Too high a percentage in real estate!  I've really had to change my expectations about what having a family will eventually be like.  3 people in 784 sq. ft.  Just have to keep reminding myself that it would be normal in Hong Kong.

I've really changed my life a lot in the last 18 months.  Attached is a graph showing how I paid off my debt and then started saving like crazy.  My name is five year club because I think a comprehensive, meaningful program can be developed to help people completely change their money and happiness situation in about 5 years.  1 is too short and 20 is too long.  I'm 1.5 years in, and so far it's kicking ass!  It's more fun to do it with other people...
Title: Re: Mortgage Payoff Club!!
Post by: plainjane on July 08, 2015, 07:37:57 AM
And we're under 30k, 1 year left in the term (our second 5 year term), just over 1 year left on amortization.  We're doing some extensive exterior work on the house in August so we have a decent contingency fund set aside if something horrible is found (the house is a century old, so it's best to assume something will be found).  If that goes smoothly, we'll throw the contingency at the mortgage and be done that much sooner. 
Title: Re: Mortgage Payoff Club!!
Post by: Comar on July 08, 2015, 02:55:04 PM
I'm joining in.

I have a house in Iceland. Bought it for 123k dollars (16.5 million icelandic crowns) in 2012. Started making extra payments early last year and am now down to 88.4k dollars. Currently I throw about 560 dollars at it each month. I have also thrown some extra cash at the mortage, such as tax repayments and such.

From the start I have used the strategy of adding to the payments each month. Each downpayment reduces the monthly mortage payment so for the next downpayment I have added the extra dollars the mortage payment has been reduced. Call it a snowball strategy?

My goal is to KO the mortage in 5 years. I'm turning 30 this month and want it finished before I turn 35.
Title: Re: Mortgage Payoff Club!!
Post by: frizzywhiskers on July 09, 2015, 08:27:50 PM
Halfway through 2015 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

We are hammering this baby down!  We are on track for a balance of about $285,000 by year end if all goes as planned and pushing hard for a Sept. 2018 finish.  We've paid off over $110,000 since we started in 2013, while continuing to invest for retirement - whoot!!
Title: Re: Mortgage Payoff Club!!
Post by: PharmaStache on July 09, 2015, 08:33:22 PM
Hi!  We are not paying off our mortgage super aggressively, but still want to pay it off early.

2009: 165k
2014: 110k
2015: 90k
2019: Goal to be at 0 (to coincide with our current 5 year term ending)
Title: Re: Mortgage Payoff Club!!
Post by: Bee21 on July 27, 2015, 05:01:04 PM
Newbie here- I'm totally in! The plan is to pay off the last 25k by the end of the year and be mortgage free. I live w a very non-mustachian Husband and paying off the mortgage early is the only investment decision I managed to persuade him to make.
Title: Re: Mortgage Payoff Club!!
Post by: seemsright on July 28, 2015, 01:32:44 PM
26 days!

The only reason we have to wait is because we have a prepayment penalty. But we are very excited.
Title: Re: Mortgage Payoff Club!!
Post by: Neustache on July 28, 2015, 02:08:28 PM
^congrats seemsright!! 

What was your beginning balance, and how long did it take you to pay it off? 
Title: Re: Mortgage Payoff Club!!
Post by: plainjane on July 29, 2015, 09:19:55 AM
Newbie here- I'm totally in! The plan is to pay off the last 25k by the end of the year and be mortgage free. I live w a very non-mustachian Husband and paying off the mortgage early is the only investment decision I managed to persuade him to make.

Have you started to discuss what you will do with the extra cash flow?  With a non-mustachian husband it's probably better to get it agreed upon before he starts spending it all.
Title: Re: Mortgage Payoff Club!!
Post by: seemsright on July 29, 2015, 03:17:49 PM
^congrats seemsright!! 

What was your beginning balance, and how long did it take you to pay it off?
We took 13 years to pay it off we started at $148K.

We also had student loans that we had to pay it back my BS degree cost us 45K. Hubby had a side hussel the last few years that took a ton of time but we were able to bank the profit to pay off the house.
Title: Re: Mortgage Payoff Club!!
Post by: K-ice on July 31, 2015, 11:15:27 AM
Started with $325,000 at 4% for 25y.

Threw an average of 35K at it every year. The max allowed was 48K but we couldn't come up with that. 

I have noticed that most long term mortgages can be paid off within 5 years if you max out, but stay within, the bank's pre-pay limits.

At renewal time (5y mark) we were not happy with the renewal terms.

So SO paid off half. I threw a good chunk down and got a LOC at 1% on the remaining.  Paid that off in 6 months!!

We basically had no additional savings during this time so that could hurt our investments in the longterm but being mtg free feels good!
Title: Re: Mortgage Payoff Club!!
Post by: hdatontodo on August 02, 2015, 07:08:51 AM
[January] $99K mortgage balance...
July 7, $27K left. 6 more payments from Aug->Jan. I hope my job holds out.

So the Mrs has been getting irritated about BOA not properly posting occasional Principal Payment Only checks that I mail in after the monthly $5K automatic payments ($2K + 3K extra) on our 7-year-old, 15-year-loan. I have to get her to call them about her loan and repost it.

So also gets irritated when I have her move the automate payment date or change the pay amount based on pay dates and cash flow. (She likes just to have her automatic-payment set up and spend her evenings with hours of Facebook and Real Housewives. )

So here's the facepunch-worthy action I took. I made a normal August $2K payment. I told her to cancel her $5K automatic payment. I borrowed $20K with a short term 401K loan and did a principal payment, leaving the mortgage balance at under $5K. Later this week, she'll get a payoff figure and bring them a cashiers check from her Wells Fargo account for the payoff.

My original plan was to have the mortgage paid off by the beginning of January 2016. Now, it will be paid off in August, and I'll have payroll deductions until January. I also told her that I'm not going to give her any money monthly until next year so I can build my savings back up. I had used my savings, person property sales (Mustang, motor scooter, etc) and almost all my income to get this year's starting balance of $99K paid off.

The incentive for starting this project in 2014, when we owed $166K, was that I did a cash flow sheet, and found that paying off the loan and eliminating the payment (and $4,500/year interest) would make for a better cash flow if I got laid off in 2016 (after the contract that pays my salary is gone). We could live on her salary, and even if she wanted me to take 1/2 the family expenses out of my 401K (using the age 55 rule), it wouldn't be much.

Title: Re: Mortgage Payoff Club!!
Post by: Debts_of_Despair on August 02, 2015, 08:40:35 PM
^^^
That is all really confusing.  I have KeyBank and I do everything on the website.  Anytime I make a payment greater than the minimum due it asks me if I want to apply it to principal or apply it to next monthly payment.  I also cancelled auto debit since I began my payoff project.
Title: Re: Mortgage Payoff Club!!
Post by: rjbf65 on August 06, 2015, 11:31:21 AM
I'll join.

Started June 2014 at 71k.

It's currently $55k.  Goal is to finish it off by next June.   Have 20k in cash that would finish it off by then.  We are currently investing 15% as well.   Basically doing the Dave Ramsey plan.

Currently down to $51,500.  Hoping to get under $50K a month from today.
Title: Re: Mortgage Payoff Club!!
Post by: Comar on August 08, 2015, 06:07:33 PM
I'm joining in.

I have a house in Iceland. Bought it for 123k dollars (16.5 million icelandic crowns) in 2012. Started making extra payments early last year and am now down to 88.4k dollars. Currently I throw about 560 dollars at it each month. I have also thrown some extra cash at the mortage, such as tax repayments and such.

From the start I have used the strategy of adding to the payments each month. Each downpayment reduces the monthly mortage payment so for the next downpayment I have added the extra dollars the mortage payment has been reduced. Call it a snowball strategy?

My goal is to KO the mortage in 5 years. I'm turning 30 this month and want it finished before I turn 35.
87.5 k left. Paid 562 extra this month.
Title: Re: Mortgage Payoff Club!!
Post by: Neustache on August 10, 2015, 04:33:55 PM
I'm here!!

Starting Mortgage:  123K
Current Balance: 122K

Mortgage is at 4.25% with PMI, so while I may switch up strategies at some point, right now the goal is to get the PMI off as quickly as possible, hopefully by August 2015 (we only had 5% down).  If we don't switch strategies, goal is to pay this off in the next 3 or 4 years. 


PMI is on my mind as well - pay off all other debt first and then get rid of that pointless $118 fee that goes to waste every month.  I plan to get rid of it by December 2015.  Good luck to you :)

I love seeing everyone else's progress on this thread.


Current principle:  $103,457.43 - PMI is OFF

Now I switch gears to max out IRAs for 2015, then in 2016 we will have to payoff our foundation repairs (currently at 0%), max out IRA's and pay for school for me...so not a lot of progress will happen on the mortgage front.  I'll see you all again sometime in 2017.  I'll still watch and read others make progress towards their goals.  Good luck, everyone!!


Title: Re: Mortgage Payoff Club!!
Post by: eyePod on August 10, 2015, 05:54:06 PM
OH oh, for PMI folk.

We are currently at 80.1% after throwing another 2k at the mortgage. I contacted my bank to find out the process for removal of PMI.

We had put 10% down last July, so we're just over a year.

They said that if we are at 80% of the loan value, then we could request PMI cancellation with 2 years of payments. So we're way ahead of that. If we're below 78%, then we can request it then. So that's another bit of change now that we have to come up with. I only talked with one of the loan guys at our bank, not the actual escrow group though.

Then we have to get it appraised, and then we have to figure out what happens if the home value is lower and all that. It's a bunch of malarky. The inspection will cost between $400 and $450, but that saves us $5k over the rest of the loan.

Really frustrated but we knew that we'd be a year out till we had the extra 10% based on the new job and all that, so we knew what we were getting into and the bank needs to de-risk. I get it. I just wish it wasn't so damn hard to get out of this once you're in. It's definitely convoluted for a reason.

We probably plan on paying the extra $81 per month that goes to PMI to our loan principal. We don't know if we're going to pay off the whole home loan early, but if the market is only staying status quo, that might be our plan of attack.
Title: Re: Mortgage Payoff Club!!
Post by: Neustache on August 10, 2015, 07:20:45 PM
Oh man, that sucks.   My credit union is nothing like that...just as soon as you drop down below 80% they take it off.  I e-mailed their loan servicing department and it was gone within 24 hours.  They don't require an appraisal or anything like that, unless you refi. 

I'm sorry getting rid of your PMI is such a PITA, eyePod!
Title: Re: Mortgage Payoff Club!!
Post by: eyePod on August 11, 2015, 05:58:25 AM
Oh man, that sucks.   My credit union is nothing like that...just as soon as you drop down below 80% they take it off.  I e-mailed their loan servicing department and it was gone within 24 hours.  They don't require an appraisal or anything like that, unless you refi. 

I'm sorry getting rid of your PMI is such a PITA, eyePod!

Maybe I was just talking to the wrong person. I'm going to call the loan and escrow department to see if they can make it any easier. It can't hurt.
Title: Re: Mortgage Payoff Club!!
Post by: asauer on August 11, 2015, 07:13:09 AM
Woohoo!  Down to 117,930!  Started 3 years ago at 249K!  Saw the principal to interest number flip to the next hundred too- I get way too excited about that.
Title: Re: Mortgage Payoff Club!!
Post by: Neustache on August 11, 2015, 07:16:06 AM
eyePod...yeah...double check.  I've only done it through my credit union, I have no idea what the process is for other banks.  My credit union also pays me a bonus each year depending on what accounts I have with them.  Last year it was over $400 and this year will be around $300 (no car loan this year, so it's less).  I love credit unions.
Title: Re: Mortgage Payoff Club!!
Post by: BlueHouse on August 12, 2015, 09:27:06 AM
I'm joining the club!!  I want to be out from under the crushing debt of my mortgage.
I've been on the fence about this for a few years and stashing all of my rental income into a sinking fund invested in VTSAX.  Last month I sold all of the sinking fund and I took a big chunk from a cash account to pay down the mortgage prior to a reamortization.  Goal is to pay the mortgage down to a point that I could afford payments even if I'm not employed.  That might be all the way to zero, or it might not.  Even with my plans to continue paying 1000 extra each month, I'm still a looooong way away from retiring this debt, so I'm trying to speed that up.  I still have a long time to figure out the end result.

I'm in a HCOL city in a big house.  I'll show progress in terms of % paid off against initial home value (equity against initial sale price).

Progress (%equity against initial sale price)
Title: Re: Mortgage Payoff Club!!
Post by: Neustache on August 12, 2015, 11:23:52 AM
^Nice progress, BlueHouse!

I'm considering a mortgage recast eventually, too.  But I'm going to go back to work fulltime right when it'd be worth it to do the recast, and by then we'd only have a year or two left on the mortgage with my extra earnings.  We'll see when we get there.
Title: Re: Mortgage Payoff Club!!
Post by: Debts_of_Despair on August 12, 2015, 03:18:12 PM
Pay week!  Down to 65.3k.

61k at time of this post.

Now at a little over 50k.  Wife is a teacher and gets a lump sum check at the end of the school year.  Put all of it into mortage.

Right now I'm ahead of schedule.  This is way easier than I thought it would be so far.

46.1k.  Kind of in the doldrums right now with only one paycheck coming in and had some unexpected expenses pop up.  Should be ready to hit it hard in September when wife goes back to work and gets a small raise.  Payoff before the end of the calendar year is not out of the question...
Title: Re: Mortgage Payoff Club!!
Post by: tonysemail on August 20, 2015, 12:17:52 PM
Earlier this year, we refinanced our home with cash out for the purposes of paying off our rental property.
We finally made it to the finish line this week!
Went to the post office and got a money order for the pay off balance and sent it in via certified mail.  Quick and easy.
This rental property was bought in 2007 at the height of the housing market :(
Now it's generating a tidy profit which we will use to pay down the mortgage on another rental property.
My balance on mortgage #2 is $213,425.
Title: Re: Mortgage Payoff Club!!
Post by: BlueHouse on August 20, 2015, 07:24:18 PM
Earlier this year, we refinanced our home with cash out for the purposes of paying off our rental property.
We finally made it to the finish line this week!
Went to the post office and got a money order for the pay off balance and sent it in via certified mail.  Quick and easy.
This rental property was bought in 2007 at the height of the housing market :(
Now it's generating a tidy profit which we will use to pay down the mortgage on another rental property.
My balance on mortgage #2 is $213,425.
I don't understand the purpose in paying off a rental prop before your own home. I use the expenses on my rental to offset rental income. I can't do that with my personal property. What am I missing? 
Title: Re: Mortgage Payoff Club!!
Post by: eyePod on August 21, 2015, 08:04:58 AM
Oh man, that sucks.   My credit union is nothing like that...just as soon as you drop down below 80% they take it off.  I e-mailed their loan servicing department and it was gone within 24 hours.  They don't require an appraisal or anything like that, unless you refi. 

I'm sorry getting rid of your PMI is such a PITA, eyePod!

Maybe I was just talking to the wrong person. I'm going to call the loan and escrow department to see if they can make it any easier. It can't hurt.

I called the actual department that handles this stuff and all of the information I was given was wrong. It might have been true if I wanted to remove the escrow account, but for PMI only, I just needed to have a letter written and fax it over. We just went over the 80% mark (79.99) so we sent the letter first thing on Monday morning. I'm going to call next week since we haven't heard anything yet.

Thanks for letting me know that it shouldn't have been that hard.

Lesson learned - loan officers are very knowledgeable at getting a sale. They don't know how their own systems work otherwise.
Title: Re: Mortgage Payoff Club!!
Post by: tonysemail on August 21, 2015, 11:14:57 AM
I don't understand the purpose in paying off a rental prop before your own home. I use the expenses on my rental to offset rental income. I can't do that with my personal property. What am I missing?

the mortgage interest on my house can be deducted from my W-2 income.
Are you using itemized deductions or standard deduction?
Title: Re: Mortgage Payoff Club!!
Post by: tomsang on August 22, 2015, 12:09:44 AM
I don't understand the purpose in paying off a rental prop before your own home. I use the expenses on my rental to offset rental income. I can't do that with my personal property. What am I missing?

the mortgage interest on my house can be deducted from my W-2 income.
Are you using itemized deductions or standard deduction?

What country do you live in?  Sounds like the US, as you said W-2, but mortgage interest does not get deducted from W-2 income. It becomes an itemized deduction if they are greater than the standard deduction.

Offsetting rental income is usually better if your AGI is below a $100,000 and the losses are below $25,000. Also the bankruptcy rules would probably say it is better to have a paid off personal residence vs a rental.
Title: Re: Mortgage Payoff Club!!
Post by: BlueHouse on August 22, 2015, 05:03:05 AM
I don't understand the purpose in paying off a rental prop before your own home. I use the expenses on my rental to offset rental income. I can't do that with my personal property. What am I missing?

the mortgage interest on my house can be deducted from my W-2 income.
Are you using itemized deductions or standard deduction?

What country do you live in?  Sounds like the US, as you said W-2, but mortgage interest does not get deducted from W-2 income. It becomes an itemized deduction if they are greater than the standard deduction.

Offsetting rental income is usually better if your AGI is below a $100,000 and the losses are below $25,000. Also the bankruptcy rules would probably say it is better to have a paid off personal residence vs a rental.
I do itemize for the house and other stuff. My AGI is above 100 and being able to offset rental income is about the only thing that helps out on that property. I'll pay off my personal property long before I pay off the rental. If I go belly up and have to risk losing one, I don't want it to be my personal home! 
Title: Re: Mortgage Payoff Club!!
Post by: LadyMaWhiskers on August 22, 2015, 08:30:51 AM
I did a similar thing to tonysemail - took a cash-out on a paid-for personal residence to pay off a rental earlier this year. Now trying to go full-steam and payoff the mortgage in 7 years or less.

Taxes were roughly a wash - interest on Schedule E or Schedule A (I'm in the U.S.) My rational came down to the type of loan I could get on the properties.

Home loan: Fixed rate @ 3.25% interest
Commercial loan on rental (12-unti residential): 5.5% fixed for 5 year (through 2018) then yearly readjustments and a balloon at 10yrs.

Even if the rental loan were a 1-4 family, the rate is higher when you don't live there. If equity is tight, it would be better to have the home paid for, but if one whole property is paid off, equity seems good!


Title: Re: Mortgage Payoff Club!!
Post by: BlueHouse on August 23, 2015, 08:12:11 PM
I did a similar thing to tonysemail - took a cash-out on a paid-for personal residence to pay off a rental earlier this year. Now trying to go full-steam and payoff the mortgage in 7 years or less.

Taxes were roughly a wash - interest on Schedule E or Schedule A (I'm in the U.S.) My rational came down to the type of loan I could get on the properties.

Home loan: Fixed rate @ 3.25% interest
Commercial loan on rental (12-unti residential): 5.5% fixed for 5 year (through 2018) then yearly readjustments and a balloon at 10yrs.

Even if the rental loan were a 1-4 family, the rate is higher when you don't live there. If equity is tight, it would be better to have the home paid for, but if one whole property is paid off, equity seems good!
Oh yes, I wasn't considering the different interest rates. Mine is still based on a personal rate because I initially lived in it. I would like to refinance, but don't want the higher rate. Maybe not a bad option for me after all. Need to think on that some more. Thanks! 
Title: Re: Mortgage Payoff Club!!
Post by: plainjane on August 25, 2015, 08:48:25 PM
I've decided to shift my approach to paying off the mortgage.  I had been planning on drawing down the house eFund, using that savings to pay down the mortgage, and then rebuilding that fund.

I've decided to keep that fund high as a hedge against uncertainty, but I'll stop adding to it.  Instead, I'll redirect the cash flow that would have gone to rebuilding to fund to the mortgage.  That should put us on track for final pay-off March 2016 if all goes well.  And then our annual expenses will be _sweet_.
Title: Re: Mortgage Payoff Club!!
Post by: SwordGuy on August 25, 2015, 09:06:55 PM
We paid off our home mortgage about 5 years ago.  It was a great feeling!  I can promise you all it's worth working hard to make happen!


We're taking out a home equity loan to finance purchasing another rental property and its renovation. 
Our intent is to pay it off within 5 years, maybe less, if the other rental properties do well.
Title: Re: Mortgage Payoff Club!!
Post by: seemsright on August 26, 2015, 09:14:13 PM
Done...paid it off today!

Title: Re: Mortgage Payoff Club!!
Post by: K-ice on August 26, 2015, 09:35:14 PM
@ seemsright

Congrats!
Title: Re: Mortgage Payoff Club!!
Post by: plainjane on August 27, 2015, 04:32:24 AM
Done...paid it off today!

Congratulations!
Title: Re: Mortgage Payoff Club!!
Post by: eyePod on August 28, 2015, 06:15:11 AM
PMI Update. I received wrong information again from the 2nd person. Now they say that I do need to be at 78% since I don't have 24 months of payment history. If I were at 80% and had the 2 years of payment history I'd be fine. So even though I've paid off 10% in just about a year, they really need that extra 2%. I won't have the 5k for a few months so I'm super frustrated. They're basically milking me for a few hundred dollars of PMI. I let them know that when I refinance, there's literally no chance that I'll work with this bank. It shouldn't be this hard to remove PMI.
Title: Re: Mortgage Payoff Club!!
Post by: Neustache on August 28, 2015, 07:55:47 AM
PMI Update. I received wrong information again from the 2nd person. Now they say that I do need to be at 78% since I don't have 24 months of payment history. If I were at 80% and had the 2 years of payment history I'd be fine. So even though I've paid off 10% in just about a year, they really need that extra 2%. I won't have the 5k for a few months so I'm super frustrated. They're basically milking me for a few hundred dollars of PMI. I let them know that when I refinance, there's literally no chance that I'll work with this bank. It shouldn't be this hard to remove PMI.

Well, that's a bummer.  You know, we were right at 2 years of payments when we got to 80% so I have no idea if that was an issue at our bank. 
Title: Re: Mortgage Payoff Club!!
Post by: Debts_of_Despair on August 29, 2015, 03:06:41 PM
Done...paid it off today!

Congrats!
Title: Re: Mortgage Payoff Club!!
Post by: Money Badger on August 29, 2015, 03:17:51 PM
Done...paid it off today!

Hell yeaaaahhhh!!!
Title: Re: Mortgage Payoff Club!!
Post by: Money Badger on August 29, 2015, 03:22:56 PM
Chipping away...    Another grand to equity so 238K as of today...    with the recent market drama, was also able to pick up another $250/month in income producing funds at 5+ year market lows...   Accelerating the mortgage payoff!   Once the mortgage is dead, the jump to hyperspace (towards FI) begins!!
Title: Re: Mortgage Payoff Club!!
Post by: eyePod on August 31, 2015, 04:13:12 AM
PMI Update. I received wrong information again from the 2nd person. Now they say that I do need to be at 78% since I don't have 24 months of payment history. If I were at 80% and had the 2 years of payment history I'd be fine. So even though I've paid off 10% in just about a year, they really need that extra 2%. I won't have the 5k for a few months so I'm super frustrated. They're basically milking me for a few hundred dollars of PMI. I let them know that when I refinance, there's literally no chance that I'll work with this bank. It shouldn't be this hard to remove PMI.

Well, that's a bummer.  You know, we were right at 2 years of payments when we got to 80% so I have no idea if that was an issue at our bank.

The plot thickens. Our contract says that we have to have no late payments within 2 years. We don't! It doesn't say "for" to years, so they're misinterpreting it. I'm going to be calling them again today and getting ready to escalate as needed since they're in breach of the contract.
Title: Re: Mortgage Payoff Club!!
Post by: Bee21 on September 02, 2015, 03:44:02 AM
The balance looks good. I think we can do it by the end of November/early December if we reshuffle money sitting around in various accounts. We are extremely motivated now as it looks like HB’s job is on the line.
Title: Re: Mortgage Payoff Club!!
Post by: PFHC on September 02, 2015, 04:18:10 AM
C'mon guys.  Let's apply some perspective here. 

It doesn't matter if keeping a mortgage and investing the balance can make you more money over the long haul.  Paying off a mortgage, if that's what someone wants to do, is an awesome accomplishment and deserves praise rather than criticism. 

Save the face punches for people who really need them!  I'm borderline on dishing out a few for being so focused on maximizing returns that we neglect to value and recognize tremendous savings accomplishments.
Now you're talkin.
Title: Re: Mortgage Payoff Club!!
Post by: Neustache on September 02, 2015, 05:53:34 AM
 
[/quote]

The plot thickens. Our contract says that we have to have no late payments within 2 years. We don't! It doesn't say "for" to years, so they're misinterpreting it. I'm going to be calling them again today and getting ready to escalate as needed since they're in breach of the contract.
[/quote]

Good luck!  Keep us posted.  I can't recall...how much is your PMI a month?  Ours was $51 so while not life changing, still nice to have gone.
Title: Re: Mortgage Payoff Club!!
Post by: rjbf65 on September 04, 2015, 06:53:00 AM
I'll join.

Started June 2014 at 71k.

It's currently $55k.  Goal is to finish it off by next June.   Have 20k in cash that would finish it off by then.  We are currently investing 15% as well.   Basically doing the Dave Ramsey plan.

Currently down to $51,500.  Hoping to get under $50K a month from today.

Down to $49660.  Was able to throw an extra $1555 at it this time.  Budgeting to be able to throw an extra $2500 next month.
Title: Re: Mortgage Payoff Club!!
Post by: Debts_of_Despair on September 12, 2015, 08:52:10 AM
Pay week!  Down to 65.3k.

61k at time of this post.

Now at a little over 50k.  Wife is a teacher and gets a lump sum check at the end of the school year.  Put all of it into mortage.

Right now I'm ahead of schedule.  This is way easier than I thought it would be so far.

46.1k.  Kind of in the doldrums right now with only one paycheck coming in and had some unexpected expenses pop up.  Should be ready to hit it hard in September when wife goes back to work and gets a small raise.  Payoff before the end of the calendar year is not out of the question...

42.6k.  Projecting payoff on 1/30/16.
Title: Re: Mortgage Payoff Club!!
Post by: nora on September 14, 2015, 01:51:37 AM
Down to 140000 but have another 60000 of credit cards on 0% interest balance transfers to pay off at the end.
Title: Re: Mortgage Payoff Club!!
Post by: Mntngoat on September 16, 2015, 08:37:36 AM
Being free from payments is the goal. As far as "The only minor benefit I can think of to still hold a mortgage is the write off for mortgage interest paid." - doesn't make sense to pay $10 to the bank to get $3 back from the government.

I'll just be able to stop paying that $10 to the bank and keep my money.

  I agree  no payments is my goal too.    we got a $410K  Mortgage in 2007, with the extra payments and refiing  we are down to  18 years today.   I won't miss the interest write off  when its paid off  I'd rather  not have the payment. As for investing the extra payment instead of paying off early   that a whole nother topic.

ML
Title: Re: Mortgage Payoff Club!!
Post by: seemsright on September 16, 2015, 07:46:05 PM
Being free from payments is the goal. As far as "The only minor benefit I can think of to still hold a mortgage is the write off for mortgage interest paid." - doesn't make sense to pay $10 to the bank to get $3 back from the government.

I'll just be able to stop paying that $10 to the bank and keep my money.

  I agree  no payments is my goal too.    we got a $410K  Mortgage in 2007, with the extra payments and refiing  we are down to  18 years today.   I won't miss the interest write off  when its paid off  I'd rather  not have the payment. As for investing the extra payment instead of paying off early   that a whole nother topic.

ML

We did the math...If we would have left our mortgage the way it was the day that the bank gave it to us...we would have spent a 100K more than we did. We played the refinance game, and payed extra. I do not believe for a minute that I would have made a 100k by investing the extra payments. If anyone has a idea how to make that kinda cash in 13 years (that is how long it took us to pay off the house) then I am all ears.
Title: Re: Mortgage Payoff Club!!
Post by: McGeens on September 17, 2015, 10:28:32 PM
I'be been onboard with this challenge for four years now. We started with our mortgage in 2008 with $230k owing. When our first child was born in 2011, we went down to one income and a deep desire to get rid of the debt. After contributing to superannuation (Australia), we've been throwing all our extra savings and surpluses into this sucker.

Balance today is $19200, and I CAN'T WAIT to make that final payment !! We're aiming for January 2016 free and clear- what a way to start the new year!! I love reading this thread, there's just no one in real life to discuss this with (we're 33 and 38).
Title: Re: Mortgage Payoff Club!!
Post by: allsummerlong on September 18, 2015, 08:35:46 AM
I'be been onboard with this challenge for four years now. We started with our mortgage in 2008 with $230k owing. When our first child was born in 2011, we went down to one income and a deep desire to get rid of the debt. After contributing to superannuation (Australia), we've been throwing all our extra savings and surpluses into this sucker.

Balance today is $19200, and I CAN'T WAIT to make that final payment !! We're aiming for January 2016 free and clear- what a way to start the new year!! I love reading this thread, there's just no one in real life to discuss this with (we're 33 and 38).

Great job!

I could not agree more on the bolded part... I really appreciate the support & stories from this thread :)

Title: Re: Mortgage Payoff Club!!
Post by: Neustache on September 18, 2015, 10:01:03 AM
I'be been onboard with this challenge for four years now. We started with our mortgage in 2008 with $230k owing. When our first child was born in 2011, we went down to one income and a deep desire to get rid of the debt. After contributing to superannuation (Australia), we've been throwing all our extra savings and surpluses into this sucker.

Balance today is $19200, and I CAN'T WAIT to make that final payment !! We're aiming for January 2016 free and clear- what a way to start the new year!! I love reading this thread, there's just no one in real life to discuss this with (we're 33 and 38).

Wow!  That's really impressive - maybe when you reach your goal you can give more details on a journal.  :D  Makes my goal of paying off 103K over the next 5 years look pretty sorry.  Ha!
Title: Re: Mortgage Payoff Club!!
Post by: McGeens on September 18, 2015, 10:48:22 PM
Neustashe, I think it makes your goal maybe seem a bit more achievable. I have lurked on this thread for ages, I find great comfort knowing we're not alone in our quest.

I must say that pumping (almost) everything extra into the mortgage became very boring after a while, especially when unexpected expenses popped up and progress slowed. We celebrated each $10k milestone, but it does sometimes feel like the end will never come. I'm mighty tired of working just to pay off the mortgage! The new year will see us start investing in ETFs or similar, a first for anyone in our families/friend group. Once more we'll seek support from Internet strangers on the same path. I'll update here when it's paid off- it does feel like the finish line is in sight!
Title: Re: Mortgage Payoff Club!!
Post by: Debts_of_Despair on September 21, 2015, 07:52:14 PM
I'be been onboard with this challenge for four years now. We started with our mortgage in 2008 with $230k owing. When our first child was born in 2011, we went down to one income and a deep desire to get rid of the debt. After contributing to superannuation (Australia), we've been throwing all our extra savings and surpluses into this sucker.

Balance today is $19200, and I CAN'T WAIT to make that final payment !! We're aiming for January 2016 free and clear- what a way to start the new year!! I love reading this thread, there's just no one in real life to discuss this with (we're 33 and 38).



Great job!

I could not agree more on the bolded part... I really appreciate the support & stories from this thread :)

So true!  The topic of mortgages came up the other day with friends.  I didn't dare mention where I'm at. ☺
Title: Re: Mortgage Payoff Club!!
Post by: Threshkin on September 22, 2015, 10:11:20 AM
I'be been onboard with this challenge for four years now. We started with our mortgage in 2008 with $230k owing. When our first child was born in 2011, we went down to one income and a deep desire to get rid of the debt. After contributing to superannuation (Australia), we've been throwing all our extra savings and surpluses into this sucker.

Balance today is $19200, and I CAN'T WAIT to make that final payment !! We're aiming for January 2016 free and clear- what a way to start the new year!! I love reading this thread, there's just no one in real life to discuss this with (we're 33 and 38).



Great job!

I could not agree more on the bolded part... I really appreciate the support & stories from this thread :)

So true!  The topic of mortgages came up the other day with friends.  I didn't dare mention where I'm at. ☺

I hear you on this.  It seems to be a badge of honor to have the biggest mortgage with the most dismal prospects of paying it off.
Title: Re: Mortgage Payoff Club!!
Post by: rjbf65 on September 22, 2015, 10:22:54 AM
I'be been onboard with this challenge for four years now. We started with our mortgage in 2008 with $230k owing. When our first child was born in 2011, we went down to one income and a deep desire to get rid of the debt. After contributing to superannuation (Australia), we've been throwing all our extra savings and surpluses into this sucker.

Balance today is $19200, and I CAN'T WAIT to make that final payment !! We're aiming for January 2016 free and clear- what a way to start the new year!! I love reading this thread, there's just no one in real life to discuss this with (we're 33 and 38).



Great job!

I could not agree more on the bolded part... I really appreciate the support & stories from this thread :)

So true!  The topic of mortgages came up the other day with friends.  I didn't dare mention where I'm at. ☺

I hear you on this.  It seems to be a badge of honor to have the biggest mortgage with the most dismal prospects of paying it off.


My wife and I would like to upgrade in home at some point.. but it's going to be a tough decision to go back into debt to do it.  Maybe we can put it off a few years, but it's going to happen at some point.  I can't wait to pay my current one off.  I'm just a few months away from having a greater amount of cash in the bank versus mortgage balance.  Once that happens, and I have a $10K buffer, I'm pulling the trigger.
Title: Re: Mortgage Payoff Club!!
Post by: K-ice on September 22, 2015, 12:24:33 PM
Here is my mortgage payoff story.  Our mortgage was paid off within the past year. Of course I want to brag, don’t we all ;). But I also want to show what is possible. We were able to do this on a combined income between $85K and $150K depending on the year. In addition to that, one year we cashed out $40K in stocks as a one-time extra payment.  We did very little other savings and focused every extra penny on the mortgage. (Yeah, Yeah invest vs mtg is a whole other debate.) We had a blended mtg HELOC so every payment added to our “squishy debt” fund. This actually gave us more confidence to pay larger lumps.
 
Here is the breakdown starting with $326,500. 25y at 4% pmt about $1700,  max extra lump sums allowed per year $48K

Y1 $326,500   extra pmt $45,000 (Good year at new job)
Y2 $273,500   extra pmt $30,000 (Had a baby.)
Y3 $233,000   extra pmt $0  :(  (Work was unstable. We still stashed some cash.)
Y4 $221,000   extra pmt $48,000  (Yeah! We hit the max lump sum.)
Y5 $160,000   extra pmt $57,500 (This included double down of  $1700 extra for 6 months)

Balance on renewal about $90,000 (We were pissed at the bank and didn’t want to renew.)
“What do you mean you won’t renew, what bank are you transferring to?”

SO now has $45,000 extra
I had $30,000 extra
Argghhhh not quite enough.

I took out a LOC for remaining $15,000  (Mortgage officially paid off but no Champaign yet. SO doing their own dance of joy.)
LOC paid off within 6 months.  (Cork popped!)
Time to pay 5y 6 months

Total interest paid about $45,000 (This still seems like a lot considering how hard we hit the M0F**ing extra payments)
Total interest we would have paid if we took the scheduled 25y  $189,000 
Title: Re: Mortgage Payoff Club!!
Post by: Money Badger on September 23, 2015, 06:57:36 PM
Niiiice K-ice!   

Putting an extra grand towards our $238K beast this month after actually getting $400 for a surfboard I'd inherited and saving other shekels so down to $236K...   Mulling over putting a chunk before end of year so your payoff results are tempting me...   

Title: Re: Mortgage Payoff Club!!
Post by: The knitter on September 26, 2015, 06:28:06 AM
PMI Update. I received wrong information again from the 2nd person. Now they say that I do need to be at 78% since I don't have 24 months of payment history. If I were at 80% and had the 2 years of payment history I'd be fine. So even though I've paid off 10% in just about a year, they really need that extra 2%. I won't have the 5k for a few months so I'm super frustrated. They're basically milking me for a few hundred dollars of PMI. I let them know that when I refinance, there's literally no chance that I'll work with this bank. It shouldn't be this hard to remove PMI.

Well, that's a bummer.  You know, we were right at 2 years of payments when we got to 80% so I have no idea if that was an issue at our bank.

The plot thickens. Our contract says that we have to have no late payments within 2 years. We don't! It doesn't say "for" to years, so they're misinterpreting it. I'm going to be calling them again today and getting ready to escalate as needed since they're in breach of the contract.

My husband and I bought our home in 2013. We were told PMI at this point no longer automatically comes off at 80% equity. (New rule that says it is with you for the life of the loan, which is outrageous.) Our plan has been to refinance to a new loan. We are a couple weeks away (finishing up a project before our re-assessment).

Is it possible we were misinformed? I'd much rather have the PMI come off by itself. We have a good interest rate now and we are worried we will miss the window before the fed increases the rates.
Title: Re: Mortgage Payoff Club!!
Post by: Neustache on September 26, 2015, 11:25:03 AM
The knitter -

FHA loans (to the best of my knowledge) do keep PMI for the life of the loan.  We have a conventional loan.  You might look into refinancing if you have enough equity now and the rate would be better.
Title: Re: Mortgage Payoff Club!!
Post by: The knitter on September 27, 2015, 09:01:55 PM
Ah, thanks Neustache. After I posted I did some searching around and saw some articles about conventional loans that allowed for smaller down payments.

We were first time home buyers and didn't know that was an option. We were told our only option was an FHA loan. It may have been true at the time, but we probably should have researched more.

Here's hoping we can refinance before interest rates go up!
Title: Re: Mortgage Payoff Club!!
Post by: mom22boys on September 28, 2015, 07:32:23 PM
I just started the refinance ball rolling today. I bought my house less than a year ago, and decided I wanted to move from a 30yr at 4.125 to a 15yr mortgage. Got locked in for 3.375 with only around $400 closing costs (in total). My goal is still to pay it off within 10 years, but I first want to pay off the darn specials.... much higher interest rate... then start plugging extra payments to the mortgage. Just the refinance alone with no extra payments will save me over 22k. Can't wait to get this mortgage gone!
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on September 28, 2015, 08:17:46 PM
I'm in. Why?

- I can "sell" mortgage paydown to DW. I can't "sell" investment vs. paydown in a down equities market.
- I have an obligation to DW in case I'm hit by a bus.
- In the "hit by a bus" scenario, investments have to be managed. A paid off mortgage is clear and simple.
- refi objective in January 2016 will make the house "as cheap as a double wide"
- My timeframe to FIRE is 5 years, not 30 years.
- While I do enjoy buying more value in this down market, I'm using a kind of "blended" approach by paying some against the mortgage. That means my total YTD returns are still beating the S&P while I'm simultaneously lowering risk.
- I'm building in solar hot water heat, solar PV panels, more efficient heat pump and the lot has an almost endless supply of hardwood for burning. That means my home is NOT a fungible asset.

I like the comments above in the thread about relative risk. I got wiped out in Thermo* stocks when the principals set a honeypot and then obliterated the stock value. It wasn't on the scale and visibility of an Enron, but it had a similar effect on me. No one can decide one day your house is worthless - although they can take it from you if it's not paid off free and clear.

Title: Re: Mortgage Payoff Club!!
Post by: Neustache on September 29, 2015, 05:52:25 AM
^ Yep, mefla...that's kind of where we are.  Hubby wants to pay down the mortgage - I've got him talked into doing t. IRA contributions though, to decrease taxes, but after that any extra goes to mortgage pay down.
Title: Re: Mortgage Payoff Club!!
Post by: plainjane on September 30, 2015, 07:05:44 AM
It was painful to wait until 9am to see the numbers flip over this morning, but we're officially below $20k.
Title: Re: Mortgage Payoff Club!!
Post by: cheddarpie on September 30, 2015, 12:06:31 PM
That way, if the bear comes and takes all my porridge, I can still live comfortably working whatever job I can find and I don't have to worry about living in my car or moving.

This. It's not about maximizing financial gains, it's about peace of mind and almost-guaranteed long-term stability.

I'll have my $250+k mortgage paid off in less than five years from inception. I'm fully funding my retirement accounts and have a hefty emergency fund in the meantime and A-OK missing out on any potential gains (and losses!) in my liquid stash as I work on my mortgage payoff goal. Mortgage first, stash next, then FIRE with no ongoing payment or debt obligations other than utilities and taxes.
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on September 30, 2015, 02:08:31 PM
That way, if the bear comes and takes all my porridge, I can still live comfortably working whatever job I can find and I don't have to worry about living in my car or moving.

This. It's not about maximizing financial gains, it's about peace of mind and almost-guaranteed long-term stability.

I'll have my $250+k mortgage paid off in less than five years from inception. I'm fully funding my retirement accounts and have a hefty emergency fund in the meantime and A-OK missing out on any potential gains (and losses!) in my liquid stash as I work on my mortgage payoff goal. Mortgage first, stash next, then FIRE with no ongoing payment or debt obligations other than utilities and taxes.

cheddarpie, I am doing almost the same thing. I put the stash first and mortgage second, but that's only because I pay the mortgage with post-tax money and stash using the pre-tax sheltering that the 401k's provide. (I have a Roth IRA but the yearly limits on that keep it a distant third.) Like you, I can't wait to get to only utilities and taxes as ongoing financial obligations. If I'm still working, I'll be ramming cash in the stash with prejudice.

Accidental Miser was hilarious and true with that quote. See, that's the crucial thing here: you can lose the house and all you've invested in it if you lose the ability to make the payments via job loss or sickness. What started me on this path is that I projected forward about 15 years and realized we have a high probability of losing the house should we run the mortgage to maturity because the mortgage becomes a cash flow problem in 5 years.

I've seen talk of the mortgage being a great hedge against inflation, but there's no hedge against having the note called by the bank and I KNOW people who've had that experience. (granted, they were consuma suckkas) So a paid-off home is an even more effective hedge against inflation and job loss. While a low interest rate might seem like some kind of wonderful, magic money (and I am getting the lowest I possibly can),  if you lose your job or get sick and can't make the payments, the lowest interest rates in the world aren't gonna help you then.
Title: Re: Mortgage Payoff Club!!
Post by: cheddarpie on September 30, 2015, 03:11:00 PM
I put the stash first and mortgage second, but that's only because I pay the mortgage with post-tax money and stash using the pre-tax sheltering that the 401k's provide. (I have a Roth IRA but the yearly limits on that keep it a distant third.) Like you, I can't wait to get to only utilities and taxes as ongoing financial obligations. If I'm still working, I'll be ramming cash in the stash with prejudice.


Mefla, that's great! I think we're doing the same thing, I just didn't explain it as well ... I also max out my 401k and Roth every year, then focus on mortgage after that. What I call my "stash" is the money to cover the ~30 years between now and when I intend to start drawing on the retirement accounts. There's not much in it yet. :)
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on September 30, 2015, 05:22:42 PM
Mefla, that's great! I think we're doing the same thing, I just didn't explain it as well ... I also max out my 401k and Roth every year, then focus on mortgage after that. What I call my "stash" is the money to cover the ~30 years between now and when I intend to start drawing on the retirement accounts. There's not much in it yet. :)

That's OK if there's not much in the post-tax stash: you're still in your 30's and have plenty of time for it to grow. DW and I are in our 50's so it won't be very long before we can get the 401k money and I expect we aren't going to see any appreciable market-based growth. So Roth is the only post-tax stash I have. 

BTW: that's probably the most crucial fact about why I'm prepaying the mortgage: all the arguments against presuppose floating your money in the stock market for 30 years. We have nowhere near that - I'm just desperately trying to make things happen before our 60's. I believe I have about 5 more "good years" to stash money, so I'm maxing pre-tax and paying the rest against the house.

BTW: I'm eagerly making my 401k contributions in this down market we're having, but the contributions to my "Home Mortgage Bond" give me yields that beat the market. Although my 401k is all S&P 500 Index, my rate of return is about 2% higher due to the positive effect of paying the mortgage.  House is maintaining value, so I'm not losing anything there either.

I'm hoping for very low interest rates in January (they traditionally are very low then) and I'll refi into a 10 year (at least).
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on September 30, 2015, 05:32:20 PM
"Letting it Ride", A Cautionary Tale

I don't know if anyone here is old enough to remember higher mortgage interest rates, but my last home carried a 30 year mortgage at 5.25% and on the financial advice I had been given at the time, I "let it ride" because it was "good debt". (There was a home equity loan in there too, but that's a story for another day...). We didn't expect to carry the loan to term as we thought we would "upgrade" within five years.

The five year upgrade didn't happen and we were in the house 18 years into a 30 year loan. We got a little appreciation, but I was shocked at how small of a dent we made in the principal: even though the house appreciated, we walked away with only a net profit on the sale of $10k after paying realtor, legal fees and various costs the seller pays. That was a really, really hard lesson to learn and it seemed to make perfect sense until we sold, when we then saw the insanity of it.

I did refinance at one point. (That's how we got to 5.25% - the original loan was higher) In fact, the credit union was glad to "help me save some money" and push the interest rate down a point. Problem is, I didn't shop around - other people were getting better rates and I didn't know you could do such a thing as shop the mortgage. Plus, I got no breaks on the refi and paid the full suite of fees just to do so.

Now, to my credit, I did ask about and check into a 15 year loan. But I followed the advice that I could "turn a 30 into a 15 by paying ahead, and if you needed the cash, you could just stop the double payments".

See the evil here? Prepayments pay both principal and interest, when you should only be paying against the principal. And there wasn't a soul in the world, and certainly not at the credit union, who was gonna tell me that little information gem!

That damned 30 year credit union loan is the biggest reason we got such a late start on our savings toward FI. It made me physically sick to look at the amortization tables when we were done. Of course, that's when I learned the importance of the amortization table in truly understanding a mortgage loan.

Now: You could argue that I shouldn't have bought the house at all and should have rented. Nice try, but wrong. We live in a moderate-to-high COL area and our payments on that house were less than a 3 bedroom apartment. In other words, yes, the loan was an inflation hedge and we DID get back some money after the sale of the house. But it still kept us "house poor" for no good reason other than to pay interest to the credit union.

Now, I don't mean to come across like a complainypants whineybaby. That house was the best we could afford in the best neighborhood we could afford. Our boys spent all their growing up years in a safe and positive and fun environment. We got tremendous benefit out of that house and it did a great job for the time we needed it.

But calling a mortgage "good debt" and saying you should let it go to term is, like most financial lies, mostly based in truth. But it gets down to what your personal situation and goals are, how old you are, and how much income you have and how stable that income is. True, there is a good argument for investing instead of paydown, but if you are in the house already and you don't have a 30 year time window to let your investments grow, then you're on the track of paying the banker his interest and there's no point in that.

If I Had A Do-Over: what would I do differently?

1)  I'd shop mortgages and after 5 years, refi into a 15 or 10 year mortgage.
2) Drive a far more fuel efficient vehicle.
3) Cut costs of things like television, cellphone and utilities.
4) Pump everything I've got into 401k to cut tax burden.
5) Pump all the rest into the mortgage as hard as I could go until payoff.

That's exactly what I'm doing today with the second home.
Title: Re: Mortgage Payoff Club!!
Post by: ozbeach on October 01, 2015, 12:02:36 AM
It was painful to wait until 9am to see the numbers flip over this morning, but we're officially below $20k.

On my last payment, I was still a few hundred dollars short. I literally raided the piggy bank and took a huge bag of coins to the bank just to get me over the line!
Title: Re: Mortgage Payoff Club!!
Post by: ozbeach on October 01, 2015, 12:06:32 AM
"Letting it Ride", A Cautionary Tale

I don't know if anyone here is old enough to remember higher mortgage interest rates, but my last home carried a 30 year mortgage at 5.25%

They got to 17% in Australia during the early 90s. Can you imagine the trouble people would be in if that happened today!
Title: Re: Mortgage Payoff Club!!
Post by: marty998 on October 01, 2015, 01:49:29 AM
Hmm.. I forgot to post here, but I suppose I joined the Paid Off Club on the 16th.

"Letting it Ride", A Cautionary Tale

I don't know if anyone here is old enough to remember higher mortgage interest rates, but my last home carried a 30 year mortgage at 5.25%

They got to 17% in Australia during the early 90s. Can you imagine the trouble people would be in if that happened today!

It won't happen (anytime soon). The economy would burn long before that happened, negating the need for rates to go that far.

The level of indebtedness is so high that minor movements in rates upwards will have a dramatically higher impact on households than historically.

I'm of the view that the Great Deleveraging* has to happen eventually. Whether it will be quick and painful or long drawn out and painful remains to be seen.

* My phrase, it's not a recognised economic term...yet :)
Title: Re: Mortgage Payoff Club!!
Post by: Comar on October 01, 2015, 03:17:08 AM
I'm joining in.

I have a house in Iceland. Bought it for 123k dollars (16.5 million icelandic crowns) in 2012. Started making extra payments early last year and am now down to 88.4k dollars. Currently I throw about 560 dollars at it each month. I have also thrown some extra cash at the mortage, such as tax repayments and such.

From the start I have used the strategy of adding to the payments each month. Each downpayment reduces the monthly mortage payment so for the next downpayment I have added the extra dollars the mortage payment has been reduced. Call it a snowball strategy?

My goal is to KO the mortage in 5 years. I'm turning 30 this month and want it finished before I turn 35.
87.5 k left. Paid 562 extra this month.
Payed 1500$ this month which is larger than my average amount. Felt good. The 1st of each month is probably my favorite time of the month.
Title: Re: Mortgage Payoff Club!!
Post by: mom22boys on October 01, 2015, 10:56:21 AM
Ok, I think I'm going to make the leap and join in the club.  I originally was convinced with the 'invest it' and make more to pay off the mortgage later, but I just hate having this debt. I'm still going to take a hybrid approach though, similar to mefla and cheddarpie. I'm maxing out my 401k, HSA, rIRA (too high income for tIRA deduction benefit, so I do a tIRA and role over into a rIRA). Plus, so far this year I've even done 14k into my Mega backdoor 401K, which I'll roll over soon into a Roth.  I could do another 6K on the Mega backdoor, but I decided to switch gears and put that toward the house instead.

Mortgage info:
Oct 2105      156k

Goal:
Paid off in 5 years
Title: Re: Mortgage Payoff Club!!
Post by: NoraLenderbee on October 01, 2015, 11:39:00 AM
I'm interested in hearing everyone's stories. I understand the "invest it" argument, but if we paid off the mortgage, that would lower my living expenses by $900 per month. We're in our 50s and, like mefla, don't have a lot of time.
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on October 01, 2015, 11:40:34 AM
Ok, I think I'm going to make the leap and join in the club.  I originally was convinced with the 'invest it' and make more to pay off the mortgage later, but I just hate having this debt. I'm still going to take a hybrid approach though, similar to mefla and cheddarpie. I'm maxing out my 401k, HSA, rIRA (too high income for tIRA deduction benefit, so I do a tIRA and role over into a rIRA). Plus, so far this year I've even done 14k into my Mega backdoor 401K, which I'll roll over soon into a Roth.  I could do another 6K on the Mega backdoor, but I decided to switch gears and put that toward the house instead.

Mortgage info:
Oct 2105      156k

Goal:
Paid off in 5 years

mom22 and nora, keep in mind, I get zero benefit from "selling" this idea to anyone. If it works for you, I'm thrilled. If it doesn't, well, plenty of people here have already called me stupid and that's A-OK by me.

In case this applies any to you, I can summarize my situation this way:

I'm 53 and my stash is about $200k, remaining mortgage principal is $100k.

With mortgage, I would need $1M stash to FIRE and make the mortgage payment at 4% SWR.
(That means I or the market would have to generate $800k.)

With no mortgage, I can FIRE whenever I reach $480k at 4% SWR.
(That means I would have to generate $100k, THEN I and the market would generate $280k, total of $380k to FIRE.

So you see where this goes? Maybe the market returns will produce more money than mortgage prepayment over 30 years, but I don't have that kind of time. If I don't prepay the mortgage, then I'm COMMITTED to the idea that my job plus the market will get me $800k in about however many years it takes. The other way, I reach FIRE poorer, but in a shorter time. I'll be able to FIRE with another $380k in about 5 years.
Title: Re: Mortgage Payoff Club!!
Post by: mom22boys on October 01, 2015, 12:11:53 PM
Thanks mefla.  I've read many threads on this topic, and I see benefit in BOTH approaches.  I just came to a point where I needed to draw a line in the sand, and decide on an approach. As we all know, we are all doing way better than most non-MMMers so I look at it as a win/win.


Title: Re: Mortgage Payoff Club!!
Post by: plainjane on October 01, 2015, 12:27:35 PM
Hmm.. I forgot to post here, but I suppose I joined the Paid Off Club on the 16th.

Congratulations!
Title: Re: Mortgage Payoff Club!!
Post by: Neustache on October 01, 2015, 12:33:20 PM
mefla - I'm of the pay it down variety, myself, but you are over saving if you are trying to saving your annual mortgage payments times 25.   But I'm with you, I'm paying off the mortgage before FIRE and I have a lower rate than you (4.25).  I could spend some money and refi to a lower rate, but my husband doesn't want to, he just wants it paid off.  I for one will relish in the warm-fuzzy secure feelings I get when we own our home outright, even if we miss some returns.
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on October 01, 2015, 02:13:19 PM
mefla - I'm of the pay it down variety, myself, but you are over saving if you are trying to saving your annual mortgage payments times 25.   But I'm with you, I'm paying off the mortgage before FIRE and I have a lower rate than you (4.25).  I could spend some money and refi to a lower rate, but my husband doesn't want to, he just wants it paid off.  I for one will relish in the warm-fuzzy secure feelings I get when we own our home outright, even if we miss some returns.

Neustache, you are right...if I had 30 years to save. There's another thread where boarder42 is trying to beat me up for the same reason (and he's not being as nice as you about it....). I don't have the cash flow it would take to "oversave", although it's a really nice thought. Before I found MMM, I was already hacking on the mortgage for the historical reasons I mention above in this thread, when I got my ass handed to me by my sweet little local credit union.

I'm on a 5 year plan to FIRE and taking a "blended" approach, because I can kill a $100k-remaining mortgage faster than I can save the extra cash I need to stash in order to generate a monthly mortgage payment of $1700.

What all the "don't pay down your mortgage, stupid!" people mean is that it makes sense over a 30 year window. But I'm hot on fire to FIRE because I'm already in my 50's. So I'm looking for the fastest possible route to FIRE.

What none of those folks can tell you is, how soon you'll be able to overtake the mortgage with payments from your stash. Some believe it's 14-16 years into a 30 year mortgage, but most don't know. cFIREsim doesn't predict that.

And all I have is 5 years. so I take the approach I take.
Title: Re: Mortgage Payoff Club!!
Post by: YoungGranny on October 02, 2015, 10:42:34 AM
Been lurking here for a while but figured I'd finally make an account! I also am trying to pay off my mortgage (before I'm 30 ideally)... I bought my house 1.5 years ago with a PMI on it (dumb yes - but i believed it was a good time to buy). Finally paid my balance to 79.8% and they said the PMI won't drop off without an appraisal until it is originally scheduled to reach 78% (ie 7 more years!). Long story short I figured if I was going to pay for an appraisal I might as well re-finance to go from a 4.75% rate to 3.25%. That should be done next month and I just got the appraisal back and my home has gained $20k!! Excited now that it seems like my re-finance will happen with no issues and I'll have that nasty $80 PMI GONE! Sharing here since none of my real-life friends would think it's terribly exciting :)
Title: Re: Mortgage Payoff Club!!
Post by: cheddarpie on October 02, 2015, 10:58:18 AM
YoungGranny, congrats!! It's SO AWESOME that you are thinking about all of these things and doing all of these things and educating yourself about all of these things when you are still in your 20s. I'm sure I am not alone in saying I wish I had been as on top of it as you are! :D
Title: Re: Mortgage Payoff Club!!
Post by: NoraLenderbee on October 02, 2015, 11:51:44 AM


mom22 and nora, keep in mind, I get zero benefit from "selling" this idea to anyone. If it works for you, I'm thrilled. If it doesn't, well, plenty of people here have already called me stupid and that's A-OK by me.



Mefla, I now you're not selling anything and I certainly am not calling you stupid. I violently agree with you, actually. I'm 52 and we refinanced a few years ago. I definitely don't want to be paying a mortgage for the next 25 years.

It's likely that I will get an inheritance in the next year or two that will be more than enough to pay it off, and I plan to do it despite the investing-vs-debt argument. (Thank you Mom and Dad for being good with money.)
Title: Re: Mortgage Payoff Club!!
Post by: YoungGranny on October 02, 2015, 12:19:54 PM
Thank you cheddarpie! It can be discouraging to see everyone on here leaps and bounds ahead of me but I try to use it as motivation to get my butt in gear!
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on October 02, 2015, 03:43:18 PM
mom22 and nora, keep in mind, I get zero benefit from "selling" this idea to anyone. If it works for you, I'm thrilled. If it doesn't, well, plenty of people here have already called me stupid and that's A-OK by me.

Mefla, I now you're not selling anything and I certainly am not calling you stupid. I violently agree with you, actually. I'm 52 and we refinanced a few years ago. I definitely don't want to be paying a mortgage for the next 25 years.

It's likely that I will get an inheritance in the next year or two that will be more than enough to pay it off, and I plan to do it despite the investing-vs-debt argument. (Thank you Mom and Dad for being good with money.)

I just wanted to make sure you know "I come in peace". :-) There be an awful lot o' hot air on this subject in these here parts. I'm a pre-payer but I maximize pre-tax stashing. My post-tax money goes into my "real estate bond". :-)

And please, by all means, violently agree with me anytime. :-) :-) :-)
Title: Re: Mortgage Payoff Club!!
Post by: dabears847 on October 05, 2015, 07:32:23 PM
"Letting it Ride", A Cautionary Tale

I don't know if anyone here is old enough to remember higher mortgage interest rates, but my last home carried a 30 year mortgage at 5.25% and on the financial advice I had been given at the time, I "let it ride" because it was "good debt". (There was a home equity loan in there too, but that's a story for another day...). We didn't expect to carry the loan to term as we thought we would "upgrade" within five years.

The five year upgrade didn't happen and we were in the house 18 years into a 30 year loan. We got a little appreciation, but I was shocked at how small of a dent we made in the principal: even though the house appreciated, we walked away with only a net profit on the sale of $10k after paying realtor, legal fees and various costs the seller pays. That was a really, really hard lesson to learn and it seemed to make perfect sense until we sold, when we then saw the insanity of it.

I did refinance at one point. (That's how we got to 5.25% - the original loan was higher) In fact, the credit union was glad to "help me save some money" and push the interest rate down a point. Problem is, I didn't shop around - other people were getting better rates and I didn't know you could do such a thing as shop the mortgage. Plus, I got no breaks on the refi and paid the full suite of fees just to do so.

Now, to my credit, I did ask about and check into a 15 year loan. But I followed the advice that I could "turn a 30 into a 15 by paying ahead, and if you needed the cash, you could just stop the double payments".

See the evil here? Prepayments pay both principal and interest, when you should only be paying against the principal. And there wasn't a soul in the world, and certainly not at the credit union, who was gonna tell me that little information gem!

That damned 30 year credit union loan is the biggest reason we got such a late start on our savings toward FI. It made me physically sick to look at the amortization tables when we were done. Of course, that's when I learned the importance of the amortization table in truly understanding a mortgage loan.

Now: You could argue that I shouldn't have bought the house at all and should have rented. Nice try, but wrong. We live in a moderate-to-high COL area and our payments on that house were less than a 3 bedroom apartment. In other words, yes, the loan was an inflation hedge and we DID get back some money after the sale of the house. But it still kept us "house poor" for no good reason other than to pay interest to the credit union.

Now, I don't mean to come across like a complainypants whineybaby. That house was the best we could afford in the best neighborhood we could afford. Our boys spent all their growing up years in a safe and positive and fun environment. We got tremendous benefit out of that house and it did a great job for the time we needed it.

But calling a mortgage "good debt" and saying you should let it go to term is, like most financial lies, mostly based in truth. But it gets down to what your personal situation and goals are, how old you are, and how much income you have and how stable that income is. True, there is a good argument for investing instead of paydown, but if you are in the house already and you don't have a 30 year time window to let your investments grow, then you're on the track of paying the banker his interest and there's no point in that.

If I Had A Do-Over: what would I do differently?

1)  I'd shop mortgages and after 5 years, refi into a 15 or 10 year mortgage.
2) Drive a far more fuel efficient vehicle.
3) Cut costs of things like television, cellphone and utilities.
4) Pump everything I've got into 401k to cut tax burden.
5) Pump all the rest into the mortgage as hard as I could go until payoff.

That's exactly what I'm doing today with the second home.

[I don't think you paid the full interest amount on principle payments. The interest plan should adjust after each payment or each extra principal payment. If you did a 30 year and then refinanced to another 30 year then yes, but each extra payment would reset the amortization schedule.]
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on October 05, 2015, 11:34:22 PM
....stuff was here...
[I don't think you paid the full interest amount on principle payments. The interest plan should adjust after each payment or each extra principal payment. If you did a 30 year and then refinanced to another 30 year then yes, but each extra payment would reset the amortization schedule.]

Principal. And yes, you are correct, the loan re-amortizes with principal abatement. I take advantage of that principle regularly on the current 15 year mortgage. The next one will be 10 years.

I've avoided paying well over $100,000 in interest as-compared to the initial 30 year loan. I'm too lazy to look up the exact number right now but I think from my original documents it was somewhere around $163,000 if I had never refinanced nor prepaid.  I paid fees to refinance the first time, but I've gotten paid ever since.
Title: Re: Mortgage Payoff Club!!
Post by: Debts_of_Despair on October 07, 2015, 09:04:51 AM
38.2k.

Burgeoning school tax bill due this month.  Went up 6% from last year.  WTF?! This should be my last major expense that gets in my way of payoff.  Also, I just finished paying into my employer's pension plan so that effectively is a 3% raise.  I don't need to tell you guys where that money is now going...
Title: Re: Mortgage Payoff Club!!
Post by: rjbf65 on October 07, 2015, 11:21:55 AM
I'll join.

Started June 2014 at 71k.

It's currently $55k.  Goal is to finish it off by next June.   Have 20k in cash that would finish it off by then.  We are currently investing 15% as well.   Basically doing the Dave Ramsey plan.

Currently down to $51,500.  Hoping to get under $50K a month from today.

Down to $49660.  Was able to throw an extra $1555 at it this time.  Budgeting to be able to throw an extra $2500 next month.

$46,950 -- a $2,710 reduction this month.  October should be a little better with the magic of the 3 paychecks for me this month.  Should be under $40K by end of the year.
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on October 07, 2015, 01:45:24 PM
I never thought I'd be saying this... but...please don't beat me up too badly:

I'm vectoring a little bit of money toward the market that I would otherwise have put toward the mortgage. I've not maxed my Roth IRA and this seems to be the right time to do that. So I'm pulling money originally earmarked for principal abatement and pushing it toward the market. About $1k, this week.

As has been mentioned, we've got three paydays this month and my mortgage payment already drafted, so I'll have money later to continue with mortgage abatement. I just hope the market doesn't turn into an even better bargain then.....
Title: Re: Mortgage Payoff Club!!
Post by: Threshkin on October 07, 2015, 02:05:10 PM
No beating from me!

My sequence of priority for money is:

This presupposes you have a fully funded emergency fund.  Otherwise it is #2.

I never thought I'd be saying this... but...please don't beat me up too badly:

I'm vectoring a little bit of money toward the market that I would otherwise have put toward the mortgage. I've not maxed my Roth IRA and this seems to be the right time to do that. So I'm pulling money originally earmarked for principal abatement and pushing it toward the market. About $1k, this week.

As has been mentioned, we've got three paydays this month and my mortgage payment already drafted, so I'll have money later to continue with mortgage abatement. I just hope the market doesn't turn into an even better bargain then.....
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on October 07, 2015, 02:57:11 PM
(I'll top-comment since Threshkin did...)
I like your sequence, Threshkin. That's close to what I do, but where you have "Ordinary Savings", I have "Vanguard Roth IRA". Normally, any extra dough goes to the house but I also make sure I max out the Roth IRA to the yearly allowed maximum. I'm still under that, so I need to do something about that, and now's a great time. I was going to wait for December profit-taking, but I think now's not a bad time to kick some $$ that way.

And BTW: while I'm confessing, I DO have a "January Objective" I have to make - I need to get my principal to 50% of original in January so I can refi to a number I want. So while I'm pushing $1k toward the market right now, that doesn't change my January Objective - I still have to make that because I still believe interest rates will be AWESOME in January. And if interest rates AREN'T awesome in January, I'll just keep prepaying the current mortgage as-is until I reach a point where it makes sense to do something.

I always come down on the side of the mortgage prepayers in these discussions, in general.  Not because I'm a believer in vectoring after-tax cash toward the mortgage, but because I disbelieve it's an either-or proposition.  There's no law saying we can't take advantage of a market downturn to get a little more investment lovin'.

No beating from me!

My sequence of priority for money is:
  • Current expenses (utilities, food, gas, regular mortgage payment, etc.)
  • Tax advantaged retirement accounts (401k, IRA, or equivalent - until maxed out!)
  • Additional mortgage payment
  • Ordinary savings

This presupposes you have a fully funded emergency fund.  Otherwise it is #2.

I never thought I'd be saying this... but...please don't beat me up too badly:

I'm vectoring a little bit of money toward the market that I would otherwise have put toward the mortgage. I've not maxed my Roth IRA and this seems to be the right time to do that. So I'm pulling money originally earmarked for principal abatement and pushing it toward the market. About $1k, this week.

As has been mentioned, we've got three paydays this month and my mortgage payment already drafted, so I'll have money later to continue with mortgage abatement. I just hope the market doesn't turn into an even better bargain then.....
Title: Re: Mortgage Payoff Club!!
Post by: Threshkin on October 07, 2015, 03:22:49 PM
I consider Roth IRAs to be tax advantaged savings. and put them in #2. 

Full disclaimers 1) I joined the Mortgage Payoff club two years ago.  2) I have always maxed my 401k accounts since they were first available to me.  3) I did not always prioritize additional mortgage payments over ordinary savings on a monthly basis but instead would put some in each of the two.  Then, as the ordinary savings grew I would intermittently make a 5 figure payment on the mortgage from savings.

(I'll top-comment since Threshkin did...)
I like your sequence, Threshkin. That's close to what I do, but where you have "Ordinary Savings", I have "Vanguard Roth IRA". Normally, any extra dough goes to the house but I also make sure I max out the Roth IRA to the yearly allowed maximum. I'm still under that, so I need to do something about that, and now's a great time. I was going to wait for December profit-taking, but I think now's not a bad time to kick some $$ that way.

And BTW: while I'm confessing, I DO have a "January Objective" I have to make - I need to get my principal to 50% of original in January so I can refi to a number I want. So while I'm pushing $1k toward the market right now, that doesn't change my January Objective - I still have to make that because I still believe interest rates will be AWESOME in January. And if interest rates AREN'T awesome in January, I'll just keep prepaying the current mortgage as-is until I reach a point where it makes sense to do something.

I always come down on the side of the mortgage prepayers in these discussions, in general.  Not because I'm a believer in vectoring after-tax cash toward the mortgage, but because I disbelieve it's an either-or proposition.  There's no law saying we can't take advantage of a market downturn to get a little more investment lovin'.

No beating from me!

My sequence of priority for money is:
  • Current expenses (utilities, food, gas, regular mortgage payment, etc.)
  • Tax advantaged retirement accounts (401k, IRA, or equivalent - until maxed out!)
  • Additional mortgage payment
  • Ordinary savings

This presupposes you have a fully funded emergency fund.  Otherwise it is #2.

I never thought I'd be saying this... but...please don't beat me up too badly:

I'm vectoring a little bit of money toward the market that I would otherwise have put toward the mortgage. I've not maxed my Roth IRA and this seems to be the right time to do that. So I'm pulling money originally earmarked for principal abatement and pushing it toward the market. About $1k, this week.

As has been mentioned, we've got three paydays this month and my mortgage payment already drafted, so I'll have money later to continue with mortgage abatement. I just hope the market doesn't turn into an even better bargain then.....
Title: Re: Mortgage Payoff Club!!
Post by: mies on October 07, 2015, 04:12:05 PM
I'm joining too. My goal is to have it paid off by June of 2018

We just refinanced over the summer from a 30 year 6.24% loan to a 10 year 3.39% mortgage. We paid off enough on the old loan to make the monthly payment about the same on the new loan (Old loan: $821/month New loan: $816/month). We'll now be paying substantially more in principal than interest every month. The last old mortgage payment we paid $453 in interest. The first payment on the new loan we only paid $234.

We also just threw an extra $3500 at the principal on the new loan after making the first payment (The bank wouldn't let us make a principal payment before the first regular payment was due). I'm hoping to throw an extra $1000 a month at the principal for the next few years. About 6 months before I want the mortgage to be over, I will dip into my savings and make a large payment. I will stop making extra payments at that point and just make the regular payment. We'll barely be paying any interest at that point anyway. I will use that time to start replenishing my savings and prepare for any taxes we might owe.

I would like to throw a larger sum at the mortgage now, but I don't feel comfortable dipping too deeply in to my emergency funds. My wife and I have pretty stable jobs, but I don't take anything for granted. At least with our new loan, we will be making a nice dent in the principal each month even without an additional principal payment :)
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on October 07, 2015, 04:32:48 PM
I'm joining too. My goal is to have it paid off by June of 2018

We just refinanced over the summer from a 30 year 6.24% loan to a 10 year 3.39% mortgage. We paid off enough on the old loan to make the monthly payment about the same on the new loan (Old loan: $821/month New loan: $816/month). We'll now be paying substantially more in principal than interest every month. The last old mortgage payment we paid $453 in interest. The first payment on the new loan we only paid $234.

mies: congrats on your refinance and your mortgage progress! You are designating your payments for mortgage abatement only, right?

Quote
I will stop making extra payments at that point and just make the regular payment. We'll barely be paying any interest at that point anyway. I will use that time to start replenishing my savings and prepare for any taxes we might owe.

I would like to throw a larger sum at the mortgage now, but I don't feel comfortable dipping too deeply in to my emergency funds. My wife and I have pretty stable jobs, but I don't take anything for granted. At least with our new loan, we will be making a nice dent in the principal each month even without an additional principal payment :)

Good ideas, what you are talking about. I have sacrificed some from the emergency fund to make an early mortgage abatement payment, but only when I know I can replenish it within a month or so.

You talk about stopping making extra payments whenever you are barely paying any interest. Do you have any feel for what percentages you are looking for? I was thinking of doing that about the time I started paying 95% principal and 5% interest.

What say ye? Are there any others in this thread who have reached that far end of the compound interest curve and have STOPPED prepaying for that reason?

And: does anyone think I am asking the wrong question above? I've seen people get to a point where they pay it off in a lump sum just to close the books on it as quickly as possible. So asking "do you let it ride at any point" would be counter to that.
Title: Re: Mortgage Payoff Club!!
Post by: mies on October 07, 2015, 04:56:46 PM
I'm joining too. My goal is to have it paid off by June of 2018

We just refinanced over the summer from a 30 year 6.24% loan to a 10 year 3.39% mortgage. We paid off enough on the old loan to make the monthly payment about the same on the new loan (Old loan: $821/month New loan: $816/month). We'll now be paying substantially more in principal than interest every month. The last old mortgage payment we paid $453 in interest. The first payment on the new loan we only paid $234.

mies: congrats on your refinance and your mortgage progress! You are designating your payments for mortgage abatement only, right?

Quote
I will stop making extra payments at that point and just make the regular payment. We'll barely be paying any interest at that point anyway. I will use that time to start replenishing my savings and prepare for any taxes we might owe.

I would like to throw a larger sum at the mortgage now, but I don't feel comfortable dipping too deeply in to my emergency funds. My wife and I have pretty stable jobs, but I don't take anything for granted. At least with our new loan, we will be making a nice dent in the principal each month even without an additional principal payment :)

Good ideas, what you are talking about. I have sacrificed some from the emergency fund to make an early mortgage abatement payment, but only when I know I can replenish it within a month or so.

You talk about stopping making extra payments whenever you are barely paying any interest. Do you have any feel for what percentages you are looking for? I was thinking of doing that about the time I started paying 95% capital and 5% interest.

What say ye? Are there any others in this thread who have reached that "far end of the compound interest curve" and have STOPPED prepaying for that reason?

Thanks mefla! Yes. The extra payments we make are principal only. I can do the payments online and click the checkbox for principal only which is nice. I don't have to be at the mercy of whoever processes a check noticing that it is meant to be principal only.

I haven't actually looked at any percentages. After examining my amortization schedule, paying the large sum 6-7 months before I wanted to end the mortgage seemed like the safest way to get the mortgage paid off quickly without compromising my emergency fund. I never had principal vs. interest percentage in mind.
Title: Re: Mortgage Payoff Club!!
Post by: Mrwannabemmm on October 07, 2015, 09:50:12 PM
Hi i am still on the fence , i am bit of conservative side ..actully a lot on conservative side always.I have 330 k in mortgage now ( paid off 160 k recently as lump sum off the original 490 ). I have 270 k in cash which i can either invest in real estate or pay off mortgage ...but that will delay my investing by 3 more years I think to collect down payment on house again . please advice...

mortgage 330 k
cash saving 270 k
401 k maxing out
no other debt
Title: Re: Mortgage Payoff Club!!
Post by: ahoy on October 08, 2015, 02:36:35 AM
So glad my DH and I got rid of our mortgage, we only had one for about 3 years.  We had a huge deposit, small mortgage.  It was a fantastic 4 bed house.  Sold it during the peak (2006) moved countries and downsized.   I hated our current house for about 5 years and about 2 yrs ago realized it was the best thing.  We would never go back to paying a mortgage every month on our principle residence. 

 
Title: Re: Mortgage Payoff Club!!
Post by: nora on October 08, 2015, 05:21:16 AM
Ours just dropped below 100000. Fantastic. I paid a bit extra to get it to 99997 or some such. Of course then the exchange rate changed (house is in NZ and we are in Oz)  and when I came to show the accounts to DH it was back over 100000! But I think we are on the home straight now, no pun intended.
Title: Re: Mortgage Payoff Club!!
Post by: K-ice on October 08, 2015, 10:08:16 AM
Hi i am still on the fence , i am bit of conservative side ..actully a lot on conservative side always.I have 330 k in mortgage now ( paid off 160 k recently as lump sum off the original 490 ). I have 270 k in cash which i can either invest in real estate or pay off mortgage ...but that will delay my investing by 3 more years I think to collect down payment on house again . please advice...

mortgage 330 k
cash saving 270 k
401 k maxing out
no other debt

What are your interest rates on the mortgage vs savings?

Congrats on the large chunk of cash!

You can find many debates on the pay mtg vs invest.
Obviously on this thread, most are focusing on mortgage payoff.
Mathamatically investing in balanced ETFs should pay off better in the long run than rushing to pay your mortgage.

But saving does not equal investing. It appears that you are saving not investing.

If you are too conservative to invest I would pay off the mortgage first.
For the ultra conservative investor that is what you should do.

That is what I did with my primary residence. Now I am starting to invest in Vanguard and plan to slowly pay the mtg on a rental property.

Since you have a large chunk of cash you may want to "invest" a bit.

1) keep a good emergency fund ~20K (3-6 months spending, this should be your only cash savings)
2) pay a large chunk of the mortgage ~150-240K (how much can you prepay without being hit with penalty fees?)
3) start investing with a comfortable amount, for you this may be 10-100K. Research your low fee options & Max out your tax advantaged accounts.

If you are not quite sure about how to split your money in 2 & 3 hang on to more cash and decide what to do with it in 3-6 months.

Don't listen to anyone who says invest it all today. That is mathamatically correct but you mentioned you are very conservative and probably need to learn a lot more before throwing all that cash into investments.


Title: Re: Mortgage Payoff Club!!
Post by: Faraday on October 08, 2015, 10:52:12 AM
+1 to what K-ice said. Good advice.
Title: Re: Mortgage Payoff Club!!
Post by: ozbeach on October 09, 2015, 01:19:00 PM
Ours just dropped below 100000. Fantastic. I paid a bit extra to get it to 99997 or some such. Of course then the exchange rate changed (house is in NZ and we are in Oz)  and when I came to show the accounts to DH it was back over 100000! But I think we are on the home straight now, no pun intended.

I've had two mortgages, and both times it was when they dropped below $100K that I really started to see the payments making a difference. Above that, and it seems that most of your payment is going on interest; below $100K every payment seems to attack principal and it just seems to melt away. Keep hitting it hard and it will be gone before you know it!
Title: Re: Mortgage Payoff Club!!
Post by: Bellatrix on October 09, 2015, 04:49:09 PM
I can't wait to pay off my mortgage. It feels like it will take forever though.   

Started with 400k at 3.25%.
Now at about 285k. 
Goal payoff date: Dec 2018.

I have an amortization schedule hanging on my fridge.  I look at it all the time and just need this mortgage to go away. 







Title: Re: Mortgage Payoff Club!!
Post by: mies on October 09, 2015, 05:51:53 PM
Nice work Bellatrix! I constantly check my amortization schedule too. I'm always calculating the numbers in my head :) If I can do a little extra principal this month, next month's regular payment will be that much more productive.
Title: Re: Mortgage Payoff Club!!
Post by: Bellatrix on October 09, 2015, 06:59:52 PM
Nice work Bellatrix! I constantly check my amortization schedule too. I'm always calculating the numbers in my head :) If I can do a little extra principal this month, next month's regular payment will be that much more productive.

Thanks!  I get so excited when my paycheck is higher than expected... it means I get to tackle more of my mortgage.  I get so mad when I see how much I am paying in interest every month (down to about $800 now). 

Looks like 2018 will be a good year for both of us. 
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on October 09, 2015, 07:38:42 PM
Nice work Bellatrix! I constantly check my amortization schedule too. I'm always calculating the numbers in my head :) If I can do a little extra principal this month, next month's regular payment will be that much more productive.

Thanks!  I get so excited when my paycheck is higher than expected... it means I get to tackle more of my mortgage.  I get so mad when I see how much I am paying in interest every month (down to about $800 now). 

Looks like 2018 will be a good year for both of us.

Dec. 2018 will be here before you know it, awesome that you have a goal date for payoff!
Title: Re: Mortgage Payoff Club!!
Post by: Mrwannabemmm on October 09, 2015, 11:56:46 PM
Thanks k ice . I resonate with your advice too. I am planning to pay off mortgage down too till I have 100 k left. Planning to keep  100 k for getting another mortgage on a rental income. Then work on paying rest of mortgage and then the rental mortgage .

This was I will pay of one mortgage and then have another one to motivate me even more since that will create passive cash flow .
Title: Re: Mortgage Payoff Club!!
Post by: Mrwannabemmm on October 10, 2015, 12:02:26 AM
My saving account almost pays nothing , mortgage is 3.87 percent .
Maxing out my 401k but do not have any 529 for kids yet .


Title: Re: Mortgage Payoff Club!!
Post by: manonfire1007 on October 10, 2015, 08:26:11 PM
I bought mine last year for 271k at 5% fixed with no points (long story). Have it on a 15 year. Should have it done in 58 months as I have a similar amount in student loans to kill first.
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on October 11, 2015, 11:36:37 AM
I bought mine last year for 271k at 5% fixed with no points (long story). Have it on a 15 year. Should have it done in 58 months as I have a similar amount in student loans to kill first.

ON FIRE is right! Excellent, excellent, excellent.
Title: Re: Mortgage Payoff Club!!
Post by: manonfire1007 on October 11, 2015, 07:05:10 PM
If I could burn it down faster, I would. That said, I would then have to add alimony to the expenses. Probably an unwise choice.
Title: Re: Mortgage Payoff Club!!
Post by: RNwastash on October 15, 2015, 08:27:29 PM
Made a small $500 extra payment.  Down to $123,536.82!!
Title: Re: Mortgage Payoff Club!!
Post by: cdub on October 16, 2015, 12:55:56 AM
I moved the Mortage Payoff Club blog from WordPress (which I hated) to a XenForo community which I know and love.

I also got it a much better domain.

Here it is:

http://mortgagepayoff.club/

I hope you like it.

Congrats to everyone on their progress!

Title: Re: Mortgage Payoff Club!!
Post by: mom22boys on October 16, 2015, 09:49:04 AM
My mortgage is still sitting around 156k, but I did sign on my refinance this morning, which was a good feeling.  Of course I'm not planning to pay off over 15 years but more like 5-7 years. :-) 

One victory is that last week I put an additional 10K against the special assessments on my house.  I didn't include that in my original post.  After that pay off, I'll be down to around 20K for the specials.  About half of that is at a pretty low interest rate (similar to mortgage) so I won't pay that off early.  I'm even thinking about just letting the full 20K ride, and instead move over to paying down the mortgage instead.  While I plan to be in this house for at least 10 years, I don't really see me recouping the specials when I sell. Plus, the new lucky owner would assume what's remaining of that debt.  What do others here do with specials?  Do you treat specials just like other debt and pay it off based on the interest rates?
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on October 16, 2015, 11:05:15 AM
My mortgage is still sitting around 156k, but I did sign on my refinance this morning, which was a good feeling.  Of course I'm not planning to pay off over 15 years but more like 5-7 years. :-) 
...

hey mom22 - anything particular you can share about your refi? What interest rate, points, closing costs? Did you do anything like get quotes through lendingtree.com? Thanks for any info you can share!
Title: Re: Mortgage Payoff Club!!
Post by: mom22boys on October 16, 2015, 11:19:07 AM
mefla - No prob on the info.  I moved to a 15 year at 3.375.  No points, and $245 closing costs, most of which was the daily interest until the end of the month.  I could have gotten a lower interest rate, but didn't want to pay for points or high closing costs. The refi was through AimLoan.com.  Originally I went through LendingTree and I wish I hadn't.  Phone calls and email NON-STOP.  It was super annoying.  I had posted some questions on another thread and someone recommended AimLoan. They were really good to work with and came in at the lower rates/closing costs. The refi was completely done in less than 3 weeks.
Title: Re: Mortgage Payoff Club!!
Post by: Uncle Scrooge on October 16, 2015, 01:08:03 PM
Can confirm. Lending Tree was awful. Non stop calls for the first week or two.....and some are super aggressive salesmen.

I also looked into AIM Loans about a week to 10 days ago. We just had the appraiser at our house yesterday and I'm well on my way to refinancing. So far so good...
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on October 16, 2015, 01:13:57 PM
re: AimLoans - INTERESTING! THANK YOU for the info, I'll check 'em out!
Title: Re: Mortgage Payoff Club!!
Post by: peoria on October 16, 2015, 01:59:40 PM
Refi in march of 2015 with first payment due on May 1, 2015.
$317,000 at 3.125%

We arw maxing out our Simple Iras and Roth Iras, then throwing everything extra at the mortgage.

We are down to $271,250 as of now.  We are trying to pay off another $15k by year end ( Christmas bonuses). Goal by 12/31 is 256,250.

Title: Re: Mortgage Payoff Club!!
Post by: birdman2003 on October 16, 2015, 03:10:57 PM
My original mortgage was for $70k in 2012 (15 years @ fixed 3%) and now I think the principal balance is somewhere around $65k.  Obviously I have never made extra payments.  I think I will do that next year as I have extra monies not spoken for!

Thanks for the jumpstart to do this!

Still haven't made additional payments, but I do have a 15 year mortgage so it's like fixed double payments on a 30 year mortgage.  Remaining balance is now at $58k
Title: Re: Mortgage Payoff Club!!
Post by: PFHC on October 16, 2015, 05:30:51 PM
Initial mortgage was for $150k, 30 years at 3.5%.
Currently at $134k.
Just ran the numbers and shooting for an end date of Sep, 2018. Here we go!
Title: Re: Mortgage Payoff Club!!
Post by: cdub on October 17, 2015, 12:17:17 AM
Can confirm. Lending Tree was awful. Non stop calls for the first week or two.....and some are super aggressive salesmen.

I also looked into AIM Loans about a week to 10 days ago. We just had the appraiser at our house yesterday and I'm well on my way to refinancing. So far so good...

I had a good experience with Quicken Loans. I refinance with them 2 years ago.

(be sure to check out my site that is perfect for people on this thread http://mortgagepayoff.club/ (http://mortgagepayoff.club/))

I'm working on around $260k 30 year fixed at 3.99 right now.
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on October 17, 2015, 07:14:19 PM
Initial mortgage was for $150k, 30 years at 3.5%.
Currently at $134k.
Just ran the numbers and shooting for an end date of Sep, 2018. Here we go!

Hey PFHC: I am aiming to have mine done in that timeframe. Maybe we set a Dec. 2018 Goal Date and move it around if needed?
Title: Re: Mortgage Payoff Club!!
Post by: cdub on October 18, 2015, 11:25:34 PM
Initial mortgage was for $150k, 30 years at 3.5%.
Currently at $134k.
Just ran the numbers and shooting for an end date of Sep, 2018. Here we go!

Hey PFHC: I am aiming to have mine done in that timeframe. Maybe we set a Dec. 2018 Goal Date and move it around if needed?

Wow that's pretty good. How much extra per month are you throwing at it?
Title: Re: Mortgage Payoff Club!!
Post by: Money Badger on October 19, 2015, 06:47:48 AM
I'm going to put a chunk towards my mortgage beast and would appreciate some advice...   Anyone have experience with Third Federal for HELOC, fixed equity loan or a first mortgage?    If my current first mortgage holder won't allow a recast, I saw these guys on bankrate site and their rates are a full percent lower with fixed equity loan and shorter amortization.    What's the catch?   Their reviews on BBB and other sites are mixed...  If they stink, pls keep the cursing to less than 10 F-bombs a sentence please!  ;-)
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on October 19, 2015, 08:07:22 AM
Initial mortgage was for $150k, 30 years at 3.5%.
Currently at $134k.
Just ran the numbers and shooting for an end date of Sep, 2018. Here we go!

Hey PFHC: I am aiming to have mine done in that timeframe. Maybe we set a Dec. 2018 Goal Date and move it around if needed?
Wow that's pretty good. How much extra per month are you throwing at it?

Hey cdub: my income is "lumpy" so I don't do a set amount per month, but I'm reaching $30k in 2015. I'd like to go even more in 2016, but I'd have to cut into my Roth IRA, not sure I wanna do that. Both the wife and I are working right now and I've got our expenses trimmed out enough that we can throw a lot of our income at it.
Title: Re: Mortgage Payoff Club!!
Post by: K-ice on October 19, 2015, 11:27:30 AM
I'm going to put a chunk towards my mortgage beast and would appreciate some advice...   Anyone have experience with Third Federal for HELOC, fixed equity loan or a first mortgage?    If my current first mortgage holder won't allow a recast, I saw these guys on bankrate site and their rates are a full percent lower with fixed equity loan and shorter amortization.    What's the catch?   Their reviews on BBB and other sites are mixed...  If they stink, pls keep the cursing to less than 10 F-bombs a sentence please!  ;-)

I do not know about them in particular. But I had a mixed mortgage HELOC from my bank and it gave me the added confidence that I could throw big chunks at the mortgage but still have access to a squishy emergency fund. Luckily, I never needed the HELOC, but I would highly recommend it. 
Title: Re: Mortgage Payoff Club!!
Post by: mies on October 19, 2015, 04:34:56 PM
I'll be throwing another $2500 at my mortgage principal this week. That will get the principal portion of our regular monthly payment ($816) over $600.

The next short term goal on the mortgage is getting the monthly interest under $200. I want to get these monthly payments as productive as possible :)
Title: Re: Mortgage Payoff Club!!
Post by: Neustache on October 19, 2015, 06:16:50 PM
^nice, mies!  I will be happy when my principal payment is more than my interest payment, but you are doing great!
Title: Re: Mortgage Payoff Club!!
Post by: pdxmonkey on October 19, 2015, 07:32:00 PM
I've been working at my mortgage for a while now. I originally had a 30 yr $146000 loan. In 2012 I refinanced into a 15 yr @ 2.875%. As of today I have about $67,500 remaining.

I flip flop between investing more and paying off the mortgage. I have been maxing out my contributions to a Roth IRA since my mid 20's and last year I maxed out my 401k (Roth) for the first time and will be doing so again this year. I had always considered retiring early, but have only recently considered retiring extremely early and finally about 2 months ago opened up a taxable investment account in addition to my 401k and IRA accounts as I'll need money outside those accounts to live on. I've put some money into this and started paying the mortgage down less aggressively although still more than the minimum payment. I really want to get it paid off even though mathematically it is not necessarily the best idea. If P/E ratio goes lower on the market I will probably not pay any extra on the mortgage.
Title: Re: Mortgage Payoff Club!!
Post by: cdub on October 20, 2015, 10:39:07 PM
I'll be throwing another $2500 at my mortgage principal this week. That will get the principal portion of our regular monthly payment ($816) over $600.

The next short term goal on the mortgage is getting the monthly interest under $200. I want to get these monthly payments as productive as possible :)

That's awesome. I'm hoping to be able to start sending that much $$$ at my mortgage soon enough.
Title: Re: Mortgage Payoff Club!!
Post by: mies on October 21, 2015, 02:05:02 AM
Thanks cdub and neustache! October has been a fairly inexpensive month so far which has helped. I may or may not be able to do an extra a principal payment in November because of this one. I'm ok with that.
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on October 21, 2015, 01:11:22 PM
On track for a nice little principal abatement payment for that third paycheck in October. Been accumulating post-tax savings the entire month of STOCKTOBER. Looking forward to getting much closer to the Sacred Refinance Objective for January, 2016!

The plan is to refinance in January to a 10 or 8 year mortgage under 2.875%.  It's possible interest rates won't go down in January 2016. If not, then we don't refi, we just keep pushing hard as we can go.

Title: Re: Mortgage Payoff Club!!
Post by: Jon_Snow on October 21, 2015, 02:58:53 PM
Never looked at this thread before. Just want to say to everyone that you are kicking all sorts of mortgage-ass!

We killed our mortgage about 5 years before I FIRE'd...really, that was the point at which it was "all systems go" to FI...and beyond. This thread provides wonderful nostalgia and a nice reminder about the excitement created by watching a mortgage balance dwindle until it is GONE.
Title: Re: Mortgage Payoff Club!!
Post by: cdub on October 21, 2015, 11:05:44 PM
Never looked at this thread before. Just want to say to everyone that you are kicking all sorts of mortgage-ass!

We killed our mortgage about 5 years before I FIRE'd...really, that was the point at which it was "all systems go" to FI...and beyond. This thread provides wonderful nostalgia and a nice reminder about the excitement created by watching a mortgage balance dwindle until it is GONE.

Yes that's my goal too. I want to kick the mortgage payoff into high gear asap. I'm hoping to have that same joy and excitement too. :)
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on October 21, 2015, 11:43:13 PM
We killed our mortgage about 5 years before I FIRE'd...really, that was the point at which it was "all systems go" to FI...and beyond. This thread provides wonderful nostalgia and a nice reminder about the excitement created by watching a mortgage balance dwindle until it is GONE.

Jon - thanks for chiming in on this thread. It truly helps when someone who is already FIRE touches back base to let us know we are on the right track.
Title: Re: Mortgage Payoff Club!!
Post by: YoungGranny on October 23, 2015, 11:23:47 AM
Refinance is complete! Mortgage balance is $131,500. Decided my goal will be to get it under $100k in 1 year. Hopefully completely paid off in 5 years or less but I think I need a short-term goal to focus on for motivation.
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on October 23, 2015, 01:21:00 PM
Refinance is complete! Mortgage balance is $131,500. Decided my goal will be to get it under $100k in 1 year. Hopefully completely paid off in 5 years or less but I think I need a short-term goal to focus on for motivation.

ROCK ON YoungGranny! Same here, I've got the refi goal for January. You are right, you need an interim goal or a milestone to work to, so you can "feel the progress".
Title: Re: Mortgage Payoff Club!!
Post by: K-ice on October 23, 2015, 03:14:34 PM
We killed our mortgage about 5 years before I FIRE'd...

I would like to think I am on the same track. Mtg is gone as of last year and maybe 4-5 years until FI maybe RE.

I wonder if there is some math behind that?  If you can kill the mtg, then keep saving those payments in investments for 5 years after being mtg free. At that point it is probably a good time to retire. It would all depend on how big your mortgage payments were....
Title: Re: Mortgage Payoff Club!!
Post by: mies on October 23, 2015, 06:25:54 PM
Refinance is complete! Mortgage balance is $131,500. Decided my goal will be to get it under $100k in 1 year. Hopefully completely paid off in 5 years or less but I think I need a short-term goal to focus on for motivation.

Breaking it up in to smaller goals is a great idea YoungGranny. There are a lot of ways to do it. You can aim for a certain amount of principal to be gone by the end of the year. You can try to get the principal portion of your monthly payment up to a certain amount. You can try to get the interest portion of your monthly payment under a certain amount.
 
I've found using amortization calculators that are available online help me to set these types of goals. It helps make the money you are saving seem more real too since it's laid out in front of you in black and white.
Title: Re: Mortgage Payoff Club!!
Post by: Money Badger on October 23, 2015, 10:59:17 PM
The latest...   The option of cash in $135K and refi to a HELOC is boiling down to choosing either a 3% fixed equity loan or 4-ish% flexible HELOC line with options on fixed and flexible draws in the loan.    The following are rough numbers so don't pick...   A 15 year amortization on a fixed loan drops the monthly interest $300 a month and the total P+I monthly nut from $1100 to just under $600 after the cash in.   No risk on the $130k ever after and that frees up $500+ monthly cash flow and saves $250 in the remaining HELOC balance's interest amortization (despite higher % rate), and the ability to accelerate the $100k payoff to meet my "done in '21" FIRE goal.   I know investing could grow $130K faster but we save well already to catch back up and I sleep better.    Do it??
Title: Re: Mortgage Payoff Club!!
Post by: Imonaboat on October 26, 2015, 02:53:04 AM
Paid off our home last month ;)

We spent 2 years looking for the perfect house, saving tons of money while occasionally submitted very low ball offers on a house we liked. We finally found the perfect house and they accepted an offer of $200,000, down from the asking price of $235k. Since we had been saving for 2 years I was able to put 50% plus closing costs down.

After we moved in we made a budget based on the least amount of money I could possible earn. Everything extra went into the house, including last years tax return and my retention bonus plus a few weeks of unexpected overtime work. I also put in 2 full paychecks since we receive 26 per year.

First payment on the $100,000 mortgage was on June 16th, 2014
Final payoff payment was on October 6th 2015

Ended up paying about $6,000 for the loan including interest (3.625% @ 15 years).

Age 33
Married with 2 children
Total family salary around $120,000
Net worth was below $30k 4 years ago, Around $275k today with no outside sources of income.

Next step is reducing our budget further/again (It started slipping as soon as we were close to paying the house off) and to start investing
Title: Re: Mortgage Payoff Club!!
Post by: YoungGranny on October 26, 2015, 06:42:40 AM
mefla - any reason you're waiting until January to refinance? Just out of my own curiousity :)

mies - I LOVE amortization tables :) I actually enjoy building my own in excel so I can track numbers better and it's how I convinced my SO to pay down the mortgage faster and refinance. We're on track to pay $20,000 in interest over the life of the loan vs the $130,000 originally projected with our 30 year mortgage. (plus $1,400 we paid in PMI but at least that's off now....face punch for sure!)


Congratulations Imonaboat! Must feel nice to have that sucker paid off!!
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on October 27, 2015, 10:42:24 PM
mefla - any reason you're waiting until January to refinance? Just out of my own curiousity :)

mies - I LOVE amortization tables :) I actually enjoy building my own in excel so I can track numbers better and it's how I convinced my SO to pay down the mortgage faster and refinance. We're on track to pay $20,000 in interest over the life of the loan vs the $130,000 originally projected with our 30 year mortgage. (plus $1,400 we paid in PMI but at least

YoungGranny: two reasons:
1) Principal will be at-or-below $100k, so a refi will free up at least $400/month of cash flow. We will then be able to live on one salary and save the other.
2) it has been my experience that interest rates are at their lowest in January-February months.
Title: Facing Layoff but I am in Re: Mortgage Payoff Club!!
Post by: freeatlast on October 29, 2015, 01:29:33 PM
I may be facing a layoff, but luckily I have another income stream. If it happens, things will be tight but ok til I can get another gig. Even if I don't get layed off, I will likely leave cause the job is causing anxiety and is soul sucking.....

I have reduced my 30 year fixed at 3.625 from $262k to $222k. I can get it down to $200k with cash on hand still having a cushion of a few months emergency fund. 

Doing the math, if I reduce to $200k at 15 years with an APR of 3, my payments only go up a couple hundred bucks which we are paying in extra anyway.  So I am thinking I need to refi right NOW while I still am employed (layoffs wouldn't be til 2016 first quarter).

If I can pay this sucker off, then I am fully FI..... Gonna do it no matter what!
Title: Re: Facing Layoff but I am in Re: Mortgage Payoff Club!!
Post by: Faraday on October 29, 2015, 06:25:19 PM
I may be facing a layoff, but luckily I have another income stream. If it happens, things will be tight but ok til I can get another gig. Even if I don't get layed off, I will likely leave cause the job is causing anxiety and is soul sucking.....

You must be employed in high-tech too. :-/

Quote
I have reduced my 30 year fixed at 3.625 from $262k to $222k. I can get it down to $200k with cash on hand still having a cushion of a few months emergency fund. 

Remarkable! I don't know where you are located, but in the Southeast US, you will have gone from "Jumbo" territory into "Normal loan" territory, so you might be able to get under 3% (depending on your FICO).

Quote
Doing the math, if I reduce to $200k at 15 years with an APR of 3, my payments only go up a couple hundred bucks which we are paying in extra anyway.  So I am thinking I need to refi right NOW while I still am employed (layoffs wouldn't be til 2016 first quarter).

Not a bad idea! Historically, lower interest rates are available Nov - January:
http://www.freddiemac.com/pmms/pmms30.htm
Title: Re: Mortgage Payoff Club!!
Post by: Bee21 on October 29, 2015, 08:27:41 PM
 We are getting very close to the finish line (<5000). I am pestering the man to book the meeting with the bank early December to finalise this before Christmas. And then, we will be co-owners no more. Somebody once wrote that paying off the mortgage is addictive, I am slightly obsessed with reducing the balance now.
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on October 29, 2015, 11:20:17 PM
We are getting very close to the finish line (<5000). I am pestering the man to book the meeting with the bank early December to finalise this before Christmas. And then, we will be co-owners no more. Somebody once wrote that paying off the mortgage is addictive, I am slightly obsessed with reducing the balance now.

Wow! Great to watch someone actually get there!
Title: Re: Mortgage Payoff Club!!
Post by: allsummerlong on October 30, 2015, 10:11:41 AM
We are getting very close to the finish line (<5000). I am pestering the man to book the meeting with the bank early December to finalise this before Christmas. And then, we will be co-owners no more. Somebody once wrote that paying off the mortgage is addictive, I am slightly obsessed with reducing the balance now.

Wow! Great to watch someone actually get there!

Agreed! I'm so excited for you :)

Also, I so hear you on the addictiveness of paying it off.
Title: Re: Mortgage Payoff Club!!
Post by: FerrumB5 on October 30, 2015, 10:26:52 AM
My *first* mortgage bill is due Nov. 1st, 2015.
225k for 20 years at 3.625%

I calculated that if I throw extra $100 each month towards principal, I save ~10k in interest and 1yr11mo in length. Let's round to 2 years, so mortgage length is 18 years.
Now, if I start from $3k, buy VSMTX and add $100 each month to it, in same 18 years my interest (given average 7%/yr) is $29k.

Net gain is $19k in favor of investing vs mortgage extra payments. Does it make sense to go this way? Am I doing the right math or did I not take into account some factors?
Title: Re: Mortgage Payoff Club!!
Post by: Clean Shaven on October 30, 2015, 11:34:26 AM
My *first* mortgage bill is due Nov. 1st, 2015.
225k for 20 years at 3.625%

I calculated that if I throw extra $100 each month towards principal, I save ~10k in interest and 1yr11mo in length. Let's round to 2 years, so mortgage length is 18 years.
Now, if I start from $3k, buy VSMTX and add $100 each month to it, in same 18 years my interest (given average 7%/yr) is $29k.

Net gain is $19k in favor of investing vs mortgage extra payments. Does it make sense to go this way? Am I doing the right math or did I not take into account some factors?
1) Does that net $19k gain factor in the $3k initial Vanguard purchase?  (did you also apply a $3k first extra payment of principal to the mortgage?)

2) Mathematically, a 7% average return on investment achieves a better outcome than prepaying a 3.625% mortgage. Nobody disputes this. The gray area where all the debate lies is your own personal comfort with that leveraged investment, vs. a guaranteed return by prepayment.

Me, I'm prepaying like crazy on a 30-year 3.5% note, which I hope to have completely paid in January 2016. Did I lose $ over the last 3 years (the duration of the mortgage so far) by doing this, rather than investing? Absolutely. But the market could have gone the other way and crashed in 2013-2014.  I'm saving plenty in other investments too, so I'm comfortable with these choices.
Title: Re: Mortgage Payoff Club!!
Post by: FerrumB5 on October 30, 2015, 11:43:10 AM
Clean Shaven - thanks! I indeed forgot to add 3k towards one time payment in calculations. The savings ar 12.6k then, so net difference is still substantial in case of direct investments.
Comfort zone? Not sure yet, as I haven't made payments yet :) I will surely refinance in the next few years - already 30 year mortgage rates are approaching my 3.625% 20 year (when I applied, 30 yr was 4.01+, now it's around 3.7).
Title: Re: Mortgage Payoff Club!!
Post by: SwordGuy on October 31, 2015, 07:54:43 AM
Paid off our home last month ;)

We spent 2 years looking for the perfect house, saving tons of money while occasionally submitted very low ball offers on a house we liked. We finally found the perfect house and they accepted an offer of $200,000, down from the asking price of $235k. Since we had been saving for 2 years I was able to put 50% plus closing costs down.

After we moved in we made a budget based on the least amount of money I could possible earn. Everything extra went into the house, including last years tax return and my retention bonus plus a few weeks of unexpected overtime work. I also put in 2 full paychecks since we receive 26 per year.

First payment on the $100,000 mortgage was on June 16th, 2014
Final payoff payment was on October 6th 2015


That's an awesome paydown rate!  Congrats!

I especially like it that you didn't "shop like a normal person" for your home.   Normal is defined as "Be in a hurry to buy.  Fall in love with a house and lose all sense of financial perspective.  Overpay.  Whine about it later."   :)

We've been looking for a new home for the last two years also.   While we were looking for rental properties we kept an eye out for ourselves.   When we found an interesting house we marked it down and kept an eye on it.   Most of them sold at a higher price than we were willing to pay.  The one we're buying in the next few weeks didn't.   We're getting our new house at 30% off the conservatively appraised value, at a price that really works for us. 

And because we remember how great it felt to pay the old mortgage off, our goal is to pay this house off faster than you did! :)

Due to circumstances we can take no credit for, that should require much less effort on our part than it did on yours.   But it will make us just as happy! :)
Title: Re: Mortgage Payoff Club!!
Post by: Debts_of_Despair on October 31, 2015, 08:00:49 AM
We are getting very close to the finish line (<5000). I am pestering the man to book the meeting with the bank early December to finalise this before Christmas. And then, we will be co-owners no more. Somebody once wrote that paying off the mortgage is addictive, I am slightly obsessed with reducing the balance now.

Is this meeting necessary?  What do you need to talk about?  Honest question.
Title: Re: Mortgage Payoff Club!!
Post by: Rural on October 31, 2015, 04:51:34 PM
We are getting very close to the finish line (<5000). I am pestering the man to book the meeting with the bank early December to finalise this before Christmas. And then, we will be co-owners no more. Somebody once wrote that paying off the mortgage is addictive, I am slightly obsessed with reducing the balance now.

Is this meeting necessary?  What do you need to talk about?  Honest question.


 I wondered this myself. When we were ready to pay ours off, we just walked into the bank.
Title: Re: Mortgage Payoff Club!!
Post by: steveo on October 31, 2015, 11:57:40 PM
I have just under 100k owing at this point. I'd like to pay it off by the end of next year.

I now owe $13,800. It won't be paid off this year but it should be paid off early January.

We killed our mortgage about 5 years before I FIRE'd...really, that was the point at which it was "all systems go" to FI...and beyond.

I think that we are in this situation now. 5-6 years and then we will be FI.
Title: Re: Mortgage Payoff Club!!
Post by: Money Badger on November 01, 2015, 05:17:56 AM

I do not know about them in particular. But I had a mixed mortgage HELOC from my bank and it gave me the added confidence that I could throw big chunks at the mortgage but still have access to a squishy emergency fund. Luckily, I never needed the HELOC, but I would highly recommend it.
[/quote]

@KIce,  THANKS!   For the suggestion about the HELOC as that is what we're going to do in case of God forbids...   I'm now waiting to hear back if our current lender will recast our first mortgage (doubtful as it's a 7 year ARM under market rate and instead they'd love to get our mortgage off their books AND sell us a new "full recourse" HELOC note at higher margins for them of course).   And the shopping continues with the most promising other lenders...
Title: Re: Mortgage Payoff Club!!
Post by: rjbf65 on November 03, 2015, 08:22:31 AM
I'll join.

Started June 2014 at 71k.

It's currently $55k.  Goal is to finish it off by next June.   Have 20k in cash that would finish it off by then.  We are currently investing 15% as well.   Basically doing the Dave Ramsey plan.

Currently down to $51,500.  Hoping to get under $50K a month from today.

Down to $49660.  Was able to throw an extra $1555 at it this time.  Budgeting to be able to throw an extra $2500 next month.

$46,950 -- a $2,710 reduction this month.  October should be a little better with the magic of the 3 paychecks for me this month.  Should be under $40K by end of the year.

$41,843 -- a $5,107 reduction this month.  The 3rd paycheck was big this time.  Would love to be able to do that every month!  My goal for end of November is to get under 40K.  Once I'm at the $40K mark, I'll have about equal amounts of cash in the bank and mortgage balance.  Still also maxing out 2 Roth IRA's which speaks for $917 per month.  It is always tempting to stop the Roth or to throw a bunch of the available cash at it.  I think I'll just stay the course of throwing all the extra cash that was left over after the month at it.  Once the mortgage is gone, all towards investing. 
Title: Re: Mortgage Payoff Club!!
Post by: BBub on November 03, 2015, 09:36:26 AM
Wow rjb you're kicking some ass.  I think the hard part would be holding $40k cash while eyeing the (40k) mortgage bal.  Especially as the spread widens & it becomes 42k vs (38), 45 vs (35) and so on..  Of course, that's assuming you have actual cash savings instead of securities or qualified holdings.  At some point I'd be tempted to simply wipe out the mortgage & still have $X cash on hand.
Title: Re: Mortgage Payoff Club!!
Post by: rjbf65 on November 03, 2015, 10:17:25 AM
Wow rjb you're kicking some ass.  I think the hard part would be holding $40k cash while eyeing the (40k) mortgage bal.  Especially as the spread widens & it becomes 42k vs (38), 45 vs (35) and so on..  Of course, that's assuming you have actual cash savings instead of securities or qualified holdings.  At some point I'd be tempted to simply wipe out the mortgage & still have $X cash on hand.

It is actual cash in the bank.  It's a constant battle in my mind on what to do.  I've thought about throwing $20K at it now and keeping $20K in the bank.  Or wating till I have $20K balance left and $40K in the bank to knock it out.  Just looked and I should have another 3 check month in March of 2016.  Which is also about tax refund time.  Should really be able to put the hurt on the mortgage balance then. 
Title: Re: Mortgage Payoff Club!!
Post by: K-ice on November 03, 2015, 01:56:46 PM
It is actual cash in the bank. 

Since it is actual cash I would keep a small emergency fund and throw the extra at the mortgage. Your mortgage probably has a limit of what you can pre-pay. I would try to max that.

Now if it was invested, made some high savings interest within 1% of your mortgage interest, or you had a good investment plan for it, then you could slow down on the mortgage.
Title: Re: Mortgage Payoff Club!!
Post by: Debts_of_Despair on November 03, 2015, 03:59:00 PM
Wow rjb you're kicking some ass.  I think the hard part would be holding $40k cash while eyeing the (40k) mortgage bal.  Especially as the spread widens & it becomes 42k vs (38), 45 vs (35) and so on..  Of course, that's assuming you have actual cash savings instead of securities or qualified holdings.  At some point I'd be tempted to simply wipe out the mortgage & still have $X cash on hand.

It is actual cash in the bank.  It's a constant battle in my mind on what to do.  I've thought about throwing $20K at it now and keeping $20K in the bank.  Or wating till I have $20K balance left and $40K in the bank to knock it out.  Just looked and I should have another 3 check month in March of 2016.  Which is also about tax refund time.  Should really be able to put the hurt on the mortgage balance then.

I am in almost the exact same boat as you.  I'm throwing 20k at the mortgage when the renaming principal gets to be near that amount.  With no mortgage I figure I my emergency fund doesn't need to be as large.  Inflation is eventually going to turn your savings to dust anyway.
Title: Re: Mortgage Payoff Club!!
Post by: BBub on November 03, 2015, 04:39:28 PM
Yeah the prudent move would be to decide on the minimum amount of cash you are comfortable keeping on hand & throw the rest at the mortgage.  If that's $20k, then throw the other 20 at the mortgage.

Now, personally.... I would probably wipe it out next month with the entire $40k then live on the edge for a few months with dangerously low cash levels.  But that's just one of my weaknesses.  I am impatient with financial goals & tend to freak out on them.  I haven't gotten serious yet about the mortgage payoff, but when I do it'll probably be an agonizing yet quick binge / sprint.  What can I say, I just like to rip the bandaid off.
Title: Re: Mortgage Payoff Club!!
Post by: NoraLenderbee on November 04, 2015, 10:26:06 AM
I want to pay off my mortgage. But I live in California. If I did that, the amount of capital tied up in my house would be equal to about 50% of my liquid net worth. It makes me nervous to have that much of my money in one single asset. I keep going back and forth. What to do? I would save about 900/month (P&I).
Title: Re: Mortgage Payoff Club!!
Post by: Neustache on November 04, 2015, 12:58:21 PM
NoraLenderbee - one option is to look into paying down a chunk and then recasting your mortgage for a small fee, if your lender will do that.  Recasting is when they take any extra principle paid, and then re-amortorize for the rest of the life of the loan, so you get a smaller monthly payment.  It's a nice middle ground - you get the benefit of lower payments and more cash flow and for people like you then you don't have to have a huge percentage of equity in one place. 

We are paying off our house, but we are in the Midwest and the equity in this house will be about 1/8 of our total net worth - I'm fine with that!
Title: Re: Mortgage Payoff Club!!
Post by: Money Badger on November 04, 2015, 06:18:29 PM
+1 to what Neustache said about the recast.   Our bank (that is now the 3rd or 4th servicer of our 3 year old mortgage) has OK'd the recast for a $250 fee.   So that frees up significant cash flow and cuts our interest payment by more than half.   The bank wins by getting to loan our cash out 3 or more times with leverage and at a higher rate.   The FIRE plan and the mortgage beast will be done by 2021!
Title: Re: Mortgage Payoff Club!!
Post by: Debts_of_Despair on November 05, 2015, 02:28:33 PM
38.2k.

33.2k.  Pretty ideal month, other than a $250 furnace repair.
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on November 05, 2015, 02:30:49 PM
38.2k.

33.2k.  Pretty ideal month, other than a $250 furnace repair.

You Studly McStuderson, I envy.
Someday, I'll be there. I hope I can enjoy the obsession as much as you do.
Title: Re: Mortgage Payoff Club!!
Post by: Debts_of_Despair on November 05, 2015, 07:59:09 PM
Yeah, obsession is a good description but it's a short term project. The light at the end of the tunnel is almost blinding.
Title: Re: Mortgage Payoff Club!!
Post by: NoraLenderbee on November 05, 2015, 09:32:24 PM
Thanks for the idea. We actually refi'd a few years ago, after paying down 50K, and we put another 50K on it this year. The problem is that I want to be mortgage-free *and* not have too much tied up in equity. #MustachianProblems
Title: Re: Mortgage Payoff Club!!
Post by: Imonaboat on November 06, 2015, 05:55:23 AM
I dug deep into my emergency fund to pay off my house, dropping my normal 10k down to around 700. Now I'm fiddling my thumbs for a few months until it builds up when I really want to open my investment account. If I could do it again I would have let the last few months ride out while I saved for the next goal heh.
Title: Re: Mortgage Payoff Club!!
Post by: Debts_of_Despair on November 06, 2015, 07:34:47 AM
I dug deep into my emergency fund to pay off my house, dropping my normal 10k down to around 700. Now I'm fiddling my thumbs for a few months until it builds up when I really want to open my investment account. If I could do it again I would have let the last few months ride out while I saved for the next goal heh.

Geez, makes me feel a little better about taking just 2/5 of my savings.
Title: Re: Mortgage Payoff Club!!
Post by: asauer on November 10, 2015, 06:09:49 AM
Threw another chunk of $ at the mortgage this month!  Down to 100,800- hopefully I scrounge/ hustle the other 801 and be under 100k by the end of this month!
Title: Re: Mortgage Payoff Club!!
Post by: Imonaboat on November 10, 2015, 08:17:59 AM
Threw another chunk of $ at the mortgage this month!  Down to 100,800- hopefully I scrounge/ hustle the other 801 and be under 100k by the end of this month!

Keep it up! Before long it will be similar to a non-mustacian car note!
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on November 10, 2015, 12:45:57 PM
Threw another chunk of $ at the mortgage this month!  Down to 100,800- hopefully I scrounge/ hustle the other 801 and be under 100k by the end of this month!

Hit it and git it!

I'm aiming to get under $100k in January 2016. Still on target, but it's gonna be close....
Title: Re: Mortgage Payoff Club!!
Post by: flowrider on November 10, 2015, 01:17:50 PM
We recently sold our house privately and bought in a slightly "less desirable" area about 1km away. This allowed us to carve $90k off the mortgage and we will now be paid off in 2 years instead of 10 years. We also now have a nicer yard for the kids and we are not positioned on a busy main road - bonus! Looking forward to being mortgage free!
Keep up the good work folks
Title: Re: Mortgage Payoff Club!!
Post by: Money Badger on November 10, 2015, 07:34:38 PM
The deed is done on the mortgage recast to drop the mortgage under $110K!   This was from a chunk inherited from what was left from sale of my Dad's house so somewhere he's hopefully smiling.    After analysis paralysis on this for months, a feeling of awesome Jean-Luc-Picard-esque calm has been with me all afternoon...
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on November 10, 2015, 07:36:22 PM
The deed is done on the mortgage recast to drop the mortgage under $110K!   This was from a chunk inherited from what was left from sale of my Dad's house so somewhere he's hopefully smiling.    After analysis paralysis on this for months, a feeling of awesome Jean-Luc-Picard-esque calm has been with me all afternoon...

Komputah! Tea, Earl Gray, Hot!
Engage! Make it so, Numbaa Wan!
Title: Re: Mortgage Payoff Club!!
Post by: Neustache on November 11, 2015, 05:50:36 AM
The deed is done on the mortgage recast to drop the mortgage under $110K!   This was from a chunk inherited from what was left from sale of my Dad's house so somewhere he's hopefully smiling.    After analysis paralysis on this for months, a feeling of awesome Jean-Luc-Picard-esque calm has been with me all afternoon...

Sweet!!  Now you make me want to save a chunk and put it towards a recast!  Ha!  Our minimum is 10K but to make it feel more worthwhile I'd want to pay down about 30K to make our PITI payments under $700.  I really think recasts are a nice middle ground for people wanting to pay off the mortgage so that they can then benefit from the extra cashflow.  Shoot, once our mortgage is under $700 a month I may not pay it off early just because that amount is really easy to come up with plus our other monthly expenses even on a full-time job I could get (about 30K a year)
Title: Re: Mortgage Payoff Club!!
Post by: Money Badger on November 11, 2015, 05:23:04 PM
Neustache (and all),  Just do it to the point it makes sense for your situation.   It all depends on the lender about the recast and whether your rate is above or below current market.   We did it with a new "servicer" that is obviously looking for ways to drum up business or cash in on the below market rate loans they bought.    In this case, it was PNC Mortgage and they are quite willing and easy to work with.    They were also quite eager to sell me a HELOC that requires a minimum draw hoping we'll borrow the money back at a higher rate for home improvements or toy purchases.   Good luck with that!  ;-)

Faraday, Very good!   Now if you'll excuse me, I'll be in my Ready Room!
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on November 11, 2015, 07:18:43 PM
Faraday, Very good!   Now if you'll excuse me, I'll be in my Ready Room!

Title: Re: Mortgage Payoff Club!!
Post by: Money Badger on November 12, 2015, 03:11:52 PM
Niiiiice!
Title: Re: Mortgage Payoff Club!!
Post by: plainjane on November 17, 2015, 06:45:32 AM
The SO has always looked at my desire to pay off the mortgage as a personality quirk.  Where my parents paid off the mortgage soon after I was born, I think the other side only finished paying off their mortgage in the past 5 years or so.

Until last night, when they logged into that account (which they do on at least a monthly basis to populate the NW sheet), and realized that every sub-account has more money in it than is owing on the mortgage.  Our taxes+efund is higher, our travel fund is higher (we have a big trip planned for the spring), and obviously the retirement account is higher.  The conversation was a bit giddy.

It feels like we're now on the same page as to the possibilities, and I'm not just being humoured.  (I'm not deluding myself, there still won't be any traction on dumping cable.)
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on November 17, 2015, 10:56:10 AM
The SO has always looked at my desire to pay off the mortgage as a personality quirk.  Where my parents paid off the mortgage soon after I was born, I think the other side only finished paying off their mortgage in the past 5 years or so.

Until last night, when they logged into that account (which they do on at least a monthly basis to populate the NW sheet), and realized that every sub-account has more money in it than is owing on the mortgage.  Our taxes+efund is higher, our travel fund is higher (we have a big trip planned for the spring), and obviously the retirement account is higher.  The conversation was a bit giddy.

It feels like we're now on the same page as to the possibilities, and I'm not just being humoured.  (I'm not deluding myself, there still won't be any traction on dumping cable.)

Now that's a great story! One helluva good "personality quirk" you have there!

Sorry about not being able to get rid of cable, though. Sucks, bad. When we got rid of it over 10 years ago, that $130/month made a HUGE impact!

Title: Re: Mortgage Payoff Club!!
Post by: Bee21 on November 18, 2015, 06:56:59 PM
Under 3k people! 2 more payments to go.
Title: Re: Mortgage Payoff Club!!
Post by: Bee21 on November 18, 2015, 07:06:55 PM
We are getting very close to the finish line (<5000). I am pestering the man to book the meeting with the bank early December to finalise this before Christmas. And then, we will be co-owners no more. Somebody once wrote that paying off the mortgage is addictive, I am slightly obsessed with reducing the balance now.

Is this meeting necessary?  What do you need to talk about?  Honest question.

Not entirely sure. But there are extra costs associated w paying it off early, some paperwork related to the property title etc etc. plus we will have to notify the insurance companies as well that the bank has no financial interest etc etc. nobody knows exactly what we need to do as having a mortgage is the norm :)  i guess it is better to have a meeting w somebody who is prepared w the necessary paperwork than ambushing a random teller w the last 5 dollars we owe them.
Title: Re: Mortgage Payoff Club!!
Post by: K-ice on November 18, 2015, 10:15:40 PM
Under 3k people! 2 more payments to go.

Nice work.

As you mentioned, be sure to call your home insurance once the mortgage is zero.

Not having a mortgage & getting a new roof saved us over $300/year.
Title: Re: Mortgage Payoff Club!!
Post by: YoungGranny on November 19, 2015, 06:35:19 AM
Refinance is complete! Mortgage balance is $131,500. Decided my goal will be to get it under $100k in 1 year. Hopefully completely paid off in 5 years or less but I think I need a short-term goal to focus on for motivation.

Sent a chunk of money at it again this month, down to $129,532

My loan got sold to Wells Fargo does anybody else have them as a servicer? I absolutely hate their website, seems like it hasn't been updated since the 90's. No option to see an updated amortization schedule after a payment has been made or even what your updated maturity date is. I know I can stop being lazy and do this all in excel myself but it was nice to have those available for reference with my old servicer. Hoping I'm just missing these features somewhere on Wells Fargo's website.
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on November 19, 2015, 11:32:05 AM
Refinance is complete! Mortgage balance is $131,500. Decided my goal will be to get it under $100k in 1 year. Hopefully completely paid off in 5 years or less but I think I need a short-term goal to focus on for motivation.

Sent a chunk of money at it again this month, down to $129,532

CONGRATULATIONS YG!!! YOU GO grilfrand! :-)

I hope to join you in "Refinanceland" in the next 2 or 3 months!
Title: Re: Mortgage Payoff Club!!
Post by: Money Badger on November 19, 2015, 08:42:51 PM
Under 3k people! 2 more payments to go.

So close Bee21...   Sweet freedom!!!
Title: Re: Mortgage Payoff Club!!
Post by: YoungGranny on November 24, 2015, 07:42:21 AM
Refinance is complete! Mortgage balance is $131,500. Decided my goal will be to get it under $100k in 1 year. Hopefully completely paid off in 5 years or less but I think I need a short-term goal to focus on for motivation.

Sent a chunk of money at it again this month, down to $129,532

CONGRATULATIONS YG!!! YOU GO grilfrand! :-)

I hope to join you in "Refinanceland" in the next 2 or 3 months!

Good luck with Refinancing! I honestly had a pretty pain-less process and a whole-lotta savings so I highly recommend it :)
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on November 24, 2015, 10:48:25 PM
Good luck with Refinancing! I honestly had a pretty pain-less process and a whole-lotta savings so I highly recommend it :)

Chunked another $3.5k at the principal today. We're on-target for a January refi.
Fingers crossed interest rates stay low.
Title: Re: Mortgage Payoff Club!!
Post by: Money Badger on November 25, 2015, 04:47:18 AM
Go Faraday!   Just a thought, but you could refi a chunk NOW and get a small shorter term fixed loan or HELOC for the part you commit to kill early.   That reduces the risk of rate increase which indeed is imminent esp. on the shorter term fixed loans and ARMs next year.    And doing this in Dec is usually best as the bankers have less business and year end approaching.   (of course everyone else may be doing same thing to beat the Fed increase and it's a hassle at the holidays but it pays off)  We refi'd in Nov 2 years ago and it was great (closing atty came to our house to close, etc.).    Wouldnt get that treatment in the spring busy season for real estate.
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on November 25, 2015, 06:34:13 PM
Go Faraday!   Just a thought, but you could refi a chunk NOW and get a small shorter term fixed loan or HELOC for the part you commit to kill early.   That reduces the risk of rate increase which indeed is imminent esp. on the shorter term fixed loans and ARMs next year.    And doing this in Dec is usually best as the bankers have less business and year end approaching.   (of course everyone else may be doing same thing to beat the Fed increase and it's a hassle at the holidays but it pays off)  We refi'd in Nov 2 years ago and it was great (closing atty came to our house to close, etc.).    Wouldnt get that treatment in the spring busy season for real estate.

I researched the prime rates, and indentured4now, you are right. In fact, RIGHT NOW is the optimum time to refi. The strange thing is, I've watched my lender's rates bottom out in January. It's as if they get their money from the fed first, then they offer it up. Seems like, anyway.

Regardless, I have a principal target to make of $100k or less and I don't have the available cash to make that target this calendar year. (My one cash resource, if I call on it, will bump up my tax burden too....) I can use my cash resource in January, but I can't use it right now or I will suffa.
Title: Re: Mortgage Payoff Club!!
Post by: rjbf65 on December 02, 2015, 08:51:39 AM
I'll join.

Started June 2014 at 71k.

It's currently $55k.  Goal is to finish it off by next June.   Have 20k in cash that would finish it off by then.  We are currently investing 15% as well.   Basically doing the Dave Ramsey plan.

Currently down to $51,500.  Hoping to get under $50K a month from today.

Down to $49660.  Was able to throw an extra $1555 at it this time.  Budgeting to be able to throw an extra $2500 next month.

$46,950 -- a $2,710 reduction this month.  October should be a little better with the magic of the 3 paychecks for me this month.  Should be under $40K by end of the year.

$41,843 -- a $5,107 reduction this month.  The 3rd paycheck was big this time.  Would love to be able to do that every month!  My goal for end of November is to get under 40K.  Once I'm at the $40K mark, I'll have about equal amounts of cash in the bank and mortgage balance.  Still also maxing out 2 Roth IRA's which speaks for $917 per month.  It is always tempting to stop the Roth or to throw a bunch of the available cash at it.  I think I'll just stay the course of throwing all the extra cash that was left over after the month at it.  Once the mortgage is gone, all towards investing.


$38,922 -- $2,921 reduction this month.  More travel and eating out this month, as well as property taxes and insurance slowed us down a bit.  But we are at the goal of being under $40K balance!  It's going down at a pretty good pace that I'm happy with!  We will have some Christmas expenses coming up this month but it shouldn't be all that bad.  My target is to hope to be under $37K at the end of December. 
Title: Re: Mortgage Payoff Club!!
Post by: pdxmonkey on December 02, 2015, 08:44:06 PM
I've been working at my mortgage for a while now. I originally had a 30 yr $146000 loan. In 2012 I refinanced into a 15 yr @ 2.875%. As of today I have about $67,500 remaining.

I flip flop between investing more and paying off the mortgage. I have been maxing out my contributions to a Roth IRA since my mid 20's and last year I maxed out my 401k (Roth) for the first time and will be doing so again this year. I had always considered retiring early, but have only recently considered retiring extremely early and finally about 2 months ago opened up a taxable investment account in addition to my 401k and IRA accounts as I'll need money outside those accounts to live on. I've put some money into this and started paying the mortgage down less aggressively although still more than the minimum payment. I really want to get it paid off even though mathematically it is not necessarily the best idea. If P/E ratio goes lower on the market I will probably not pay any extra on the mortgage.

Down to $60k as of tomorrow. I threw some dry powder at it as the S&P 500 is still near all time highs and I feel like I'm dollar cost averaging in enough per month right now. Flows out of my bank savings account into the market + my recent mortgage payments are greater than my current income so doing both isn't sustainable long term. I will probably have to slow down the mortgage payoff next year some time OR work more to keep paying it down quickly. $60k seems really close to being done, but calendar wise there is a good distance to go.
Title: Re: Mortgage Payoff Club!!
Post by: pdxmonkey on December 02, 2015, 08:44:40 PM
I've been working at my mortgage for a while now. I originally had a 30 yr $146000 loan. In 2012 I refinanced into a 15 yr @ 2.875%. As of today I have about $67,500 remaining.

I flip flop between investing more and paying off the mortgage. I have been maxing out my contributions to a Roth IRA since my mid 20's and last year I maxed out my 401k (Roth) for the first time and will be doing so again this year. I had always considered retiring early, but have only recently considered retiring extremely early and finally about 2 months ago opened up a taxable investment account in addition to my 401k and IRA accounts as I'll need money outside those accounts to live on. I've put some money into this and started paying the mortgage down less aggressively although still more than the minimum payment. I really want to get it paid off even though mathematically it is not necessarily the best idea. If P/E ratio goes lower on the market I will probably not pay any extra on the mortgage.

Down to $60k as of tomorrow. I threw some dry powder at it as the S&P 500 is still near all time highs and I feel like I'm dollar cost averaging in enough per month right now. Flows out of my bank savings account into the market + my recent mortgage payments are greater than my current income so doing both isn't sustainable long term. I will probably have to slow down the mortgage payoff next year some time OR work more to keep paying it down quickly. $60k seems really close to being done, but calendar wise there is a good distance to go.
Title: Re: Mortgage Payoff Club!!
Post by: pdxmonkey on December 02, 2015, 08:45:32 PM
Threw another chunk of $ at the mortgage this month!  Down to 100,800- hopefully I scrounge/ hustle the other 801 and be under 100k by the end of this month!

Hit it and git it!

I'm aiming to get under $100k in January 2016. Still on target, but it's gonna be close....

I hope you can make it by the end of the year. Definitely a milestone to celebrate!
Title: Re: Mortgage Payoff Club!!
Post by: Bee21 on December 02, 2015, 08:53:11 PM
@1200! One more to go.

Best Christmas present ever.we'll have a paid off house and a white kitchen, yay. and I managed to persuade the man to repaint the kitchen instead of replacing it. He is more enthusiastic about the painting since we found out that our butcher just spent 25k replacing his. : D

By the way, just wondering. Do you guys spend $ on renovations when being in the payoff mode? I always said that we would celebrate with forking out money for a new kitchen, but changed my mind. A repainted version would do, as long as it is not bluuuuuuue.
Title: Re: Mortgage Payoff Club!!
Post by: asauer on December 03, 2015, 06:22:22 AM
@1200! One more to go.

Best Christmas present ever.we'll have a paid off house and a white kitchen, yay. and I managed to persuade the man to repaint the kitchen instead of replacing it. He is more enthusiastic about the painting since we found out that our butcher just spent 25k replacing his. : D

By the way, just wondering. Do you guys spend $ on renovations when being in the payoff mode? I always said that we would celebrate with forking out money for a new kitchen, but changed my mind. A repainted version would do, as long as it is not bluuuuuuue.

Wow!  Congratulations!  That is a HUGE Christmas present!
Title: Re: Mortgage Payoff Club!!
Post by: asauer on December 03, 2015, 06:24:03 AM
Down to 94K!  Finally under 100K!  We may just pay this sucker off in 2016 (she says as she is simultaneously crossing all fingers and toes while knocking on wood).
Title: Re: Mortgage Payoff Club!!
Post by: Neustache on December 03, 2015, 06:33:17 AM
@1200! One more to go.

Best Christmas present ever.we'll have a paid off house and a white kitchen, yay. and I managed to persuade the man to repaint the kitchen instead of replacing it. He is more enthusiastic about the painting since we found out that our butcher just spent 25k replacing his. : D

By the way, just wondering. Do you guys spend $ on renovations when being in the payoff mode? I always said that we would celebrate with forking out money for a new kitchen, but changed my mind. A repainted version would do, as long as it is not bluuuuuuue.

I have plans for painting our front door red (it may or may not be a Dutch tradition to paint your door red when it's free and clear, but seems unlikely it's a long standing tradition, but I want to start the tradition) and doing some landscaping, making the curb appeal look nicer.  We might do some minor kitchen upgrades (new countertops, new floors, new wallpaper) but nothing major.  All of our stuff is just fine, if not dated, and as I get more and more into efficiency I just have a hard time replacing anything that is a want and not a need. 
Title: Re: Mortgage Payoff Club!!
Post by: plainjane on December 03, 2015, 07:15:51 AM
@1200! One more to go.
[...]
By the way, just wondering. Do you guys spend $ on renovations when being in the payoff mode? I always said that we would celebrate with forking out money for a new kitchen, but changed my mind. A repainted version would do, as long as it is not bluuuuuuue.

Congratulations!

Yes, we have spent money on renovations, but for most of it we weren't really in true pay-down mode.  At the time (roof, back deck, eaves, siding, basement, bathroom) we generally felt like holding off on the renovation would put us into a situation where the potential costs of delay.  For a couple of them, I had decided not to put so much emphasis on paying down the mortgage because the rates were so low - I had increased our savings rate up to the tax-advantaged maximums and put the leftover aside for renovations. We always split the focus three ways, which is why it will take us almost 10 years to get rid of the mortgage.

For the kitchen, I was initially planning on redirecting the mortgage-free cash flow, but currently the plan is to reach the next FI milestone (right now we have day to day living covered under the 4% rule, but not property tax or maintenance or travel) and then do the kitchen.  Or move/downsize.
Title: Re: Mortgage Payoff Club!!
Post by: Debts_of_Despair on December 03, 2015, 02:45:17 PM
33.2k.  Pretty ideal month, other than a $250 furnace repair.

27.4k effective tomorrow.

After giving it a lot of thought, I want to be done with this project before the end of the calendar year.  To accomplish this, I am going to raid my savings a little bit harder than planned, take my checking account to lows it has never seen before, and push off all bills until the last possible day.  I essentially gained a "bill free" 30 days by going from paying them immediately in November to paying them on the due date in December.  Once I am done with the payoff I can recover everything in about a month.

My next post in this thread should be my last!  Thirteen more days!
Title: Re: Mortgage Payoff Club!!
Post by: Threshkin on December 03, 2015, 03:11:48 PM
33.2k.  Pretty ideal month, other than a $250 furnace repair.

27.4k effective tomorrow.

After giving it a lot of thought, I want to be done with this project before the end of the calendar year.  To accomplish this, I am going to raid my savings a little bit harder than planned, take my checking account to lows it has never seen before, and push off all bills until the last possible day.  I essentially gained a "bill free" 30 days by going from paying them immediately in November to paying them on the due date in December.  Once I am done with the payoff I can recover everything in about a month.

My next post in this thread should be my last!  Thirteen more days!

That is what I did for my last $70K.  It dropped my cash reserves lower (much lower!) than I liked but was worth it to say "goodbye" to my mortgage.

Congratulations!
Title: Re: Mortgage Payoff Club!!
Post by: pdxmonkey on December 03, 2015, 09:32:47 PM
$139k (!!!)
$131,600
$126,000.
$119,200 !!

Now just squeaking in under $115,000.

I continue to be amazed at how good it feels to pass these milestones. 3 years left on our current plan.

& CONGRATS @Bee21 !! great way to ring in the new year.

You'll be under 6 figures in no time. Good work!
Title: Re: Mortgage Payoff Club!!
Post by: rulesofacquisition on December 04, 2015, 09:34:40 AM
Posting to keep track of my progress. Bought house in June 2014 for $120,000 and financed $108,000. Owe $100,728.12. 30 year loan but have paid based on 15 years every month. Have been using debt snowball and have one more debt before attacking house payment.
Title: Re: Mortgage Payoff Club!!
Post by: K-ice on December 04, 2015, 12:17:19 PM
Posting to keep track of my progress. Bought house in June 2014 for $120,000 and financed $108,000. Owe $100,728.12. 30 year loan but have paid based on 15 years every month. Have been using debt snowball and have one more debt before attacking house payment.

I love the "sign up for 30y pay it off like it is 15y" method. This gives you the peace of having a lower payment if needed, but the power to pay it off faster.

Check that those extra payments are going against the principal. (I think so based on your numbers but I'm not sure because I don't know your interest rate.)

What I love is that you cut your time in half but it is not the same as doubling your payments.

You have probably crunched your own numbers but here is an example for others:
Assume 30y at 3.5 % payment = $483
Assume 15y at 3.5 % payment = $770
Double payment 30y at 3.5% = $966  but this is paid off in 11.3y

Also, just be careful how big that other debt is and at what rate.  Is the other debt CC, student loan ... If it is higher than the mortgage rate I would pay the 30y mortgage at a 30y rate and throw the extra into the higher interest debt payment first.  As soon as that debt is gone then you should get back into the pay like it is 15y habit (or 10y).




Title: Re: Mortgage Payoff Club!!
Post by: rulesofacquisition on December 04, 2015, 01:03:10 PM
Posting to keep track of my progress. Bought house in June 2014 for $120,000 and financed $108,000. Owe $100,728.12. 30 year loan but have paid based on 15 years every month. Have been using debt snowball and have one more debt before attacking house payment.

I love the "sign up for 30y pay it off like it is 15y" method. This gives you the peace of having a lower payment if needed, but the power to pay it off faster.

Check that those extra payments are going against the principal. (I think so based on your numbers but I'm not sure because I don't know your interest rate.)

What I love is that you cut your time in half but it is not the same as doubling your payments.

You have probably crunched your own numbers but here is an example for others:
Assume 30y at 3.5 % payment = $483
Assume 15y at 3.5 % payment = $770
Double payment 30y at 3.5% = $966  but this is paid off in 11.3y

Also, just be careful how big that other debt is and at what rate.  Is the other debt CC, student loan ... If it is higher than the mortgage rate I would pay the 30y mortgage at a 30y rate and throw the extra into the higher interest debt payment first.  As soon as that debt is gone then you should get back into the pay like it is 15y habit (or 10y).






The last debt is at 0% for about $15,000 to a lawyer. I would rather not stop the 15 year payment due to my age (47), but making the lawyer payment brings up pretty awful thoughts/feelings, so maybe better psychologically to kill it faster. We're not high earners, getting the $15,000 paid off is a year or 2 project. The extra mortgage payments per year are about $3,300. Advice?
Title: Re: Mortgage Payoff Club!!
Post by: steveo on December 04, 2015, 08:09:51 PM
I now owe $13,800. It won't be paid off this year but it should be paid off early January.

Today its $7,665.45. 3 more pays (per fortnight) to go.
Title: Re: Mortgage Payoff Club!!
Post by: Neustache on December 05, 2015, 05:40:06 AM
^^Congrats!  So many are so close to paying theirs off - it's very exciting!!
Title: Re: Mortgage Payoff Club!!
Post by: FIREby35 on December 05, 2015, 06:45:05 AM
Hey everyone - I posting for the first time. We have a balance of 41k on a 200k house. We bought in Feb. 2014. I'm posting to follow and just because I needed to share the story with someone - we have been pretty silent about it with family and friends.
Title: Re: Mortgage Payoff Club!!
Post by: mies on December 05, 2015, 08:20:35 AM
Hey everyone - I posting for the first time. We have a balance of 41k on a 200k house. We bought in Feb. 2014. I'm posting to follow and just because I needed to share the story with someone - we have been pretty silent about it with family and friends.

Nice Job! Sounds like you'll have that monkey off your back pretty soon.
Title: Re: Mortgage Payoff Club!!
Post by: K-ice on December 05, 2015, 09:13:33 PM

The last debt is at 0% for about $15,000 to a lawyer. I would rather not stop the 15 year payment due to my age (47), but making the lawyer payment brings up pretty awful thoughts/feelings, so maybe better psychologically to kill it faster. We're not high earners, getting the $15,000 paid off is a year or 2 project. The extra mortgage payments per year are about $3,300. Advice?

Well with zero interest there is no need to rush.
But with the emotional closure I wouldn't drag it out too long either.

How's the payment made? Is it a cheque?

So you think you can pay it off in 1-2years.

Can you just get on an auto pay plan say $1,000 per month for 15 months?
Maybe $750 for 20 months.

Just be sure you have enough money in the account but you don't need to physically write a cheque.

I'd find a way to set & forget the lawyer payment if possible.



Title: Re: Mortgage Payoff Club!!
Post by: Money Badger on December 06, 2015, 08:10:02 AM
Mrs. Indentured and I have the goal of payoff in 5 years on a $249k mortgage without gutting our current stash.   

Just mailed the December payment and the resulting balance as of 12/31/2015 will be (drum roll please):  $109,429.99!    Gonna be a challenge in 2016 to continue killing it due big ticket expenses coming, but will "git'r done" somehow.
Title: Re: Mortgage Payoff Club!!
Post by: cheddarpie on December 06, 2015, 10:21:41 AM
By the way, just wondering. Do you guys spend $ on renovations when being in the payoff mode? I always said that we would celebrate with forking out money for a new kitchen, but changed my mind. A repainted version would do, as long as it is not bluuuuuuue.

I'm down to just around 70k, which is just around what I have in my savings/emergency fund account ... I'm not ready to gut my savings or emergency fund yet, but it is amazing knowing that I could technically be debt free tomorrow if I wanted to be!! I don't want to also me money free, and I'm thinking about switching to a less lucrative career (SOON), so I'm going to hold tight for now ... but my plan is to keep paying 2k/month in 2016 and then see how things are going a year from now and potentially pay it all off then. WOOHOO!

As for renovations, I've done a few small things -- new lighting fixtures when I moved in, painting everything, some necessary repairs, some DIY landscaping, and 5k worth of work in my basement rental unit (with very necessary new carpeting), but no major projects. My big projects will be new kitchen counters (can't wait; I have pretty ugly laminate that is chipping and peeling in many places) -- will likely wait until mortgage is done for those, as a reward :) -- and removing the carpet on my stairs and upstairs hallway and refinishing (possibly replacing) the floor underneath. That one will wait until my very elderly dog has passed (HOPEFULLY NEVER) since he uses the carpet for gripping to get up and down the stairs.

TL/DR: I figure about ~5k/year max. of home improvement/renovation is within my comfort zone while I still have a mortgage. Next year it will likely go to a new furnace.
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on December 06, 2015, 06:46:40 PM
Mrs. Indentured and I have the goal of payoff in 5 years on a $249k mortgage without gutting our current stash.   

Just mailed the December payment and the resulting balance as of 12/31/2015 will be (drum roll please):  $109,429.99!    Gonna be a challenge in 2016 to continue killing it due big ticket expenses coming, but will "git'r done" somehow.

Congrats indentured4now! I'm in the same ballpark as you right now, hoping to cross the $100k threshhold in January or February!
Title: Re: Mortgage Payoff Club!!
Post by: Money Badger on December 08, 2015, 05:03:55 AM
Awesome job Faraday...   Looking forward to joining you in the 5-digit club!
Title: Re: Mortgage Payoff Club!!
Post by: steveo on December 09, 2015, 12:30:42 PM
I now owe $13,800. It won't be paid off this year but it should be paid off early January.

Today its $7,665.45. 3 more pays (per fortnight) to go.

Now its at $4,595. 2 more pays to go.
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on December 10, 2015, 11:12:08 AM
Awesome job Faraday...   Looking forward to joining you in the 5-digit club!

Thanks i4n! You just blew my mind...dropping an entire digit off the mortgage is an exciting way to see it. With good luck and continuity, I'll be there in February 2016. To owe less on my home than a mid to high-end luxury car would really be nice.

When I tell the DW about it, I refer to "making our house as cheap as a double-wide". (BTW: that's not a disparaging comment, I've grown up in-and-around manufactured housing. I would have done a modular instead if it had been possible.)
Title: Re: Mortgage Payoff Club!!
Post by: BBub on December 10, 2015, 01:01:17 PM
I just hit 5 digits today!  It's not showing up yet, but once today's payment clears my new balance will be $99,600 or so.  It's a pretty cool milestone.  I'll be waiting for you to join Faraday!

Although mine isn't as badass, to be honest, because I'm not aggressively paying down.  My mortgage was around $123k two years ago when I got it & I've been adding enough to pay down $1k principal each month.  So, this little milestone has been 2 years in the making.  Still fun though.
Title: Re: Mortgage Payoff Club!!
Post by: PharmaStache on December 10, 2015, 02:48:37 PM
Under 100k was fun!  But under that- like 80-90k, suck.  So far from any milestone!
Title: Re: Mortgage Payoff Club!!
Post by: Alfred J Quack on December 11, 2015, 03:39:08 AM
Pay week!  Down to 65.3k.

61k at time of this post.

Now at a little over 50k.  Wife is a teacher and gets a lump sum check at the end of the school year.  Put all of it into mortage.

Right now I'm ahead of schedule.  This is way easier than I thought it would be so far.

Wow, you're going quite fast, nearly 15k in a few monts 0_0;

Ours is doing well too, got a tax return and made some smaller payments so we're down to just under 33k. 4.5k to go this year which should be easy!

OK, big update since last post.
Mortgage is now down to 29k and change. I would've gone further but the car "needed" replacing. Reason being that DW is expecting and our 4 seater Hyundai i10 just didn't cut it. So we put down a lot for an i30 (2nd hand of course) (with assistance from SIL) so there won't be any payments until (I'm guessing) late next year - also because DW will temporarily stop working and thus part of our income will be gone.

Still, having a mortgage that is less than the health insurance cost is very satisfying!
Title: Re: Mortgage Payoff Club!!
Post by: Money Badger on December 11, 2015, 07:17:00 PM
65K to 29K in 6 months is fantastic.  Enjoy every step from here!   The auto expense is just life reminding you that it wants it's fair share every month.   But you'll get the mortgage done!
Title: Re: Mortgage Payoff Club!!
Post by: plainjane on December 15, 2015, 06:00:48 AM
4 digits.  Technically the remaining amortization is four months, but I'm aiming to be done in two.

I'm thinking of celebrating once we're done by donating the equivalent of a payment to the local food bank.  How are the rest of you planning to recognize the milestone?
Title: Re: Mortgage Payoff Club!!
Post by: Neustache on December 15, 2015, 06:16:13 AM
^Plainjane -

Well shit, now you make our celebration seem really selfish.  Ha!

We plan on taking our kids to Walt Disney World.  They know now that it's the plan once we pay off our mortgage, and my daughter asks about it on occasion (do we own our house yet?).  I want it to be something pretty memorable as I want them to remember the day it happens for a long time, and for them to think that it's just something you do, or a good thing to want to do.

We are also painting our front door red, as it's supposed to be a tradition to do that when a house is free and clear.  Not sure that's true, but I've always wanted a red door.
Title: Re: Mortgage Payoff Club!!
Post by: YoungGranny on December 15, 2015, 07:34:12 AM
4 digits.  Technically the remaining amortization is four months, but I'm aiming to be done in two.

I'm thinking of celebrating once we're done by donating the equivalent of a payment to the local food bank.  How are the rest of you planning to recognize the milestone?

That is SO awesome! I'm going to steal this and do something similar in 4 years :) I love the idea of being able to free up some of my money to donate to local charities.
Title: Re: Mortgage Payoff Club!!
Post by: bzzzt on December 15, 2015, 09:13:44 PM
Nailed it! Sent a payment over on Sunday to stick the last knife in the Mortgage.

Balance as of Dec 31st, 2014 was $78,940.

Today, it was $18.55! The lender wouldn't let me send over a payment over the last statement amount through the online service, so I'll have to call tomorrow to kill it.

A high savings rate + pulling some money out of the brokerage account has given me huge piece of mind. The project I've been working on for the last 3 years is ending in Feb/Mar, but no worries about the house at least!
Title: Re: Mortgage Payoff Club!!
Post by: Neustache on December 16, 2015, 06:40:10 AM
congrats,bzzzt!
Title: Re: Mortgage Payoff Club!!
Post by: Debts_of_Despair on December 16, 2015, 01:14:30 PM
Well other than a few dollars or cents of interest I will need to chase away tomorrow, I am done!!  The lump sum transferred in from savings on Monday and my paycheck provided the final death blow this morning. To summarize, I paid off 78k of principal in eight months. 52.6k off that was cash flowed and the rest came from savings.  Do not get me wrong, my wife and I make decent money but this still required some major dedication.  Discretionary spending was pretty much zero during this time.  I can probably count on a single hand the number of times we went out to eat, didn't do any vacationing, etc.

For the first time since being a "home owner" I am debt free!  Jan 2016 is the first month in over eight years that I don't owe anyone a house payment, car payment or student loan payment.  It is a damn good feeling and quite frankly will feel like I have a windfall coming in every month.  I never felt poor or anything and was still able to contribute quite a bit to retirement accounts but this is going to be like a whole new world for me.

Best of luck to all! It is easier that you think!

(http://s7.postimg.org/espbzzyu3/Untitled.png)
Title: Re: Mortgage Payoff Club!!
Post by: BBub on December 16, 2015, 02:23:10 PM
Wow.  Congratulations!

So... are you going to change your name?
Title: Re: Mortgage Payoff Club!!
Post by: jordanread on December 16, 2015, 03:03:41 PM
Wow.  Congratulations!

So... are you going to change your name?

Personally, I like the DOD acronym. But yeah.
Title: Re: Mortgage Payoff Club!!
Post by: BBub on December 17, 2015, 10:06:51 AM
Wow.  Congratulations!

So... are you going to change your name?

Personally, I like the DOD acronym. But yeah.

Yeah me too, but it doesn't seem applicable anymore. 

Coffers of Contentment?

Treasuries of Tranquility?

Title: Re: Mortgage Payoff Club!!
Post by: plainjane on December 17, 2015, 10:10:01 AM
Well other than a few dollars or cents of interest I will need to chase away tomorrow, I am done!! 

Those are some of the best kinds of graphs :)
Title: Re: Mortgage Payoff Club!!
Post by: steveo on December 17, 2015, 02:41:18 PM
Jan 2016 is the first month in over eight years that I don't owe anyone a house payment, car payment or student loan payment.

I'm going to join you. I'm not sure how long it is since we didn't have a debt payment however I'm 42 and we had a unit which we paid off but then we upgraded to a house. We've never really had a car loan or anything else but our house payments go away for good this January.
Title: Re: Mortgage Payoff Club!!
Post by: cheddarpie on December 17, 2015, 03:26:25 PM
Big milestone here! I just crossed the threshold where the amount of money I have in my savings/brokerage account is more than what I owe on my mortgage! Woohoo!!

I could cash everything out and pay it off for zero debt ... I'm not going to do that because it would gut my emergency fund and I'm going to have some financial turmoil in 2016 (major surgery + hoping to quit my job/find a better-but-likely-lesser-paying one), but it is SO GREAT knowing that I could. I will see how things go the next few months, keep saving as much as I can, and once I feel comfortable with the cushion I have will knock that baby out! I'm guessing/hoping for no later than mid-2017, hesitatingly assuming that the market stays up.

Title: Re: Mortgage Payoff Club!!
Post by: Debts_of_Despair on December 17, 2015, 04:42:56 PM
Wow.  Congratulations!

So... are you going to change your name?

Heh, it was really more tongue-in-cheek than anything.  I will however keep it as reminder to myself and others that debt really does suck.
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on December 17, 2015, 09:27:33 PM
CONGRATULATIONS to DoD and cheddarpie! That's one hell of a fine Christmas gift to give yourselves! Hope to join you in a couple years!!!
Title: Re: Mortgage Payoff Club!!
Post by: Money Badger on December 18, 2015, 09:46:23 PM
I have some *shocking* news to report!!   Banks suck.

Here's why...   the aforementioned recast of mortgage back in early November was so easy when I talked to my banker and wrote the big check.    The constant reassurances from the Customer Service person AND branch manager were "this is great, you're good and will receive the new balance and payment Jan 1. 

This week I receive the statement that says I paid a chunk on the mortgage but no recast on the payment!   So followed up with Customer "no" Service person again at the branch and there's a form they forgot to have my wife and I sign.   

And another tidbit...   We planned to do a HELOC but the closing costs of $500 and an ANNUAL fee of $50 for the line of credit were fairly amazingly expensive considering the higher interest rate on the loan.  None of these costs were stated up front, other than just a nice "rates are low and zero closing costs" sales pitch was all the loan officer and Manager gave in 2 visits.

Yes banks must earn a living, but at 3 or 4% interest, they are covered considering prime rate and leverage they are able to exercise structurally (loaning the same $ 4 or more times and collecting fees on selling bundled debt of all types).

Bottom line, never trust a banker to reduce the amount of blood you give them each month.   And cross check and verify the "pitch" against documents and T's & C's on the loan app and loan documents.   Financial vampires they are!!!
Title: Re: Mortgage Payoff Club!!
Post by: Neustache on December 19, 2015, 11:13:58 AM
^I'm sorry you had that experience.  I'll let you know when I do my recast if credit unions suck as well. 
Title: Re: Mortgage Payoff Club!!
Post by: Money Badger on December 20, 2015, 06:52:58 PM
Neustache,   Usually, the credit unions are better at following through as they're smaller and more coordinated.   I re-read my post after cooling off a couple of days and realized it was harsher that it should be and might discourage others.   The challenge with the large bank that has my mortgage is there are 3 different cities involved in finishing the transaction.   One at the branch, another at the mortgage "unit" of the bank, and a 3rd that actually handles the deeds.   Apparently 2 of 3 did their job first time.   I've been assured it's fixed with the 1 additional document.   Persistence pays off.  Good luck!!
Title: Re: Mortgage Payoff Club!!
Post by: steveo on December 23, 2015, 01:43:52 PM
I now owe $13,800. It won't be paid off this year but it should be paid off early January.

Today its $7,665.45. 3 more pays (per fortnight) to go.

Now its at $4,595. 2 more pays to go.

Now its $1,525. 1 more pay to go.
Title: Re: Mortgage Payoff Club!!
Post by: mies on December 23, 2015, 05:11:28 PM
I now owe $13,800. It won't be paid off this year but it should be paid off early January.

Today its $7,665.45. 3 more pays (per fortnight) to go.

Now its at $4,595. 2 more pays to go.

Now its $1,525. 1 more pay to go.

Nice work Steveo! I can't wait till that day arrives.
Title: Re: Mortgage Payoff Club!!
Post by: Money Badger on December 26, 2015, 07:12:37 AM
Go steveo, put a fork in it!!  Have you planned how you'll use the cash flow afterwards?    Drunken sailor binges every month?  Or max the retirement accounts?   Or somewhere in between?
Title: Re: Mortgage Payoff Club!!
Post by: steveo on December 26, 2015, 02:02:39 PM
Go steveo, put a fork in it!!  Have you planned how you'll use the cash flow afterwards?    Drunken sailor binges every month?  Or max the retirement accounts?   Or somewhere in between?

Investing in index funds and looking forward to FIRE. No increased spending but we will celebrate with oysters and champagne. I don't really drink champagne but we have a free bottle that I got from work. We will buy oysters.

We already have our funds listed that we will invest in each month.
Title: Re: Mortgage Payoff Club!!
Post by: frizzywhiskers on December 27, 2015, 12:42:00 PM
End of 2015 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

We are making some serious progress all while continuing to invest for retirement.  We are also considering a change in 2016 but it will depend on the housing market.  We are looking at downsizing yet again, but this time to a condo in order to pay off the mortgage quicker.  Very dependant on how much we can get for our house though - exciting times ahead!
Title: Re: Mortgage Payoff Club!!
Post by: mies on December 28, 2015, 07:11:14 AM
I didn't think we would be able to do it, but we paid off $41,000 in mortgage principal this year :) We went from a little over $110,000 to about 69,000. If we can keep this kind of progress going, we might be able to cut a year off our pay off date goal. My original goal was June 2018, but I might be able to get it done by June of 2017. Once we get the house paid off, I'll be able to increase my 401k contributions significantly and we can start to fix up some of the things around the house we have been postponing.
Title: Re: Mortgage Payoff Club!!
Post by: Bee21 on December 28, 2015, 03:02:15 PM
Ok, we are done!
Title: Re: Mortgage Payoff Club!!
Post by: Scubanewbie on December 28, 2015, 04:10:53 PM
$205K purchase price 9 years ago, refinanced twice to decrease interest rate/time-frame and wanting to pay it off so badly.  I know the math arguments against but I also think you work harder on the thing that bugs you most.  So, mortgage it is.  How soon can I do it?  Not sure.  Not sure DH or I are nearly as hardcore as most here but I'd love to continue to follow this thread to keep motivation high. 

Currently have $90K left (round numbers) and standard payments would have 9 more years.  Slightly increased payments (to keep payments to historical level) would bring that to eight and throwing the proverbial "extra paycheck" months would get close to 7 years.  Throwing one time work stock option bonus at it brings it to just over 6.  Without significant sacrifice I can't get it lower than that but hoping to get motivation to make those changes by hanging out here :)  If I can get it to 6 I'd have done a traditional 15 year mortgage payoff timeframe and if I can get it done in 5 I'll have it done before I turn 41. 
Title: Re: Mortgage Payoff Club!!
Post by: steveo on December 29, 2015, 12:09:49 AM
Ok, we are done!

Its completely gone ? If so - well done.
Title: Re: Mortgage Payoff Club!!
Post by: plainjane on January 01, 2016, 06:35:55 AM
End of the year update - turns out I put more into the mortgage as "lump sum" prepayments this year than I did on the regular payments.  This was pure laziness, it was just easier to snowball the mortgage with extra cash than it was to open up a taxable investment account, and I hadn't really registered just how much that was adding up to be.  oops

Regardless, we're now under 6k, and I'm going to run us at a cash flow deficit for the next 3 pays and give myself a bit of a b-day present.  _Then_ we'll open up that taxable account.  We aren't taking the optimal route from a mathematical perspective, but that doesn't mean this path won't get us there too.
Title: Re: Mortgage Payoff Club!!
Post by: rjbf65 on January 05, 2016, 12:54:59 PM
I'll join.

Started June 2014 at 71k.

It's currently $55k.  Goal is to finish it off by next June.   Have 20k in cash that would finish it off by then.  We are currently investing 15% as well.   Basically doing the Dave Ramsey plan.

Currently down to $51,500.  Hoping to get under $50K a month from today.

Down to $49660.  Was able to throw an extra $1555 at it this time.  Budgeting to be able to throw an extra $2500 next month.

$46,950 -- a $2,710 reduction this month.  October should be a little better with the magic of the 3 paychecks for me this month.  Should be under $40K by end of the year.

$41,843 -- a $5,107 reduction this month.  The 3rd paycheck was big this time.  Would love to be able to do that every month!  My goal for end of November is to get under 40K.  Once I'm at the $40K mark, I'll have about equal amounts of cash in the bank and mortgage balance.  Still also maxing out 2 Roth IRA's which speaks for $917 per month.  It is always tempting to stop the Roth or to throw a bunch of the available cash at it.  I think I'll just stay the course of throwing all the extra cash that was left over after the month at it.  Once the mortgage is gone, all towards investing.


$38,922 -- $2,921 reduction this month.  More travel and eating out this month, as well as property taxes and insurance slowed us down a bit.  But we are at the goal of being under $40K balance!  It's going down at a pretty good pace that I'm happy with!  We will have some Christmas expenses coming up this month but it shouldn't be all that bad.  My target is to hope to be under $37K at the end of December.

$35,898 -- $3,024 reduction this month.  Received a small bonus from work to more or less cancel out Christmas spending.  Also had to replace the wife's windshield.  Would love to be down to under $33K after January is up.  Have quite a few things on the horizon.  We are expecting our first child in late May.  With that we are planning on upgrading the vehicle fleet some.  While going from 3 vehicles to 2.  Just looking for more room and reliability.  Need to have the ability of hauling a child, 2 dogs, and luggage for trips to see our parents.  We have been on the mustachian side of things when it comes to vehicles.  Our 3 vehicles combined might be worth about 9 or 10K.  My goal is to have a paid for house as well as having atleast 1 newer vehicle also paid for by the time the baby arrives.  We are now at the position of having more cash than mortgage balance.  Really looking forward to knocking it out asap!  Another thing about having it paid off by the end of May is I'll finally be eligible to contribute to my 401K starting in July.  Would be wonderful to max out a 401K in just the remaining half of the year!
Title: Re: Mortgage Payoff Club!!
Post by: asauer on January 06, 2016, 06:17:17 AM
Able to throw another chunk at the mortgage in December.  Down to 88,888.  I planned it to be all 8s b/c I'm a nerd and am easily entertained.  We started at 230k in Sept 2013- hoping to payoff at the end of this year!
Title: Re: Mortgage Payoff Club!!
Post by: steveo on January 06, 2016, 01:44:48 PM
My mortgage is now done. All I have to do is close the account down. I have $10 credit. Freaken great.
Title: Re: Mortgage Payoff Club!!
Post by: Josiecat on January 06, 2016, 03:02:14 PM
Steveo - So very happy for you!
Title: Re: Mortgage Payoff Club!!
Post by: Clean Shaven on January 06, 2016, 03:06:39 PM
I'm waiting for January's monthly payment to process (tomorrow), then will request the loan payoff demand, and write one final check!

This will be the first time I am 100% debt-free since early college days, or maybe high school. 
Title: Re: Mortgage Payoff Club!!
Post by: steveo on January 06, 2016, 06:56:55 PM
Steveo - So very happy for you!

Thank You. Its a pretty big thing for us. I feel we now have a lot more money to throw into growing our wealth and FIRE assets plus we don't have any debt now which means we should basically have a roof over our heads for life.
Title: Re: Mortgage Payoff Club!!
Post by: nnls on January 06, 2016, 06:58:06 PM
I'm waiting for January's monthly payment to process (tomorrow), then will request the loan payoff demand, and write one final check!

This will be the first time I am 100% debt-free since early college days, or maybe high school.

Congratulations!
Title: Re: Mortgage Payoff Club!!
Post by: Clean Shaven on January 07, 2016, 07:22:31 AM
Thanks! I posted about it because I feel like telling someone, and anonymous Internet forum members seems to be about the only people my wife and I can tell.

Seems like it shouldn't be this way, but telling coworkers "I'm happy, we paid off this huge debt in a few short years by carefully saving and not wasting money" wouldn't go over well. OTOH, "hey check out my new $50k car, payments are only $600/mo for the next 5 years" would go over just fine. Spendy pants logic, I guess.
Title: Re: Mortgage Payoff Club!!
Post by: asauer on January 07, 2016, 07:36:33 AM
My mortgage is now done. All I have to do is close the account down. I have $10 credit. Freaken great.
Wonderful news!!! Congratulations!
Title: Re: Mortgage Payoff Club!!
Post by: freeatlast on January 07, 2016, 10:34:38 AM
I need an incentive to stay in a job that is wearing on me, so I have chosen to pay down the mortgage even though I have a favorable rate of 3.625% on a 30 year.  I know the debate on this.... but I need a goal and there are worse things I could do with the money :)

I live in a high cost of living area so my house even in the "bad" part of town had a starting mortgage of 262k. I got that down to $200k as of Jan. 1 (3 1/2 years). Now I am getting serious. So I made a chart that takes me from $200,000 to $100,000 in 2016 and I mark on it every time I make a payment. Down to $197k! This chart is in my home office and it is a reminder of why I am doing what I am doing! This is a lofty goal and I am not sure I can make it.  I may sell some useless stuff I don't use to try to get there....

Love this thread - good luck to everyone and happy 2016!
Title: Re: Mortgage Payoff Club!!
Post by: Debts_of_Despair on January 07, 2016, 11:41:27 AM
Thanks! I posted about it because I feel like telling someone, and anonymous Internet forum members seems to be about the only people my wife and I can tell.

Seems like it shouldn't be this way, but telling coworkers "I'm happy, we paid off this huge debt in a few short years by carefully saving and not wasting money" wouldn't go over well. OTOH, "hey check out my new $50k car, payments are only $600/mo for the next 5 years" would go over just fine. Spendy pants logic, I guess.

You really are best keeping it to yourself.  It only serves to make most people feel bad/dumb.  There are only a very few like minded people who I told.
Title: Re: Mortgage Payoff Club!!
Post by: Scubanewbie on January 07, 2016, 03:14:58 PM
I need an incentive to stay in a job that is wearing on me, so I have chosen to pay down the mortgage even though I have a favorable rate of 3.625% on a 30 year.  I know the debate on this.... but I need a goal and there are worse things I could do with the money :)

I live in a high cost of living area so my house even in the "bad" part of town had a starting mortgage of 262k. I got that down to $200k as of Jan. 1 (3 1/2 years). Now I am getting serious. So I made a chart that takes me from $200,000 to $100,000 in 2016 and I mark on it every time I make a payment. Down to $197k! This chart is in my home office and it is a reminder of why I am doing what I am doing! This is a lofty goal and I am not sure I can make it.  I may sell some useless stuff I don't use to try to get there....

Love this thread - good luck to everyone and happy 2016!

Great goal!  I agree that the things that motivate us are the best to work on.  $100K in one year, wow, you're my hero! :)  Not to be a downer but I'm assuming you're planning to do *some* retirement investing simultaneously?  Enough to get to match?  Enough to max out tax advantaged accounts?  With that kind of income the risk of waiting too long can be pretty serious.

We're taking a longer term goal, I'd love to be done in 5 years.  But I'm in awe of those with super-short timeframes, it's so exciting and I'd be happy to cheer you on!
Title: Re: Mortgage Payoff Club!!
Post by: steveo on January 07, 2016, 11:13:07 PM
My payout went smoothly but it was interesting. Firstly the money was rejected because it was pushing my account into credit. I rang up and they said write a letter to close the account because there is a massive amount in redraw. I transferred the money back into the home loan and paid it to 0 to avoid any interest. I checked it today and that payment had been rejected. I called up today and said I wanted to close it and they just closed it.

It was sweet.
Title: Re: Mortgage Payoff Club!!
Post by: Bee21 on January 08, 2016, 03:54:57 AM
Congrats.

Just wondering, what is happening with the property deeds in your side of the woods? How do you remove the bank from it? It is complicated/expensive over there?

We paid off the damn thing but the final paperwork is not organized because the lovely husband does not feel like dealing with lawyers and paperwork right now. I know, no comments on this one.
Title: Re: Mortgage Payoff Club!!
Post by: Neustache on January 08, 2016, 05:40:06 AM
@Bee21
I used to work at a title company, and the Deed of Release would be recorded at the courthouse when a mortgage was satisfied.  Sometimes the owner of the property would receive it and need to file it (for a small fee) but sometimes the bank would send it directly to the courthouse to be filed and the owner would received it afterwards with the recording information stamped on it.

At least in our world, (mid-US) attorneys don't factor into it at all. 
Title: Re: Mortgage Payoff Club!!
Post by: Bee21 on January 08, 2016, 01:14:16 PM
Thanks for that. We are in Australia, and the husband allegedly did his research on this. I am just kicking myself for not going with him to the bank when he closed the account as we could have organized it there and then. I will pop in the bank in my lunchtime next week and collect the necessary paperwork, lawyer up if necessary and drag him along. The little darling needs a bit of a push on financial matters unfortunately. He always admits that I was right afterwards :) like this house payoff thing. 3 years ago he said I was delusional.
Title: Re: Mortgage Payoff Club!!
Post by: steveo on January 08, 2016, 02:14:14 PM
Thanks for that. We are in Australia, and the husband allegedly did his research on this. I am just kicking myself for not going with him to the bank when he closed the account as we could have organized it there and then. I will pop in the bank in my lunchtime next week and collect the necessary paperwork, lawyer up if necessary and drag him along. The little darling needs a bit of a push on financial matters unfortunately. He always admits that I was right afterwards :) like this house payoff thing. 3 years ago he said I was delusional.

Bee - I am Australian. I didn't discharge the mortgage as we have a line of credit with 50k. We don't owe anything on that and intend to use it as an emergency fund if it is required.

It should be really easy though to discharge the mortgage. The bank I am with thought that was what we wanted and sent us a form. I expect that is all you have to do. There will probably be a small fee.
Title: Re: Mortgage Payoff Club!!
Post by: Money Badger on January 10, 2016, 08:59:49 AM
Bee21, Of course, you'll make the trip to the bank "his" idea and praise him like your first born taking his first steps right?  :)
Title: Re: Mortgage Payoff Club!!
Post by: ozbeach on January 12, 2016, 03:19:46 PM
Thanks for that. We are in Australia, and the husband allegedly did his research on this. I am just kicking myself for not going with him to the bank when he closed the account as we could have organized it there and then. I will pop in the bank in my lunchtime next week and collect the necessary paperwork, lawyer up if necessary and drag him along. The little darling needs a bit of a push on financial matters unfortunately. He always admits that I was right afterwards :) like this house payoff thing. 3 years ago he said I was delusional.

Bee - I am Australian. I didn't discharge the mortgage as we have a line of credit with 50k. We don't owe anything on that and intend to use it as an emergency fund if it is required.

It should be really easy though to discharge the mortgage. The bank I am with thought that was what we wanted and sent us a form. I expect that is all you have to do. There will probably be a small fee.

Another Australian here that hasn't discharged my mortgage. I run a zero balance, and have an 80% of equity line of credit on the mortgage (I guess I might need to buy a Ferrari in an emergency one day?) There are no fees on this account other than the interest on any outstanding balance.

I understand, though haven't done a huge amount of research into it, that there are some bank fees involved in discharging, and that you then receive the title deeds. At which point you then have to store them somewhere safe, potentially incurring fees if you put them in a bank safe deposit box.
Title: Re: Mortgage Payoff Club!!
Post by: freeatlast on January 13, 2016, 12:56:50 AM
I need an incentive to stay in a job that is wearing on me, so I have chosen to pay down the mortgage even though I have a favorable rate of 3.625% on a 30 year.  I know the debate on this.... but I need a goal and there are worse things I could do with the money :)

I live in a high cost of living area so my house even in the "bad" part of town had a starting mortgage of 262k. I got that down to $200k as of Jan. 1 (3 1/2 years). Now I am getting serious. So I made a chart that takes me from $200,000 to $100,000 in 2016 and I mark on it every time I make a payment. Down to $197k! This chart is in my home office and it is a reminder of why I am doing what I am doing! This is a lofty goal and I am not sure I can make it.  I may sell some useless stuff I don't use to try to get there....

Love this thread - good luck to everyone and happy 2016!

Great goal!  I agree that the things that motivate us are the best to work on.  $100K in one year, wow, you're my hero! :)  Not to be a downer but I'm assuming you're planning to do *some* retirement investing simultaneously?  Enough to get to match?  Enough to max out tax advantaged accounts?  With that kind of income the risk of waiting too long can be pretty serious.

We're taking a longer term goal, I'd love to be done in 5 years.  But I'm in awe of those with super-short timeframes, it's so exciting and I'd be happy to cheer you on!


Thanks Scub! I read your post and you are kicking it too! I'll be down to $194k by end of January. My goal may be aggressive but I am going to see how well I can do. I am older than you (47) and I feel like I am buying freedom on behalf of my older self. I don't want to be paying the mortgage when I am 70 - which would have happened if I did not repay early. I am investing enough in the 401(k) to cover the match, but I never seem to do well in the market...
Title: Re: Mortgage Payoff Club!!
Post by: Bee21 on January 13, 2016, 02:27:10 AM
Thanks for the replies guys. Anyone has any idea how much does storing the deeds cost? Lawyers/banks/safe?

I am really keen having it discharged, as he is now researching yachts :D

I definitely don't want a line of credit.
Title: Re: Mortgage Payoff Club!!
Post by: birdman2003 on January 13, 2016, 12:16:45 PM
You should be able to rent a safety deposit box at a bank for $50 a year.
Title: Re: Mortgage Payoff Club!!
Post by: dogboyslim on January 13, 2016, 12:39:52 PM
Happy to find this thread.  I know that strictly from a return perspective I'm better off investing than paying off the mortgage, but the reduction in required cash flow is very appealing to me, and knowing I have no debt at all other than revolving accounts that are paid off each month is an emotional gain for both my wife and I.  We moved a few years ago, so our original mortgage was 280k.  We put down the min on our house until we sold our prior home.  Once that house sold, we kept the money under the invest it philosophy, but both my wife and I were thinking we should just pay it down.  Last December we refinanced to a 10 year fixed HELOC at $99k using the proceeds from the prior home sale.  In 2015 we decided that the two of us didn't need 3 cars, so we sold our newest car and put another 25k into the mortgage.  Right now we sit at $34k $32k.  I ended up overwitholding my taxes last year after messing up the prior year due to the move, so we expect to have about $10k in state/federal refund, and we are paying down about $2k per month.  My office did well last year so I'm hoping for a bit of a discretionary bonus (they have done it in other years).  If that happens, we could be mortgage free by May.  Otherwise, December 2016 will be our last payment.

Edit: down to $32k after January pmt
Title: Re: Mortgage Payoff Club!!
Post by: Money Badger on January 13, 2016, 06:12:28 PM
@dogboyslim,   Great progress and very creative!   The margin of safety every month of your life from having a paid off home and the sense of "completion" brings a sense of confidence every day that's hard to describe... 

We're actually rolling coins, selling junk we never use otherwise and putting every bit of spare cash towards ours (after putting money towards some maintenance and education expenses we'd otherwise have to borrow to cover).    So will scratch together almost another 1% extra principal payment this month on our $109K balance this month despite my plan to hold off on mortgage pay downs for a bit. 

So beware, once you start, it will consume your destiny until it's complete (especially the closer you get)...  and that's a good thing!
Title: Re: Mortgage Payoff Club!!
Post by: steveo on January 13, 2016, 07:03:08 PM
Thanks for the replies guys. Anyone has any idea how much does storing the deeds cost? Lawyers/banks/safe?

I am really keen having it discharged, as he is now researching yachts :D

I definitely don't want a line of credit.

Why not just store it at home. Its just some papers.
Title: Re: Mortgage Payoff Club!!
Post by: Debts_of_Despair on January 16, 2016, 10:02:46 AM
It's officially official now for me.  The discharge showed up on the county clerk's website and the bank was removed as a lien holder on my insurance.  About a month long process from the time the final payment was made.
Title: Re: Mortgage Payoff Club!!
Post by: RNwastash on January 16, 2016, 02:46:54 PM
$119,872 to date.  I so want to pay off my mortgage so I can go down to part time status.  Great job everyone and a wonderful, closer to debt-free year to all of you :)
Title: Re: Mortgage Payoff Club!!
Post by: serious_pete on January 19, 2016, 09:52:43 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 right now mortgage is at £105, 082.
Title: Re: Mortgage Payoff Club!!
Post by: BBub on January 19, 2016, 11:15:11 AM
It's officially official now for me.  The discharge showed up on the county clerk's website and the bank was removed as a lien holder on my insurance.  About a month long process from the time the final payment was made.

That's awesome DoD.  How does it feel - Relief, excitement, happiness, calmness?  Does the feeling of being debt free live up to your expectations, or did it just kind of feel like another milestone?
Title: Re: Mortgage Payoff Club!!
Post by: mustangchik83 on January 19, 2016, 11:45:11 AM
I've been following MMM for a few years now, but haven't been active in the forum.  However, last week my husband and I finally sold off a previous house that had become a no-better-than-break-even rental during a bad housing market.  The proceeds from that sale, plus a little extra bonus money will pay off our current home later this week. We are giddy with excitement at the prospect of being debt-free at 32, but unfortunately, most of our family and friends are busy living typical American lives and wouldn't be thrilled to hear our news.  So, I came here to celebrate quietly with like-minded people.  :)

To all those still striving to get to zero - keep up the good work!
Title: Re: Mortgage Payoff Club!!
Post by: Debts_of_Despair on January 19, 2016, 02:55:38 PM
It's officially official now for me.  The discharge showed up on the county clerk's website and the bank was removed as a lien holder on my insurance.  About a month long process from the time the final payment was made.

That's awesome DoD.  How does it feel - Relief, excitement, happiness, calmness?  Does the feeling of being debt free live up to your expectations, or did it just kind of feel like another milestone?

To be completely honest, pretty lackluster.  All the money that would've previously went to the mortgage will go a 457b so it's not like there is any kind of windfall. I guess the only immediate benefit is knowing that if some kind of catastrophe strikes, the house is mine no matter what.  That does bring some peace on a daily basis.
Title: Re: Mortgage Payoff Club!!
Post by: steveo on January 19, 2016, 11:50:24 PM
It's officially official now for me.  The discharge showed up on the county clerk's website and the bank was removed as a lien holder on my insurance.  About a month long process from the time the final payment was made.

That's awesome DoD.  How does it feel - Relief, excitement, happiness, calmness?  Does the feeling of being debt free live up to your expectations, or did it just kind of feel like another milestone?

I feel the same way. Now I'm starting to save more to reach FI.

To be completely honest, pretty lackluster.  All the money that would've previously went to the mortgage will go a 457b so it's not like there is any kind of windfall. I guess the only immediate benefit is knowing that if some kind of catastrophe strikes, the house is mine no matter what.  That does bring some peace on a daily basis.
Title: Re: Mortgage Payoff Club!!
Post by: bzzzt on January 20, 2016, 08:38:00 PM
I guess the only immediate benefit is knowing that if some kind of catastrophe strikes, the house is mine no matter what.  That does bring some peace on a daily basis.

Agreed. It also gives me the ability to look at the market on down days and not feel total despair.

Indexes down 2% today? IDGAF. Burn baby burn! Daddy wants to buy low! ;)
Title: Re: Mortgage Payoff Club!!
Post by: Debts_of_Despair on January 21, 2016, 08:06:08 AM
Quote from: bzzzt [/quote

Agreed. It also gives me the ability to look at the market on down days and not feel total despair.

Indexes down 2% today? IDGAF. Burn baby burn! Daddy wants to buy low! ;)
Oh yeah!  I'm not one to time the markets but it feels pretty damn good to have poured all my money into the house when markets were peaking and now shift my focus to investing while prices are going   down.
Title: Re: Mortgage Payoff Club!!
Post by: YoungGranny on January 22, 2016, 08:11:40 AM
Refinance is complete! Mortgage balance is $131,500. Decided my goal will be to get it under $100k in 1 year. Hopefully completely paid off in 5 years or less but I think I need a short-term goal to focus on for motivation.

Sent a chunk of money at it again this month, down to $129,532



Haven't updated in a bit... balance is sitting at $120,485 - I'm taking a blended approach to paying off the mortgage while still investing. Feels good to have one number moving in the right direction since my investments are not doing so hot this month. Extra large payment on the mortgage this month since it was bonus time.....if only I could do that every month haha.
Title: Re: Mortgage Payoff Club!!
Post by: Mermaid3011 on January 22, 2016, 05:45:25 PM
It's officially official now for me.  The discharge showed up on the county clerk's website and the bank was removed as a lien holder on my insurance.  About a month long process from the time the final payment was made.

Congratulations!!! What a wonderful success to celebrate!
Title: Re: Mortgage Payoff Club!!
Post by: Money Badger on January 22, 2016, 08:14:12 PM
This sounds sad at first, then you have to embrace the mindset...  I've saved $125 in coins since Thanksgiving to go towards the mortgage.   That's 1% to my freedom!!!!
Title: Re: Mortgage Payoff Club!!
Post by: Mermaid3011 on January 23, 2016, 11:28:51 AM
This sounds sad at first, then you have to embrace the mindset...  I've saved $125 in coins since Thanksgiving to go towards the mortgage.   That's 1% to my freedom!!!!

That's awesome! Not sad at all! I've been thinking of going to the bank today as well and putting my change from the big cookie jar towards my mortgage!
Title: Re: Mortgage Payoff Club!!
Post by: Heckler on January 24, 2016, 09:43:32 AM
Quote
I've been footin' the bill for some time
Stretchin' my credit out of line
Well I may not get ahead but now I won't be far behind
I've got one more payment and it's mine, we're gonna swing it

Ain't that the way the heart goes
Seems they just attack without a sign
My mind's been on vacation
And my body's been workin' overtime
But I've done all that I can do
There's just one more balance due before it's mine

I've been footin' the bill for some time
Step by step and line by dotted line
Well I haven't bought the farm yet but I'm not that far behind
I've got one more payment and it's mine

One more payment and it's mine
One more payment and it's mine
One more, one more, one more, Lord


Read more: Clint Black - One More Payment Lyrics | MetroLyrics



In 2003, we bought our place in North Vancouver, BC.  Paid $275,000 for a three bed townhouse with enough space to store all our shit.  Mortgaged about $255,000 for a twenty year amortization. 

I knew nothing about money, interest, or savings rate other than I put 5 % away into my employer matched RSP, and spent the rest.  Luckily my lovely wife increased the mortgage payments any chance she could.  Payed biweekly, increasing over the years, plus bonuses went onto the mortgage. Figure we could sell it for $580,000+ now! but the best part, only 13 years later is...


ONE MORE PAYMENT AND ITS OURS!
Title: Re: Mortgage Payoff Club!!
Post by: Mermaid3011 on January 24, 2016, 09:50:35 AM
Quote
I've been footin' the bill for some time
Stretchin' my credit out of line
Well I may not get ahead but now I won't be far behind
I've got one more payment and it's mine, we're gonna swing it

Ain't that the way the heart goes
Seems they just attack without a sign
My mind's been on vacation
And my body's been workin' overtime
But I've done all that I can do
There's just one more balance due before it's mine

I've been footin' the bill for some time
Step by step and line by dotted line
Well I haven't bought the farm yet but I'm not that far behind
I've got one more payment and it's mine

One more payment and it's mine
One more payment and it's mine
One more, one more, one more, Lord


Read more: Clint Black - One More Payment Lyrics | MetroLyrics



In 2003, we bought our place in North Vancouver, BC.  Paid $275,000 for a three bed townhouse with enough space to store all our shit.  Mortgaged about $255,000 for a twenty year amortization. 

I knew nothing about money, interest, or savings rate other than I put 5 % away into my employer matched RSP, and spent the rest.  Luckily my lovely wife increased the mortgage payments any chance she could.  Payed biweekly, increasing over the years, plus bonuses went onto the mortgage. Figure we could sell it for $580,000+ now! but the best part, only 13 years later is...


ONE MORE PAYMENT AND ITS OURS!

Congratulations!! That's fabulous! and what a great area you picked!!
i just started 1.5 yrs ago with a 260k mortgage. My plan is to be done in 11 yrs, so pretty much same timeline as yours. Can't wait! :)
Again: well done and happy FIRE
Title: Re: Mortgage Payoff Club!!
Post by: rjbf65 on February 02, 2016, 07:13:18 AM
I'll join.

Started June 2014 at 71k.

It's currently $55k.  Goal is to finish it off by next June.   Have 20k in cash that would finish it off by then.  We are currently investing 15% as well.   Basically doing the Dave Ramsey plan.

Currently down to $51,500.  Hoping to get under $50K a month from today.

Down to $49660.  Was able to throw an extra $1555 at it this time.  Budgeting to be able to throw an extra $2500 next month.

$46,950 -- a $2,710 reduction this month.  October should be a little better with the magic of the 3 paychecks for me this month.  Should be under $40K by end of the year.

$41,843 -- a $5,107 reduction this month.  The 3rd paycheck was big this time.  Would love to be able to do that every month!  My goal for end of November is to get under 40K.  Once I'm at the $40K mark, I'll have about equal amounts of cash in the bank and mortgage balance.  Still also maxing out 2 Roth IRA's which speaks for $917 per month.  It is always tempting to stop the Roth or to throw a bunch of the available cash at it.  I think I'll just stay the course of throwing all the extra cash that was left over after the month at it.  Once the mortgage is gone, all towards investing.


$38,922 -- $2,921 reduction this month.  More travel and eating out this month, as well as property taxes and insurance slowed us down a bit.  But we are at the goal of being under $40K balance!  It's going down at a pretty good pace that I'm happy with!  We will have some Christmas expenses coming up this month but it shouldn't be all that bad.  My target is to hope to be under $37K at the end of December.

$35,898 -- $3,024 reduction this month.  Received a small bonus from work to more or less cancel out Christmas spending.  Also had to replace the wife's windshield.  Would love to be down to under $33K after January is up.  Have quite a few things on the horizon.  We are expecting our first child in late May.  With that we are planning on upgrading the vehicle fleet some.  While going from 3 vehicles to 2.  Just looking for more room and reliability.  Need to have the ability of hauling a child, 2 dogs, and luggage for trips to see our parents.  We have been on the mustachian side of things when it comes to vehicles.  Our 3 vehicles combined might be worth about 9 or 10K.  My goal is to have a paid for house as well as having atleast 1 newer vehicle also paid for by the time the baby arrives.  We are now at the position of having more cash than mortgage balance.  Really looking forward to knocking it out asap!  Another thing about having it paid off by the end of May is I'll finally be eligible to contribute to my 401K starting in July.  Would be wonderful to max out a 401K in just the remaining half of the year!

$32,026 -- a $3,872 reduction this month.  I always have to wait until the 5th or 6th of each month to process my extra payment.  I'm one of those weird ones that pay things as soon as I get the notice instead of holding on to the money for as long as possible.  If all goes well February and March have the potential to be good debt reduction months.  Tax refund in February hopefully and a 3 paycheck month in March.  We will be doing some vehicle upgrading with a new baby on the way but I will do everything I can to keep that cost to a minimum. 
Title: Re: Mortgage Payoff Club!!
Post by: Mermaid3011 on February 03, 2016, 09:48:25 AM
Here are my stats

Condo (downtown Toronto) bought for $308,000 in July 2014
(value around 340k now after complete renovation)
started out w mortgage: $240k
as of Feb 1, 2016 - 205k

goal for 2016 - 198k
goal for 2017 - 180k
goal for 2018 - 162k
goal for 2019 - 142k
goal for 2020 - 118k
goal for 2021 - 95k
goal for 2022 - 70k
goal for 2023 - 43k
goal for 2024 - 11k
last payment hopefully in March 2025


That's a very long 9 yrs to go... sigh.
Title: Re: Mortgage Payoff Club!!
Post by: HenryDavid on February 03, 2016, 10:03:39 AM
$3600 to go, six more biweekly payments, done in April.

Originally a 25 year mortgage, paid in 14 years, and we even took a few brief payment holidays while travelling . . .
and added a new roof and a coupla renos along the way. While earning around the median income for our town at the start, 30% above now. In other words, no magically gigantic cash flow.

Thank you low floating interest rates and amped-up payments. (And initial moderate price of course.)
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on February 03, 2016, 08:35:50 PM
Another Mortgage Paydown Fan checking in. We broke $100k on the mortgage principal owed. Today it's $98,519.67.

Info: The mortgage company said they will do ONE "recasting" of the loan over the lifetime of the loan for $300. It's a bargain compared to refi, for someone who's planning to pay down the mortgage principal anyway.

http://www.moneycrashers.com/recasting-mortgage-loan/
Title: Re: Mortgage Payoff Club!!
Post by: plainjane on February 04, 2016, 06:37:51 AM
goal for 2024 - 11k
last payment hopefully in March 2025
That's a very long 9 yrs to go... sigh.

By the time you're under 40k, you'll be finding $100 here and there, and you can choose whether to snowball against the mortgage or put against FI.  It can go so much faster than you think.

We just finished in 9.5 years.  It is Schrodinger's mortgage no more.  The money is out of the chequing account and the mortgage no longer slows up when I log into the other bank. I suppose it doesn't _really_ count until we get the discharge papers, but I'm going to put a checkmark there now as complete.

Today we're celebrating (also, a birthday) by getting takeout pizza.
Title: Re: Mortgage Payoff Club!!
Post by: Debts_of_Despair on February 04, 2016, 10:08:56 AM
goal for 2024 - 11k
last payment hopefully in March 2025
That's a very long 9 yrs to go... sigh.

By the time you're under 40k, you'll be finding $100 here and there, and you can choose whether to snowball against the mortgage or put against FI.  It can go so much faster than you think.

We just finished in 9.5 years.  It is Schrodinger's mortgage no more.  The money is out of the chequing account and the mortgage no longer slows up when I log into the other bank. I suppose it doesn't _really_ count until we get the discharge papers, but I'm going to put a checkmark there now as complete.

Today we're celebrating (also, a birthday) by getting takeout pizza.

I felt like 40k is the point where you can really start putting a hurtin on your mortgage.  Interest is almost not a factor and all the little sums of money you can throw at it really start to add up.
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on February 04, 2016, 06:50:44 PM
goal for 2024 - 11k
last payment hopefully in March 2025
That's a very long 9 yrs to go... sigh.

By the time you're under 40k, you'll be finding $100 here and there, and you can choose whether to snowball against the mortgage or put against FI.  It can go so much faster than you think.

We just finished in 9.5 years.  It is Schrodinger's mortgage no more.  The money is out of the chequing account and the mortgage no longer slows up when I log into the other bank. I suppose it doesn't _really_ count until we get the discharge papers, but I'm going to put a checkmark there now as complete.

Today we're celebrating (also, a birthday) by getting takeout pizza.

I felt like 40k is the point where you can really start putting a hurtin on your mortgage.  Interest is almost not a factor and all the little sums of money you can throw at it really start to add up.

You get at least halfway down the curve and every payment is a very high percentage of mortgage abatement, so each payment makes an ever-more-visible dent in the remaining principal.

We're only halfway through our principal but we've gone from seeing each monthly payment go from 47% principal to currently 82% principal.  (exclusive of insurance and escrow, which are constants and independent of the loan). So now, every single mortgage payment makes a bigger and bigger difference to cutting the principal.
Title: Re: Mortgage Payoff Club!!
Post by: Mermaid3011 on February 05, 2016, 07:34:27 AM
goal for 2024 - 11k
last payment hopefully in March 2025
That's a very long 9 yrs to go... sigh.

By the time you're under 40k, you'll be finding $100 here and there, and you can choose whether to snowball against the mortgage or put against FI.  It can go so much faster than you think.

We just finished in 9.5 years.  It is Schrodinger's mortgage no more.  The money is out of the chequing account and the mortgage no longer slows up when I log into the other bank. I suppose it doesn't _really_ count until we get the discharge papers, but I'm going to put a checkmark there now as complete.

Today we're celebrating (also, a birthday) by getting takeout pizza.

Thanks for the encouragement! Yes! I'll throw everything possible against it to get rid of it sooner.

CONGRATULATIONS to you both! And happy birthday! What a WONDERFUL success and accomplishment!
You should be very very proud of yourself!
Title: Re: Mortgage Payoff Club!!
Post by: Mermaid3011 on February 05, 2016, 07:42:46 AM
Thank you Faraday and Debts_of_Despair!

It sure is fabulous to look at the amortization spreadsheet and see how quickly it goes down once I am raising my monthly mortgage payments. This year is still debt payback, but next year my monthly mortgage payments will go up from $1120 to $1800. That'll make a big difference in getting the principal down.

My next refinancing is due mid 2019, so in 3 yrs 5 months. I wonder where interest will be then. right now I am calculating with 6% (instead of 2.99% right now).

Do you think that is a decent assumption? Mortgage rates around 6% in 2019?

Considering the current low interest environment I can't really see interest rates going up more than 1% per year...
Title: Re: Mortgage Payoff Club!!
Post by: Heckler on February 05, 2016, 09:50:08 AM
Today is (better be!) the day!

I'm staring at the checking account, waiting for that final payment to come out.  Haven't heard a word from Mortco. about The End, but my calculations in relation to the balance 6 weeks ago says this final payment will be $200 less than normal. 

Then I have to crack the bottle of Muscato DAsti and drink it all myself, because on Monday my infertile wife of 20 years was told she shouldn't drink alcohol for at least the next three months!  It's been an exciting and confusing week!

Thank goodness for the three bedrooms!  Our friend who is a real estate developer suggested we buy the larger fixer upper instead of the smaller well decorated unit for the same price.  You can repaint, but it's impossible to add sqft. to a strata.    Now...  Which room has to go, the craft/sewing room or the spare bedroom for visitors from Ontario?
Title: Re: Mortgage Payoff Club!!
Post by: Mermaid3011 on February 05, 2016, 11:17:12 AM
Today is (better be!) the day!

I'm staring at the checking account, waiting for that final payment to come out.  Haven't heard a word from Mortco. about The End, but my calculations in relation to the balance 6 weeks ago says this final payment will be $200 less than normal. 

Then I have to crack the bottle of Muscato DAsti and drink it all myself, because on Monday my infertile wife of 20 years was told she shouldn't drink alcohol for at least the next three months!  It's been an exciting and confusing week!

Thank goodness for the three bedrooms!  Our friend who is a real estate developer suggested we buy the larger fixer upper instead of the smaller well decorated unit for the same price.  You can repaint, but it's impossible to add sqft. to a strata.    Now...  Which room has to go, the craft/sewing room or the spare bedroom for visitors from Ontario?


OMG Congratulations on becoming a DAD!!! And how awesome the timing is - it's supposed to be this way!

I would theoretically qualify as visitor from Ontario, but still suggest that room goes! As a knitter and crafter I think the hobby room will be VERY important in the next years to find some peace and quiet time...
Title: Re: Mortgage Payoff Club!!
Post by: Heckler on February 05, 2016, 12:15:12 PM
Whoa, heavy shit when you put that in CAPS.
Title: Re: Mortgage Payoff Club!!
Post by: pdxmonkey on February 05, 2016, 08:55:56 PM
I've been working at my mortgage for a while now. I originally had a 30 yr $146000 loan. In 2012 I refinanced into a 15 yr @ 2.875%. As of today I have about $67,500 remaining.

I flip flop between investing more and paying off the mortgage. I have been maxing out my contributions to a Roth IRA since my mid 20's and last year I maxed out my 401k (Roth) for the first time and will be doing so again this year. I had always considered retiring early, but have only recently considered retiring extremely early and finally about 2 months ago opened up a taxable investment account in addition to my 401k and IRA accounts as I'll need money outside those accounts to live on. I've put some money into this and started paying the mortgage down less aggressively although still more than the minimum payment. I really want to get it paid off even though mathematically it is not necessarily the best idea. If P/E ratio goes lower on the market I will probably not pay any extra on the mortgage.

Down to $60k as of tomorrow. I threw some dry powder at it as the S&P 500 is still near all time highs and I feel like I'm dollar cost averaging in enough per month right now. Flows out of my bank savings account into the market + my recent mortgage payments are greater than my current income so doing both isn't sustainable long term. I will probably have to slow down the mortgage payoff next year some time OR work more to keep paying it down quickly. $60k seems really close to being done, but calendar wise there is a good distance to go.

Jan. 2015 - ~100k
Oct. 2015 - ~$67500
Dec.3, 2015 - ~$60k
Feb. 5, 2015 - $52,108.53

Not allowed to contribute to a Roth IRA this year. I don't like the current market prospects enough to put the whole $5500 I was going to put into the Roth for 2015 into a taxable account so I used some of it on the mortgage. It's exciting to see my balance go down so quickly since the beginning of 2015, but disappointing to know this rate is no longer sustainable long term now that late last year I started investing in a taxable account as well. Because...the math.
Title: Re: Mortgage Payoff Club!!
Post by: asauer on February 09, 2016, 06:18:59 AM
Dropped it another 3k this month.  Down to 85,500!
Title: Re: Mortgage Payoff Club!!
Post by: Scubanewbie on February 09, 2016, 07:10:08 AM
Love hearing everyone's progress.  Keep it up!  I'm in a slow and steady plod towards payoff in 2020, a little less than 15 years after purchasing the house.
Title: Re: Mortgage Payoff Club!!
Post by: Threshkin on February 15, 2016, 12:47:03 PM
Question for you guys -

Wife said something today as a joke that I kind of want to do.  Talk me out of it.

We have $X left on our mortgage, where X represents about 1-1.25 years worth of expenses.  We have 0.5X right now in cash (emergency fund), and will be receiving 0.5X in the form of a bonus in early April.  She was saying that we could pay the entire thing off then and we'd be mortgage free.  That'd put our payoff at just under a year which would be a ton of fun for me.
 
Obviously that leaves us with no emergency fund, which is why she was joking.  However, I know MMM has talked about having a HELOC open in the past as an emergency fund of sorts, which then allows him to have more money invested. We could open one for < $100 in the case of emergencies, and then build back our emergency fund over the next 3 months. I, the ever impatient one, want to do it.

Tell me this is a bad idea.

I spent my emergency fund to pay off the last of my mortgage.  I did not open a HELOC but instead just sweated it out.  I reallocated 100% of the old mortgage payment plus all non-401k funds to rebuilding my emergency fund.  It went pretty back up quick.
Title: Re: Mortgage Payoff Club!!
Post by: Threshkin on February 15, 2016, 01:59:22 PM
Question for you guys -

Wife said something today as a joke that I kind of want to do.  Talk me out of it.

We have $X left on our mortgage, where X represents about 1-1.25 years worth of expenses.  We have 0.5X right now in cash (emergency fund), and will be receiving 0.5X in the form of a bonus in early April.  She was saying that we could pay the entire thing off then and we'd be mortgage free.  That'd put our payoff at just under a year which would be a ton of fun for me.
 
Obviously that leaves us with no emergency fund, which is why she was joking.  However, I know MMM has talked about having a HELOC open in the past as an emergency fund of sorts, which then allows him to have more money invested. We could open one for < $100 in the case of emergencies, and then build back our emergency fund over the next 3 months. I, the ever impatient one, want to do it.

Tell me this is a bad idea.

I spent my emergency fund to pay off the last of my mortgage.  I did not open a HELOC but instead just sweated it out.  I reallocated 100% of the old mortgage payment plus all non-401k funds to rebuilding my emergency fund.  It went pretty back up quick.

That settles it! I told my wife that if Threskin* agreed with me that we should do it.

*Replace preceding name with any and all posters who agree with me

:).  Seriously, though, thanks for the reply. We'd be looking at a 3 month build back so I don't see it as a huge issue, and the payoff would be a ton of fun.

I had about a six month build back time.  But I also had a good amount of after tax investments that I could tap if necessary.  I consider it my own personal LOC.
Title: Re: Mortgage Payoff Club!!
Post by: cheddarpie on February 15, 2016, 08:12:28 PM
Question for you guys -

Wife said something today as a joke that I kind of want to do.  Talk me out of it.

We have $X left on our mortgage, where X represents about 1-1.25 years worth of expenses.  We have 0.5X right now in cash (emergency fund), and will be receiving 0.5X in the form of a bonus in early April.  She was saying that we could pay the entire thing off then and we'd be mortgage free.  That'd put our payoff at just under a year which would be a ton of fun for me.
 
Obviously that leaves us with no emergency fund, which is why she was joking.  However, I know MMM has talked about having a HELOC open in the past as an emergency fund of sorts, which then allows him to have more money invested. We could open one for < $100 in the case of emergencies, and then build back our emergency fund over the next 3 months. I, the ever impatient one, want to do it.

Tell me this is a bad idea.

Let us know what you do! I'm in a similar position where I *could* pay off my mortgage now, but it would mean liquidating my emergency fund and taking a loss on the investments (OK now for tax loss harvesting purposes and, while I don't like the hint of timing the market, it seems like an ok time to be gradually getting back in...). I hadn't thought about the HELOC idea before. That might be a good way to do it. Without a mortgage, I could probably get my savings back up within the year ... which also makes me think instead of saving more I should just save like a dog and send all my extra money to the mortgage.  I am talking myself in circles!

So if you have a 3-month build back, the alternative is you just pay your mortgage off in 3 months? That seems like a better idea ... but either way, so awesome that you are about to knock this baby out!! Congrats!
Title: Re: Mortgage Payoff Club!!
Post by: Lmoot on February 16, 2016, 12:13:53 AM
I officially joined the prepay club in December. Prepaid $15k so far with $41k to go...in my 7th year of a 30 year mortgage. I could pay it off by end of 2017, but I think I'll pay it down to $10k, switch to saving for the DP on an investment property, then pay it off after closing on the 2nd property. That way I don't mess with my credit score (which can drop 50+ points if paying off an installment loan...especially if it's your only one), right before a major purchase. So I'm hoping to have it completely paid off, and to have a second property by end of 2018.
Title: Re: Mortgage Payoff Club!!
Post by: dandypandys on February 16, 2016, 08:51:41 AM
Update on the below and lots of thoughts swilling about what to do next.

So I continued with what I said I would do: I am now at $47,658.00!!
Also with a few sales in our condo area, we now owe less than what it is worth. Zillow says it is worth 79k now, though i think it would sell for more. I bought it for 140k in 2003 :( So it is sad to think of selling it for so much less.. but i really would like a bigger home so i can have a better art studio.
I am now wondering all sorts of things, could/should i get a 2nd mortgage, should i rent or sell this condo, should i stick some more savings in the principle or hold in case i need it for a downpayment.



I've decided I'm in! yay! Gonna send a huge check to them this week :) take me down to 68k owed. Then we are going to put an extra 1000 towards it every month. yippee.
We want to sell it in a few years maybe 3, once we have it paid off and have cash for a downpayment on another house.
 Logged
Title: Re: Mortgage Payoff Club!!
Post by: dandypandys on February 16, 2016, 01:38:36 PM
I've been reading some of this thread today and have a few Qs for you all.
Is there a nifty worksheet download anywhere to plunk my numbers in and see how much i am saving as i pay down?
Someone mentioned being fined for paying down, i never knew that. i have a coldwell banker loan, do you think i have payment penalties or paying off early penalties?
i just thought i paid it off and that was that, but do i have to have a meeting to discuss that with them??

Ive never bothered to refinance- wondering if i should at this late stage.. i have a 5.9% 30 yr on 130k with 47k left. I could pay it all off today if i really wanted to, but am thinking about buying another place.

thanks for any help given.
Title: Re: Mortgage Payoff Club!!
Post by: Heckler on February 16, 2016, 05:41:25 PM

*Replace preceding name with any and all posters who agree with me

:).  Seriously, though, thanks for the reply. We'd be looking at a 3 month build back so I don't see it as a huge issue, and the payoff would be a ton of fun.

I'd go 50/50.  Keep the EF, but dump the bonus onto it.  That said, we've stopped excess mortgage payments in the past two years since I learned how to invest smartly.  Still paid off the mortgage, but also increased savings by 40K.  Caveat - we paid of a 25 year mortgage in 13 years through bonuses, raises etc, but didn't have more than a $3k EF until two years ago.  Worth every penny!
Title: Re: Mortgage Payoff Club!!
Post by: pdxmonkey on February 16, 2016, 05:59:19 PM
I've been reading some of this thread today and have a few Qs for you all.
Is there a nifty worksheet download anywhere to plunk my numbers in and see how much i am saving as i pay down?
Someone mentioned being fined for paying down, i never knew that. i have a coldwell banker loan, do you think i have payment penalties or paying off early penalties?
i just thought i paid it off and that was that, but do i have to have a meeting to discuss that with them??

Ive never bothered to refinance- wondering if i should at this late stage.. i have a 5.9% 30 yr on 130k with 47k left. I could pay it all off today if i really wanted to, but am thinking about buying another place.

thanks for any help given.
My mortgage provider has an amortization calculator that will show me how much I save at various payment levels. Mint.com will also do it for you if you set up a goal. I am sure there are generic calculators out there as well as both of those sites require accounts. Shouldn't be hard to find one on google I wouldn't think. Early payment penalties are not typical in the United States, but you should check with your provide. I always check before getting any loan that it has no penalties for early payment, so have never had to do so after the fact. 5.9% is really high. If you decide not to pay it off you should probably think about refinancing whats left into a 10 yr or 15 year with a rate under 3%. What is the remaining period left at a normal payment rate?
Title: Re: Mortgage Payoff Club!!
Post by: dandypandys on February 16, 2016, 07:25:55 PM
ah I've never thought to remember that, so went to look, it says 2035.. I have been hacking away at the principle fairly well. I'm glad i probably don't have penalties for early payment of loan, but i should call them to see. One of my friends told me once that refinancing her home was so much work! and so i have just put it off because i haven't had time to deal with it and instead just thought i would pay it fast.
Title: Re: Mortgage Payoff Club!!
Post by: BlueHouse on February 22, 2016, 12:00:11 PM
I'm joining the club!!  I want to be out from under the crushing debt of my mortgage.
I've been on the fence about this for a few years and stashing all of my rental income into a sinking fund invested in VTSAX.  Last month I sold all of the sinking fund and I took a big chunk from a cash account to pay down the mortgage prior to a reamortization.  Goal is to pay the mortgage down to a point that I could afford payments even if I'm not employed.  That might be all the way to zero, or it might not.  Even with my plans to continue paying 1000 extra each month, I'm still a looooong way away from retiring this debt, so I'm trying to speed that up.  I still have a long time to figure out the end result.

I'm in a HCOL city in a big house.  I'll show progress in terms of % paid off against initial home value (equity against initial sale price).


Update: 
Progress (%equity against initial sale price)
So happy to be over 50%!  I still haven't signed the paperwork for the reamortization.  Should probably do that sooner rather than later, because right now, it's free, but I sort of want to see if I can get it to a nice even number before I do it. 
Title: Re: Mortgage Payoff Club!!
Post by: dogboyslim on February 22, 2016, 05:14:07 PM
...Last December we refinanced to a 10 year fixed HELOC at $99k using the proceeds from the prior home sale.  In 2015 we decided that the two of us didn't need 3 cars, so we sold our newest car and put another 25k into the mortgage.  Right now we sit at $34k $32k.  I ended up overwitholding my taxes last year after messing up the prior year due to the move, so we expect to have about $10k in state/federal refund, and we are paying down about $2k per month.  My office did well last year so I'm hoping for a bit of a discretionary bonus (they have done it in other years).  If that happens, we could be mortgage free by May.  Otherwise, December 2016 will be our last payment.

Edit: down to $32k after January pmt

Office discretionary bonus was better than expected so we decided to pay it off.  As of today, We have no debt other than the temporary credit card debt that gets paid off every month.  While it feels good, it also doesn't really feel different as we are about to sit down to our baked chicken for dinner.
Title: Re: Mortgage Payoff Club!!
Post by: nnls on February 22, 2016, 05:33:44 PM
...Last December we refinanced to a 10 year fixed HELOC at $99k using the proceeds from the prior home sale.  In 2015 we decided that the two of us didn't need 3 cars, so we sold our newest car and put another 25k into the mortgage.  Right now we sit at $34k $32k.  I ended up overwitholding my taxes last year after messing up the prior year due to the move, so we expect to have about $10k in state/federal refund, and we are paying down about $2k per month.  My office did well last year so I'm hoping for a bit of a discretionary bonus (they have done it in other years).  If that happens, we could be mortgage free by May.  Otherwise, December 2016 will be our last payment.

Edit: down to $32k after January pmt

Office discretionary bonus was better than expected so we decided to pay it off.  As of today, We have no debt other than the temporary credit card debt that gets paid off every month.  While it feels good, it also doesn't really feel different as we are about to sit down to our baked chicken for dinner.

Congratulations!
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on February 22, 2016, 06:23:30 PM
...Last December we refinanced to a 10 year fixed HELOC at $99k using the proceeds from the prior home sale.  In 2015 we decided that the two of us didn't need 3 cars, so we sold our newest car and put another 25k into the mortgage.  Right now we sit at $34k $32k.  I ended up overwitholding my taxes last year after messing up the prior year due to the move, so we expect to have about $10k in state/federal refund, and we are paying down about $2k per month.  My office did well last year so I'm hoping for a bit of a discretionary bonus (they have done it in other years).  If that happens, we could be mortgage free by May.  Otherwise, December 2016 will be our last payment.

Edit: down to $32k after January pmt

Office discretionary bonus was better than expected so we decided to pay it off.  As of today, We have no debt other than the temporary credit card debt that gets paid off every month.  While it feels good, it also doesn't really feel different as we are about to sit down to our baked chicken for dinner.

This is fantastic! Congratulations! I'll bet that was the best baked chicken you've ever had!
Title: Re: Mortgage Payoff Club!!
Post by: pdxmonkey on February 22, 2016, 08:22:19 PM
...Last December we refinanced to a 10 year fixed HELOC at $99k using the proceeds from the prior home sale.  In 2015 we decided that the two of us didn't need 3 cars, so we sold our newest car and put another 25k into the mortgage.  Right now we sit at $34k $32k.  I ended up overwitholding my taxes last year after messing up the prior year due to the move, so we expect to have about $10k in state/federal refund, and we are paying down about $2k per month.  My office did well last year so I'm hoping for a bit of a discretionary bonus (they have done it in other years).  If that happens, we could be mortgage free by May.  Otherwise, December 2016 will be our last payment.

Edit: down to $32k after January pmt

Office discretionary bonus was better than expected so we decided to pay it off.  As of today, We have no debt other than the temporary credit card debt that gets paid off every month.  While it feels good, it also doesn't really feel different as we are about to sit down to our baked chicken for dinner.

I'm betting next month feels different. No payment to make for the first time. Congrats!
Title: Re: Mortgage Payoff Club!!
Post by: Heckler on February 22, 2016, 09:32:10 PM

Someone mentioned being fined for paying down, i never knew that. i have a coldwell banker loan, do you think i have payment penalties or paying off early penalties?
i just thought i paid it off and that was that, but do i have to have a meeting to discuss that with them??



This is not a "do you think" question to ask us.   You have a mortgage contract that will define prepayment terms and conditions.   Understand what you've signed. Ideally before you sign it, but before you overpay by accident would be good too.
Title: Re: Mortgage Payoff Club!!
Post by: Heckler on February 22, 2016, 09:40:22 PM



I'm betting next month feels different. No payment to make for the first time. Congrats!

We just had our first pay check that didn't disappear to mortgage oblivion.  Thanks to MMM, it did however disappear to the wife's RSP account to buy emerging markets index which are currently lowest in our allocation. 

So, it didn't feel much different yet.  Still eating spaghettini with homemade meatballs.  We splurged and added green beans though!
Title: Re: Mortgage Payoff Club!!
Post by: dabears847 on February 24, 2016, 02:27:34 PM
Quote from: bzzzt [/quote

Agreed. It also gives me the ability to look at the market on down days and not feel total despair.

Indexes down 2% today? IDGAF. Burn baby burn! Daddy wants to buy low! ;)
Oh yeah!  I'm not one to time the markets but it feels pretty damn good to have poured all my money into the house when markets were peaking and now shift my focus to investing while prices are going   down.
I'm actually torn on this right now, $32,000 left on the mortgage, and I'd like to invest the bonus in April rather than payoff the house.
Title: Re: Mortgage Payoff Club!!
Post by: pdxmonkey on February 24, 2016, 05:11:58 PM
Wait until April and see where the markets are. No need to worry about it now. You can't pay the mortgage or invest until you get the money. If the markets are significantly up or down from where they are now your decision may change.
Title: Re: Mortgage Payoff Club!!
Post by: Debts_of_Despair on February 27, 2016, 09:34:37 AM
So after payoff, my credit score went down by over 30 points.  This is without any other major changes in credit activity. Not sure if I should care. 
Title: Re: Mortgage Payoff Club!!
Post by: William Cannon on February 27, 2016, 04:30:06 PM
I joined the club last December.  I sleep better at night now for sure.  I also feel a sense of accomplishment to reach this goal in our mid 30s on one income, while my wife stays home and raises our 4 children.  Not only that, but it brought me and my wife closer together since we had to work as a team, endure the same sacrifices for the good of our little clan, and collaborate on how to do it without burdening our family life.  I am truly blessed.

Tapa

Title: Re: Mortgage Payoff Club!!
Post by: Lmoot on February 28, 2016, 10:05:45 AM
So after payoff, my credit score went down by over 30 points.  This is without any other major changes in credit activity. Not sure if I should care.

If you don't mind me asking:

1) Do you have a car loan or any other type of loan?
2) How many credit cards do you have?
3) How old was your mortgage when you paid it off?

I ask because I'm concerned about this happening to me when I pay off my mortgage because I don't have any other installment type loan and am wondering if because my mortgage will  be 8 years old when I pay it off, if that will impact my age of credit greatly when I close it. I'll be buying my first rental property about a year after the payoff and the interest rate will already be higher due tp it being an investment property so I want to minimize reasons for lenders to raise the rate of the new mortgage even higher.
Title: Re: Mortgage Payoff Club!!
Post by: Debts_of_Despair on February 28, 2016, 03:14:13 PM
If you don't mind me asking:

1) Do you have a car loan or any other type of loan?
No.  Last had a car loan in Nov of 2014.
2) How many credit cards do you have?
Three, with a total limit around 50k.  I only use two regularly.  Utilization rarely goes beyond 4%. This is my only current credit usage.
3) How old was your mortgage when you paid it off?
About 8.5 years.

Keeping up a good credit score is a game for suckers, apparently.
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on February 28, 2016, 07:19:53 PM
I ask because I'm concerned about this happening to me when I pay off my mortgage because I don't have any other installment type loan and am wondering if because my mortgage will  be 8 years old when I pay it off, if that will impact my age of credit greatly when I close it. I'll be buying my first rental property about a year after the payoff and the interest rate will already be higher due tp it being an investment property so I want to minimize reasons for lenders to raise the rate of the new mortgage even higher.

MMM frugalists live outside that realm and they know it. When you have zero "back end debt", your credit cards are paid off, cars are paid off and they figure out you've got investments cranking out your living wage, they fall all over themselves to loan money to you.
Title: Re: Mortgage Payoff Club!!
Post by: Lmoot on February 29, 2016, 09:36:14 AM
^ I definitely agree that they're for the lenders. They are not meant to reward us for sure. High rollers and high spenders are not the only ones that need to be concerned with credit scores though...folks who are into real estate investing need to maintain a high score as the interest rate will have a direct (sometimes significant) impact on monthly cashflow...which is where my interest lies.

Since I plan on floating multiple properties within the next 5 years, even the slightest increase in the rates I can qualify for could cost me thousands of dollars per year, per property, until I refinance or pay it off.

lol, I'm definitely not rolling around in a brand new 4x4. My 2003 Honda was paid off in 2009 (paid off in 9 months), and I expect to keep it for at least 7 more years, and my monthly requirements are under $1000. My non-necessities push that up a few hundred dollars more, but I could live on less than $1000 if I had to, which would cover mortgage, gas (work from home at 1 job, live 5 min walk from 2nd job), food (parents have a backyard homestead, and I can buy staples at Costco), and car insurance. I could probably even slip my phone bill in there at $40 and stay sub $1k. I could get access to internet via phone/friends/family/library/both jobs. Granted, I DON'T get by on the minimum right now because I don't have to...but it's comforting to know that I could. And I have purposely designed it that way.

And I'll approach my balancing of real estate expenses the same way...minimize minimize minimize....which unfortunately means playing the game I was never meant to win.
Title: Re: Mortgage Payoff Club!!
Post by: Lmoot on February 29, 2016, 09:44:27 AM
If you don't mind me asking:

1) Do you have a car loan or any other type of loan?
No.  Last had a car loan in Nov of 2014.
2) How many credit cards do you have?
Three, with a total limit around 50k.  I only use two regularly.  Utilization rarely goes beyond 4%. This is my only current credit usage.
3) How old was your mortgage when you paid it off?
About 8.5 years.

Keeping up a good credit score is a game for suckers, apparently.

Thank you so much for sharing that. My profile looks similar...paid off car, no other loans than mortgage, will be at 8 years at pay off, except I have 5 cc's. My current utilization is about 15-20% due to balances that are paid off in full each month, and a balance on a 0% promotion. But that will be gone by the time I apply for a new mortgage, and I'm aiming for 0-5% utilization.

I'm thinking about leaving a little of the mortgage left and paying it off after I buy another property so my credit doesn't drop, but it sure would be easier and faster to save for a DP with it completely gone so I won't have that monthly bill anymore.
Title: Mortgage Payoff Club!!
Post by: IndyPendent on February 29, 2016, 04:46:42 PM
Paid off today! Couldn't believe the size of the smile on my face!

Paid off in 4.5 years--the mortgage was just 1.5x salary at the beginning (pre-MMM days).

Ramped up efforts in early 2013, wrote the final check today!
Title: Re: Mortgage Payoff Club!!
Post by: MrDelane on February 29, 2016, 08:47:35 PM
Paid off today! Couldn't believe the size of the smile on my face!

Paid off in 4.5 years--the mortgage was just 1.5x salary at the beginning (pre-MMM days).

Ramped up efforts in early 2013, wrote the final check today!

Congratulations.
4.5 years is an impressive achievement.
Title: Re: Mortgage Payoff Club!!
Post by: BBub on March 01, 2016, 06:54:53 AM
That's awesome IndyPendent!  Congrats!
Title: Re: Mortgage Payoff Club!!
Post by: dandypandys on March 03, 2016, 10:17:30 AM
Congrats!!! Indypendant

I just wrote a 1000 check today for principle :)
That should take us down to 45k once our normal payment comes out in a few days too.
yippeeeee
Title: Re: Mortgage Payoff Club!!
Post by: pdxmonkey on March 07, 2016, 09:34:27 PM
I've been working at my mortgage for a while now. I originally had a 30 yr $146000 loan. In 2012 I refinanced into a 15 yr @ 2.875%. As of today I have about $67,500 remaining.

I flip flop between investing more and paying off the mortgage. I have been maxing out my contributions to a Roth IRA since my mid 20's and last year I maxed out my 401k (Roth) for the first time and will be doing so again this year. I had always considered retiring early, but have only recently considered retiring extremely early and finally about 2 months ago opened up a taxable investment account in addition to my 401k and IRA accounts as I'll need money outside those accounts to live on. I've put some money into this and started paying the mortgage down less aggressively although still more than the minimum payment. I really want to get it paid off even though mathematically it is not necessarily the best idea. If P/E ratio goes lower on the market I will probably not pay any extra on the mortgage.

Down to $60k as of tomorrow. I threw some dry powder at it as the S&P 500 is still near all time highs and I feel like I'm dollar cost averaging in enough per month right now. Flows out of my bank savings account into the market + my recent mortgage payments are greater than my current income so doing both isn't sustainable long term. I will probably have to slow down the mortgage payoff next year some time OR work more to keep paying it down quickly. $60k seems really close to being done, but calendar wise there is a good distance to go.

Jan. 2015 - ~100k
Oct. 2015 - ~$67500
Dec.3, 2015 - ~$60k
Feb. 5, 2016 - $52,108.53

Not allowed to contribute to a Roth IRA this year. I don't like the current market prospects enough to put the whole $5500 I was going to put into the Roth for 2015 into a taxable account so I used some of it on the mortgage. It's exciting to see my balance go down so quickly since the beginning of 2015, but disappointing to know this rate is no longer sustainable long term now that late last year I started investing in a taxable account as well. Because...the math.

March 7, 2016 - 49,774.21
Title: Re: Mortgage Payoff Club!!
Post by: BlueHouse on March 08, 2016, 09:22:10 AM
I'm joining the club!!  I want to be out from under the crushing debt of my mortgage.
I've been on the fence about this for a few years and stashing all of my rental income into a sinking fund invested in VTSAX.  Last month I sold all of the sinking fund and I took a big chunk from a cash account to pay down the mortgage prior to a reamortization.  Goal is to pay the mortgage down to a point that I could afford payments even if I'm not employed.  That might be all the way to zero, or it might not.  Even with my plans to continue paying 1000 extra each month, I'm still a looooong way away from retiring this debt, so I'm trying to speed that up.  I still have a long time to figure out the end result.

I'm in a HCOL city in a big house.  I'll show progress in terms of % paid off against initial home value (equity against initial sale price).
It seems that my timing was somewhat fortuitous - selling off my sinking fund near the top of the market and moving the cash to my mortgage and then slowly buying back in at a lower price as cash becomes available (earnings and 401k match).  It's great when things work out, but I'm under no illusions that it had anything to do with my acumen, and instead realize that the next time it could be the opposite.  So I still want to pay this house down, and plan to make one more sizable deposit before I sign the paperwork for the recast (can you believe I still haven't done it!?) 

Anyway, not huge progress since August, but here's the updated list:
Progress (%equity against initial sale price)
Here's the best part (to me):  Originally slated to make last payment at the age of 74.  As of today, my last payment is scheduled for age 64!  And moving each month. 
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on March 08, 2016, 11:54:25 AM
... broke $100k on the mortgage principal owed. Today it's $98,519.67.

I'm liking the energy this thread keeps tapping into. Awesome mortgage paydown energy here!

Even with my plans to continue paying 1000 extra each month, I'm still a looooong way away from retiring this debt, so I'm trying to speed that up....pay this house down, and plan to make one more sizable deposit before I sign the paperwork for the recast (can you believe I still haven't done it!?) 

GO GO GO BlueHouse! You are in good company, don't fret that you delayed the recast - you well know, the more you do up-front, the lower the payment will be after the recast. (and if they are like my mortgage provider, they recast ONLY ONCE, so you gotta make it good....) I'm aiming for a recast by May 2016, which is much later than I'd planned, but it's not a problem.

Please keep us posted - I want to hear what happens to your monthly mortgage payment after the recast!
Title: Re: Mortgage Payoff Club!!
Post by: couponvan on March 08, 2016, 06:06:03 PM
We have $18K left...We've been adding an extra $1.25K to the payments certain months as we are able.  Plan to drop a large payment out of DH's bonus 3/15/16 and have our mortgage gone by 9/8/16....Of course last year I said something similar when the balance was around $26K and then the following week our kitchen and basement were flooded and we spent all last Summer redoing our kitchen.

The basement is still at the studs...We'd rather cash flow it without a 4.625% interest rate so we're trying to pay off the mortgage first.

Joining the club should give us the incentive to finish strong.
Title: Re: Mortgage Payoff Club!!
Post by: pdxmonkey on March 08, 2016, 11:19:08 PM
I'm joining the club!!  I want to be out from under the crushing debt of my mortgage.
I've been on the fence about this for a few years and stashing all of my rental income into a sinking fund invested in VTSAX.  Last month I sold all of the sinking fund and I took a big chunk from a cash account to pay down the mortgage prior to a reamortization.  Goal is to pay the mortgage down to a point that I could afford payments even if I'm not employed.  That might be all the way to zero, or it might not.  Even with my plans to continue paying 1000 extra each month, I'm still a looooong way away from retiring this debt, so I'm trying to speed that up.  I still have a long time to figure out the end result.

I'm in a HCOL city in a big house.  I'll show progress in terms of % paid off against initial home value (equity against initial sale price).
It seems that my timing was somewhat fortuitous - selling off my sinking fund near the top of the market and moving the cash to my mortgage and then slowly buying back in at a lower price as cash becomes available (earnings and 401k match).  It's great when things work out, but I'm under no illusions that it had anything to do with my acumen, and instead realize that the next time it could be the opposite.  So I still want to pay this house down, and plan to make one more sizable deposit before I sign the paperwork for the recast (can you believe I still haven't done it!?) 

Anyway, not huge progress since August, but here's the updated list:
Progress (%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)
Here's the best part (to me):  Originally slated to make last payment at the age of 74.  As of today, my last payment is scheduled for age 64!  And moving each month.

Very nice work. Shaved 10 years off. My goal is similar. I want to not have to worry if I get laid off and have to sustain myself on unemployment for a bit vs draining the stache. I looked into recasting, but my provider does not recast, so it's zero or bust.
Title: Re: Mortgage Payoff Club!!
Post by: BlueHouse on March 09, 2016, 08:36:32 PM
(and if they are like my mortgage provider, they recast ONLY ONCE, so you gotta make it good....) I'm aiming for a recast by May 2016, which is much later than I'd planned, but it's not a problem.

Please keep us posted - I want to hear what happens to your monthly mortgage payment after the recast!
Thanks Faraday!  Yes, mine only does it once as well.  I don't think it makes any difference financially whether I wait a little longer to re-cast or do it immediately.  After all, interest is calculated against my outstanding principal.  Do you know if there's any advantage to recasting now vs. 6 months or a year from now?  (Assuming the option to do so for free still exists).

[I looked into recasting, but my provider does not recast, so it's zero or bust.
Yikes.  I thought all mortgages allowed for one recast.  I hope mine doesn't take the option away. 
Title: Re: Mortgage Payoff Club!!
Post by: Lmoot on March 10, 2016, 10:20:53 AM
The benefit of recasting later is if you make pre payments along the way. I've prepaid my mortgage by $15k and even though my lender required a $5k payment within 30 days of recasting...the previous amount I've paid down will affect my new monthly payment. Most recasts won't affect your monthly payment that much unless you prepay early into the mortgage. I'm 7 years in, 15k prepaid. I want to get to 50% pre paid within 10 years, then recast the other 50% out to the remaining 20 years (which I'll probably pay off early once I reach a certain level of investment property cash flow).
Title: Re: Mortgage Payoff Club!!
Post by: ryan.triguy on March 11, 2016, 05:10:42 PM
Hello All..

I was wondering about some quick advice from fellow MMM's.  I was just introduced within the last month and have been eating the info as fast as I can.  My wife is totally on board as well which is awesome. 

The advice I am seeking follows the mortgage payoff.  We have started paying an extra third of our monthly payment in bi monthly payments on our 30 yr which is really at 28.5 yrs at 3.375%.  We were going to refi but after lots of consideration she wanted to hold off since the rate would not change much and we could still just make the same inflated payment.  We have an extra 20k sitting doing nothing in savings.  I know we have been ignorant to the ways of money working for us.  We are debating if it would be better to throw this at the mortgage or start a Vanguard type stock.  She already contributes to a roth IRA and I have retirement through work and a deffered compensation that I contribute to at work.  She is also finishing out her Military time with reserves which will benefit us greatly once we can draw from it.

My thinking is although we have several avenues once we hit the random ages set up by retirement.  I want to retire early, which will reduce my pension.  I know I will keep working part time and she will work as well. 

Would it be better to keep attempting to be mortgage free or put the 20k in say Vanguard and let it work or us. 

My long term plan is to pay as much as possible in the next 6 yrs on mortgage at that point retire at 15yrs on job which give me 30% at 60yrs old.  At that point sell our house moving back to the Midwest where her family is and buying cash for house.  Then working part time while kids are in school. 

Any thoughts?  Any and all are appreciated.  Sorry if im tagging on to the Mortgage payoff but in a way it is working toward the same goal.  Thanks
Title: Re: Mortgage Payoff Club!!
Post by: Rural on March 11, 2016, 06:09:01 PM
Hello All..

I was wondering about some quick advice from fellow MMM's.  I was just introduced within the last month and have been eating the info as fast as I can.  My wife is totally on board as well which is awesome. 

The advice I am seeking follows the mortgage payoff.  We have started paying an extra third of our monthly payment in bi monthly payments on our 30 yr which is really at 28.5 yrs at 3.375%.  We were going to refi but after lots of consideration she wanted to hold off since the rate would not change much and we could still just make the same inflated payment.  We have an extra 20k sitting doing nothing in savings.  I know we have been ignorant to the ways of money working for us.  We are debating if it would be better to throw this at the mortgage or start a Vanguard type stock.  She already contributes to a roth IRA and I have retirement through work and a deffered compensation that I contribute to at work.  She is also finishing out her Military time with reserves which will benefit us greatly once we can draw from it.

My thinking is although we have several avenues once we hit the random ages set up by retirement.  I want to retire early, which will reduce my pension.  I know I will keep working part time and she will work as well. 

Would it be better to keep attempting to be mortgage free or put the 20k in say Vanguard and let it work or us. 

My long term plan is to pay as much as possible in the next 6 yrs on mortgage at that point retire at 15yrs on job which give me 30% at 60yrs old.  At that point sell our house moving back to the Midwest where her family is and buying cash for house.  Then working part time while kids are in school. 

Any thoughts?  Any and all are appreciated.  Sorry if im tagging on to the Mortgage payoff but in a way it is working toward the same goal.  Thanks


Wait a couple of months and read a lot more. I'm usually pretty firmly in the pay off the mortgage camp. But there are good reasons not to with a rate as low as yours. If you hang around here for a couple of months, you'll be in a much better position to make an informed decision for your $20k, and a couple of months almost certainly isn't going to make a big difference in terms of gains,
Title: Re: Mortgage Payoff Club!!
Post by: asauer on March 11, 2016, 06:56:45 PM
Down to 84k.  Picked up a couple of gigs for this month to make some more headway. 
Title: Re: Mortgage Payoff Club!!
Post by: Money Badger on March 11, 2016, 07:10:23 PM
@ryan.triguy,  What is the best way to improve your monthly "margin of safety" in cashflow?   Does $20K need to pay off any other debts that will increase your monthly free cash flow?   That's where the real magic begins to pay off debt...  when you turn the momentum in the your favor.

Also, without knowing your mortgage balance, it's impossible to say if putting the $20K in the mortgage is worth it.   If you put that chunk, plus other principal prepays together, you may be in a position to "recast" the mortgage, again to reduce your monthly "commitment" and improve free cash flow.   Then apply the free cast towards the mortgage (accelerating payoff since you'd no longer be paying off interest on that $20K that just extends your payoff timeline)!
Title: Re: Mortgage Payoff Club!!
Post by: FunkyStickman on March 14, 2016, 08:32:17 AM
Down to $56K, and about to drop my tax return on it (again). Just that will cut almost 9 years off the mortgage. (EDIT) We've cut 9 years off total so far... not from this 1 payment.

For every dollar I pay on principal, I'm paying $1.75 in interest.

Sickening. My wife is finally 100% on board with this.
Title: Re: Mortgage Payoff Club!!
Post by: ryan.triguy on March 14, 2016, 09:47:33 AM
indentured4now,  Mortgage is the only debt we have.  We haven't paid down enough to recast yet.  Im not really worried about the monthly payment now just thinking more of long term paying it down.  My thoughts are to pay down enough so when we are ready to sell 8-10 years we would net enough to downsize and pay cash, possibly enough left over to invest at that point.  Im just debating if it would pay more in the future to invest the 20k now in longer time in more would make.  Seems like either way is going to save me money in long run. 
Title: Re: Mortgage Payoff Club!!
Post by: frost7777 on March 15, 2016, 12:09:24 PM
Hello, first post after following MMM for several years.  Started getting serious about paying the mortgage off in 2014.  Hopping to join the club by next March!

Single income.
My wife stays at home with our three children.

12/2010 < 80k
03/2013 < 70k
04/2014 < 60k
12/2014 < 50k
09/2015 < 40k
03/2016 < 30k
03/2017 = 0 ?? 
Title: Re: Mortgage Payoff Club!!
Post by: BlueHouse on March 15, 2016, 12:47:12 PM
I have 12.5 months left on my mortgage. What do people around here do to celebrate, when it's all done? Would taking the kids to Disneyland be facepunch-worthy? they've missed out on fun stuff because of my financial priorities, so including them in the reward seems fair, and like an object lesson in priority-setting.

so: Disneyland in 2017?

Need more info.  Where do you live? how old are the kids?  Drive or Fly?  Why do you think going to Disneyland would be more fun for them than camping or going to the beach?  What lesson are you trying to teach them and how does Disneyland fit in to that lesson? 
Title: Re: Mortgage Payoff Club!!
Post by: Neustache on March 15, 2016, 12:58:07 PM
We are going to DisneyWorld for the first time when we pay off our mortgage (but we also go to Disneyland once a year on our huge road trip).   We'll drive down (MO) because there's things to do on the way there and the way back.  I personally don't find it face-punch worthy but most here would. 

Title: Re: Mortgage Payoff Club!!
Post by: dandypandys on March 15, 2016, 01:37:29 PM
I just put another 1k in, so down to 44k now :) Also, I figured out how to do it direct debit, so i saved a stamp and future stamps too. Bonus!
Title: Re: Mortgage Payoff Club!!
Post by: Kaydedid on March 16, 2016, 08:39:47 AM
I ask because I'm concerned about this happening to me when I pay off my mortgage because I don't have any other installment type loan and am wondering if because my mortgage will  be 8 years old when I pay it off, if that will impact my age of credit greatly when I close it. I'll be buying my first rental property about a year after the payoff and the interest rate will already be higher due tp it being an investment property so I want to minimize reasons for lenders to raise the rate of the new mortgage even higher.

MMM frugalists live outside that realm and they know it. When you have zero "back end debt", your credit cards are paid off, cars are paid off and they figure out you've got investments cranking out your living wage, they fall all over themselves to loan money to you.

Seconding this.  Check out local banks and credit unions if you can.  4 years ago, we had poor credit due to fiscal responsibility (no prior loans), and while the big banks wouldn't give us the time of day, both the local bank and credit union immediately approved us for much more than we were looking to borrow.  They actually sat down with us and got an accurate financial picture, whereas the big banks just ran the credit score.
Title: Re: Mortgage Payoff Club!!
Post by: Kaydedid on March 16, 2016, 08:44:20 AM
As of today, owe ~$8.7k on the mortgage, and looking to have it paid off by the end of the year!
Original mortgage was ~$45k 3.5 years ago, but we dumped another $40k into repairs (foreclosure that needed a TON of work).

We have enough in savings to kill the mortgage today, but will wait a few months to see how a major pay cut/job change shakes out.  Can't wait to be rid of this-our only debt! 
Title: Re: Mortgage Payoff Club!!
Post by: McGeens on March 18, 2016, 04:31:02 AM
We've joined the club- paid off our mortgage in January. I've let the dust settle and rebuilt our Efund, but it feels wonderful. Started at $250k in 2007, but the first few years were slow going. Then we got focused and honed in on it in 2011, when we owed $165k. We're in Oz, so technically the account isn't closed but it is fully offset now. It feels wonderful to have it gone!!

Funnily enough, first thing the bank did was write to us offering a new mortgage and encouraging us to redraw for important life needs like renovations and cars (cars!! Seriously). I stuck that letter on the wall next to our payoff chart- ha!!

Good luck to all of you whittling down your balances. It'll all be worth it!
Title: Re: Mortgage Payoff Club!!
Post by: asauer on March 18, 2016, 01:24:15 PM
I have 12.5 months left on my mortgage. What do people around here do to celebrate, when it's all done? Would taking the kids to Disneyland be facepunch-worthy? they've missed out on fun stuff because of my financial priorities, so including them in the reward seems fair, and like an object lesson in priority-setting.

so: Disneyland in 2017?
No- I think it's just whatever your family would like, fits in your budget and fits with your values.  Travel is our "thing" and it's been on hold while we knock out the budget.  We'll be taking the family to Belize when we pay it off (hopefully 12/16).
Title: Re: Mortgage Payoff Club!!
Post by: ozbeach on March 18, 2016, 06:19:25 PM
We've joined the club- paid off our mortgage in January. I've let the dust settle and rebuilt our Efund, but it feels wonderful. Started at $250k in 2007, but the first few years were slow going. Then we got focused and honed in on it in 2011, when we owed $165k. We're in Oz, so technically the account isn't closed but it is fully offset now. It feels wonderful to have it gone!!

Funnily enough, first thing the bank did was write to us offering a new mortgage and encouraging us to redraw for important life needs like renovations and cars (cars!! Seriously). I stuck that letter on the wall next to our payoff chart- ha!!

Good luck to all of you whittling down your balances. It'll all be worth it!
My mortgage (in Australia too) is a line-of-credit not an offset, but essentially the same deal. It has been "paid off" for at least five years with a positive balance that I use as my main transaction account. Have never heard from the bank.
Title: Re: Mortgage Payoff Club!!
Post by: redbirdfan on March 19, 2016, 07:37:21 AM
For those of you who knew you wanted to pay the mortgage off early at the time of purchase, did you go with a 15 year, 20 year, 30 year or ARM?  Did you value flexibility or paying less overall interest more?  If you could go back, would you make the same decision?   
Title: Re: Mortgage Payoff Club!!
Post by: mies on March 19, 2016, 08:40:44 AM
For those of you who knew you wanted to pay the mortgage off early at the time of purchase, did you go with a 15 year, 20 year, 30 year or ARM?  Did you value flexibility or paying less overall interest more?  If you could go back, would you make the same decision?

I knew I wanted to pay it off early, but I didn't have a job that would allow me to afford a 15 or 10 year mortgage at the time. We went with a 30 year loan at %6.24 in late 2007 and I paid extra principal when I could afford  it. We just refinanced to a 10 year %3.39 loan last year and have been making great progress with extra principal payments and the fact that the regular monthly payment now consists of more principal than interest.

With the benefit of hindsight, we should have stayed in our cheap 1 bedroom apartment for a couple of more years and saved like crazy. We could have bought a house outright or gotten a 10 year loan with a super low monthly payment. If we could have started with a 10 year loan back in 2007, I still would have tried to pay it off sooner.
Title: Re: Mortgage Payoff Club!!
Post by: BlueHouse on March 19, 2016, 10:52:07 AM
For those of you who knew you wanted to pay the mortgage off early at the time of purchase, did you go with a 15 year, 20 year, 30 year or ARM?  Did you value flexibility or paying less overall interest more?  If you could go back, would you make the same decision?
Flexibility. My job is not super-secure, and I'm risk averse. I want the flexibility of having a smaller minimum req payment, but I'd like to do it in 15 years (or less).
Title: Re: Mortgage Payoff Club!!
Post by: dabears847 on March 19, 2016, 03:09:17 PM
It's official, the house is paid off!

Happy Dance!
Title: Re: Mortgage Payoff Club!!
Post by: Money Badger on March 20, 2016, 07:09:55 PM
indentured4now,  Mortgage is the only debt we have.  We haven't paid down enough to recast yet.  Im not really worried about the monthly payment now just thinking more of long term paying it down.  My thoughts are to pay down enough so when we are ready to sell 8-10 years we would net enough to downsize and pay cash, possibly enough left over to invest at that point.  Im just debating if it would pay more in the future to invest the 20k now in longer time in more would make.  Seems like either way is going to save me money in long run.

@Ryan...  Classic decision to make between "invest or pay down mortgage"...   With 8-10 years on the house and your age and other info given, it seems best to invest the $20K in a classic age-adjusted mix of index funds.   In your 30's, you've got a nice, long horizon and can afford to wait out a market drop to grow that stash so your situation favors investing the $20K.   Then once it's grown a bit, look for the right chance later to reduce lending costs significantly down the road using the gains such as refi to a 15 year loan or a recast for increasing your free cashflow and savings rate.   Or you guys do the ideal thing  and downsize now to really kill the mortgage and LBYM (and avoid lifestyle creep).   Hard to do as a couple and the temptations of "keeping up" with the Jones's I know, but amazing peace of mind if you guys can pull it off.   If both of you read "The Millionaire Next Door" and agree to live that way with shared goals in mind, it certain can be done.  Good luck!
Title: Re: Mortgage Payoff Club!!
Post by: SAfAmBrit on March 20, 2016, 07:59:16 PM
Hi All

I have been lurking around the MMM site for a while and been watching this forum with interest. I got past the $100 000 point and need some support to keep going and keep myself accountable.

 A little background I am a South African, lived in England for 10 years and have been in the USA for 8 years. My SO was in the USAF for 24 years. We bought our house in Las Vegas in 2012 for $158 800 at 3.75% and first payment was 03/2012. In SA things were different and I was used to living on nothing, moved to England things were easier, came to the US and things were easy. My husband spent money easily so I thought earned huge - only to discover the world of loans, credit cards and easy credit. Fortunately I hate shopping, material things - my only requirement from material things - they work. My SO on the other hand loves shiny things!  2013, my husband was retired, earnings shot up and we owed the IRS. I was told we had x days to pay - we didn't have it in the bank so I took over the accounts - showed my husband what we owed, gave him an allowance and worked at it. We now have no debt but this mortgage so I started concentrating on eliminating it.

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 - $17262 so far

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

I max out my 401k and IRA Roth (terms I learned in the last 2 years.)

Thanks to everyone who allowed me to lurk and inspired me so far!

Title: Re: Mortgage Payoff Club!!
Post by: Rheagar on March 21, 2016, 08:14:06 AM
Paid off my mortgage on Friday!

Bought my house 3.5 years ago in Nov 2012 for ~129k. It was an FHA loan at 3.125%, IIRC the initial loan amount was ~121k. This was before I had discovered MMM so I wasn't quite as diligent about my finances as I am today. I have a relatively high income and when I initially got the loan I figured I could just pay down the loan pretty quick to get to 20% equity and get rid of PMI. But then I learned that I was required to pay PMI for a minimum of 5 years and that REALLY ticked me off. So I began looking into ways to get rid of PMI before that 5 years was up (beyond refinancing) the only thing I could think of was to pay off the entire mortgage. So I began to sock away money into a taxable account with the intent of paying off the house in under 5 years - because fuck the bank and fuck PMI.

Well this month after I got a bonus my taxable account had enough in it to pay off the entire loan balance. So I sold it all and paid off the house on Friday. It is awesome seeing 'Paid in full' on the account! I have taken a minute every morning since to appreciate the feeling, and it feels fantastic.

For those that are worried about the math behind paying off a 3.125% loan, trust me I struggled with it mightily. But after doing the math over and over again getting rid of PMI makes the math about a wash, and I'll take the guaranteed ROR and peace of mind any day. No regrets!
Title: Re: Mortgage Payoff Club!!
Post by: BBub on March 21, 2016, 09:00:41 AM
It's official, the house is paid off!

Happy Dance!

Congrats!

Hi All

I have been lurking around the MMM site for a while and been watching this forum with interest. I got past the $100 000 point and need some support to keep going and keep myself accountable.

Welcome to the forums.  I'm glad you decided to de-lurk & hope you'll keep contributing.  Congrats on getting your finances in order & best of luck with the payoff goal!

Paid off my mortgage on Friday!
Badass!
Title: Re: Mortgage Payoff Club!!
Post by: rjbf65 on March 24, 2016, 07:54:25 AM
I'll join.

Started June 2014 at 71k.

It's currently $55k.  Goal is to finish it off by next June.   Have 20k in cash that would finish it off by then.  We are currently investing 15% as well.   Basically doing the Dave Ramsey plan.

Currently down to $51,500.  Hoping to get under $50K a month from today.

Down to $49660.  Was able to throw an extra $1555 at it this time.  Budgeting to be able to throw an extra $2500 next month.

$46,950 -- a $2,710 reduction this month.  October should be a little better with the magic of the 3 paychecks for me this month.  Should be under $40K by end of the year.

$41,843 -- a $5,107 reduction this month.  The 3rd paycheck was big this time.  Would love to be able to do that every month!  My goal for end of November is to get under 40K.  Once I'm at the $40K mark, I'll have about equal amounts of cash in the bank and mortgage balance.  Still also maxing out 2 Roth IRA's which speaks for $917 per month.  It is always tempting to stop the Roth or to throw a bunch of the available cash at it.  I think I'll just stay the course of throwing all the extra cash that was left over after the month at it.  Once the mortgage is gone, all towards investing.


$38,922 -- $2,921 reduction this month.  More travel and eating out this month, as well as property taxes and insurance slowed us down a bit.  But we are at the goal of being under $40K balance!  It's going down at a pretty good pace that I'm happy with!  We will have some Christmas expenses coming up this month but it shouldn't be all that bad.  My target is to hope to be under $37K at the end of December.

$35,898 -- $3,024 reduction this month.  Received a small bonus from work to more or less cancel out Christmas spending.  Also had to replace the wife's windshield.  Would love to be down to under $33K after January is up.  Have quite a few things on the horizon.  We are expecting our first child in late May.  With that we are planning on upgrading the vehicle fleet some.  While going from 3 vehicles to 2.  Just looking for more room and reliability.  Need to have the ability of hauling a child, 2 dogs, and luggage for trips to see our parents.  We have been on the mustachian side of things when it comes to vehicles.  Our 3 vehicles combined might be worth about 9 or 10K.  My goal is to have a paid for house as well as having atleast 1 newer vehicle also paid for by the time the baby arrives.  We are now at the position of having more cash than mortgage balance.  Really looking forward to knocking it out asap!  Another thing about having it paid off by the end of May is I'll finally be eligible to contribute to my 401K starting in July.  Would be wonderful to max out a 401K in just the remaining half of the year!

$32,026 -- a $3,872 reduction this month.  I always have to wait until the 5th or 6th of each month to process my extra payment.  I'm one of those weird ones that pay things as soon as I get the notice instead of holding on to the money for as long as possible.  If all goes well February and March have the potential to be good debt reduction months.  Tax refund in February hopefully and a 3 paycheck month in March.  We will be doing some vehicle upgrading with a new baby on the way but I will do everything I can to keep that cost to a minimum.


$31,609 --  a $417 reduction... I only made the normal payment this month and putting the agressive paydown on hold.  Some big possible life changes on the horizon and I want to have as much cash in the bank as possible just in case.  After the dust settles is when I'll finish it off.   
Title: Re: Mortgage Payoff Club!!
Post by: dogboyslim on March 24, 2016, 08:28:50 AM
Office discretionary bonus was better than expected so we decided to pay it off.  As of today, We have no debt other than the temporary credit card debt that gets paid off every month.  While it feels good, it also doesn't really feel different as we are about to sit down to our baked chicken for dinner.

It is Official.  We got the note in the mail yesterday and confirmed that the release has been filed with the county.  Still hasn't set in.  The $2k just went to a different account.  I suppose the difference is that the account balance now goes UP with each transfer instead of down!
Title: Re: Mortgage Payoff Club!!
Post by: SAfAmBrit on March 24, 2016, 09:10:45 AM
Congrats - now for the happy dance.
Title: Re: Mortgage Payoff Club!!
Post by: Heckler on March 25, 2016, 12:19:48 AM

It is Official.  We got the note in the mail yesterday and confirmed that the release has been filed with the county.  Still hasn't set in.  The $2k just went to a different account.  I suppose the difference is that the account balance now goes UP with each transfer instead of down!

Us too!  the papers came yesterday.  Congrats!  It's awesome to see the mortgage payment going into savings instead of the floor drain!
Title: Re: Mortgage Payoff Club!!
Post by: dogboyslim on March 25, 2016, 12:54:56 PM
Congrats Heckler!
Title: Re: Mortgage Payoff Club!!
Post by: Faraday on March 25, 2016, 07:03:23 PM

It is Official.  We got the note in the mail yesterday and confirmed that the release has been filed with the county.  Still hasn't set in.  The $2k just went to a different account.  I suppose the difference is that the account balance now goes UP with each transfer instead of down!

Us too!  the papers came yesterday.  Congrats!  It's awesome to see the mortgage payment going into savings instead of the floor drain!

Congratulations DBS and Heckler! Fine Job, you've reached the end of a long, long road! Please - report back in the thread how it affects your spending, budget and lifestyle? The motivation is very helpful!
Title: Re: Mortgage Payoff Club!!
Post by: Heckler on March 25, 2016, 07:20:39 PM

Congratulations DBS and Heckler! Fine Job, you've reached the end of a long, long road! Please - report back in the thread how it affects your spending, budget and lifestyle? The motivation is very helpful!

Spending - $2k reduction because of the FIRE under our butt.  Last years (Nov 14-Nov 15) expenses (not including $40k mortgage) were $45k.  This past year (Mar 15-Mar 16) was $43k.  Now we save the $40k/year mortgage instead.

Budget - now putting $3,000+/month to TFSA instead of mortgage, open wife's TFSA because mine will be maxed in 3 months time, in addition to 30% pre-tax + employer match to RRSP.

Lifestyle - no change, other than I no longer worry about job security in a high tech industry. My next severance package is going towards travel!

Thank you MMM, or for sure I'd be driving a Porsche now like every one else at head office.  Still driving the 2006 Pontiac to work.

Title: Re: Mortgage Payoff Club!!
Post by: dogboyslim on March 28, 2016, 04:35:12 PM
Congratulations DBS and Heckler! Fine Job, you've reached the end of a long, long road! Please - report back in the thread how it affects your spending, budget and lifestyle? The motivation is very helpful!

We are just now shopping for our $90k Escalade so we don't experience a drop in our credit score by not having any debt.... ;)
Title: Re: Mortgage Payoff Club!!
Post by: Heckler on March 28, 2016, 06:01:53 PM

We are just now shopping for our $90k Escalade so we don't experience a drop in our credit score by not having any debt.... ;)

We've been putting all spending on 2 credit cards for the last 5 years and pay in full every month.  Don't even know my credit rating, but they keep trying to raise my limit, so it must be OK.
Title: Re: Mortgage Payoff Club!!
Post by: MissNancyPryor on March 28, 2016, 06:44:44 PM
We paid off the house last October and we are certain that it was the right thing to do.  For years we did all the second guessing and wondering about "gee, it is only 3.5%, we can make more in the market" but at some point along the line it became the obvious choice.  We are in the final stages of the FIRE journey and could actually go right now except for the pure fear of being so weird and not really having the nerve to jump.  We are still building a bigger cash 'stache to bridge to our over-funded 401(K)s.  I want a really big cash pile and I am sure that it will probably be over-funded as well knowing our conservative styles.  We know we had to get out from under any debt to be totally ready.     

Wouldn't you know it, my company had massive lay offs in November and hubby's firm went through the same thing just after that.  Even though both of us are among the survivors and still have jobs there was such profound relief in knowing that we are untouchable now.  Go ahead, fire us, we know we can be FIRE at any minute.  To face that situation with a big pile of FU money and zero debt was really peaceful.  Peers were sick with fear and I felt terrible for them, but I don't think my proselytizing early retirement is welcome.   

Therefore, to the financial calculators out there please don't bother to say how we made a mistake because of some theory about making more in the market.  We considered everything and lived on both sides of the equation.  This side is more peaceful.  My house is paid off forever and that return is guaranteed, guaranteed, guaranteed.  Plus, the NW chart now has this crazy hockey stick look to it--golly, it it sure getting steep to the right without that mortgage drag, even with a flat market!   

I am rooting for all of you mortgage burners!  GO FOR IT!   
Title: Re: Mortgage Payoff Club!!
Post by: mies on March 29, 2016, 03:34:08 AM
We paid off the house last October and we are certain that it was the right thing to do.  For years we did all the second guessing and wondering about "gee, it is only 3.5%, we can make more in the market" but at some point along the line it became the obvious choice.  We are in the final stages of the FIRE journey and could actually go right now except for the pure fear of being so weird and not really having the nerve to jump.  We are still building a bigger cash 'stache to bridge to our over-funded 401(K)s.  I want a really big cash pile and I am sure that it will probably be over-funded as well knowing our conservative styles.  We know we had to get out from under any debt to be totally ready.     

Wouldn't you know it, my company had massive lay offs in November and hubby's firm went through the same thing just after that.  Even though both of us are among the survivors and still have jobs there was such profound relief in knowing that we are untouchable now.  Go ahead, fire us, we know we can be FIRE at any minute.  To face that situation with a big pile of FU money and zero debt was really peaceful.  Peers were sick with fear and I felt terrible for them, but I don't think my proselytizing early retirement is welcome.   

Therefore, to the financial calculators out there please don't bother to say how we made a mistake because of some theory about making more in the market.  We considered everything and lived on both sides of the equation.  This side is more peaceful.  My house is paid off forever and that return is guaranteed, guaranteed, guaranteed.  Plus, the NW chart now has this crazy hockey stick look to it--golly, it it sure getting steep to the right without that mortgage drag, even with a flat market!   

I am rooting for all of you mortgage burners!  GO FOR IT!   

Congratulations! What you mentioned about your job situation is the reason I want our mortgage gone. I know you can get money out of retirement accounts early for emergencies, but I'd rather just let it sit.

Great job!
Title: Re: Mortgage Payoff Club!!
Post by: BlueHouse on March 29, 2016, 06:39:43 AM
Therefore, to the financial calculators out there please don't bother to say how we made a mistake because of some theory about making more in the market.  We considered everything and lived on both sides of the equation.  This side is more peaceful.  My house is paid off forever and that return is guaranteed, guaranteed, guaranteed.  Plus, the NW chart now has this crazy hockey stick look to it--golly, it it sure getting steep to the right without that mortgage drag, even with a flat market!   

I am rooting for all of you mortgage burners!  GO FOR IT!   
Great motivation!  Thank you for this!
Title: Re: Mortgage Payoff Club!!
Post by: dogboyslim on March 29, 2016, 11:27:46 AM

We are just now shopping for our $90k Escalade so we don't experience a drop in our credit score by not having any debt.... ;)

We've been putting all spending on 2 credit cards for the last 5 years and pay in full every month.  Don't even know my credit rating, but they keep trying to raise my limit, so it must be OK.

Someone told me I'd be in trouble with my credit report and that I should go out and get a car loan to keep it solid, hence my jest.  Since I'm not looking for rentals my credit score really only impacts my insurance pricing now as we have no plans for future loans.  We also put most of our spending through a rewards CC that we pay off each month, but I suppose it is possible my score could drop a few points.  The reality is that our spending hasn't changed at all and we paid off the mortgage, and we have no plans to loosen up the purse strings.
Title: Re: Mortgage Payoff Club!!
Post by: YoungGranny on April 01, 2016, 12:19:06 PM
Refinance is complete! Mortgage balance is $131,500. Decided my goal will be to get it under $100k in 1 year. Hopefully completely paid off in 5 years or less but I think I need a short-term goal to focus on for motivation.

Sent a chunk of money at it again this month, down to $129,532



Haven't updated in a bit... balance is sitting at $120,485 - I'm taking a blended approach to paying off the mortgage while still investing. Feels good to have one number moving in the right direction since my investments are not doing so hot this month. Extra large payment on the mortgage this month since it was bonus time.....if only I could do that every month haha.

As of 4/1 the balance is at $112,377, still a long way to go but I'm actually feeling close to that sweet 5-digit mortgage! My birthday is in August and I think that would be a great target. It does feel like it's going much faster now so hopefully I can keep up this momentum!
Title: Re: Mortgage Payoff Club!!
Post by: TheInsuranceMan on April 01, 2016, 12:20:23 PM
We paid ours off yesterday!  But wait, that was due to us selling it, and getting a new house....and a new mortgage.  However, we did have 51k in equity in the property we sold!
Title: Re: Mortgage Payoff Club!!
Post by: Ceridwen on April 01, 2016, 01:06:31 PM
We paid off the house last October and we are certain that it was the right thing to do.  For years we did all the second guessing and wondering about "gee, it is only 3.5%, we can make more in the market" but at some point along the line it became the obvious choice.  We are in the final stages of the FIRE journey and could actually go right now except for the pure fear of being so weird and not really having the nerve to jump.  We are still building a bigger cash 'stache to bridge to our over-funded 401(K)s.  I want a really big cash pile and I am sure that it will probably be over-funded as well knowing our conservative styles.  We know we had to get out from under any debt to be totally ready.     

Wouldn't you know it, my company had massive lay offs in November and hubby's firm went through the same thing just after that.  Even though both of us are among the survivors and still have jobs there was such profound relief in knowing that we are untouchable now.  Go ahead, fire us, we know we can be FIRE at any minute.  To face that situation with a big pile of FU money and zero debt was really peaceful.  Peers were sick with fear and I felt terrible for them, but I don't think my proselytizing early retirement is welcome.   

Therefore, to the financial calculators out there please don't bother to say how we made a mistake because of some theory about making more in the market.  We considered everything and lived on both sides of the equation.  This side is more peaceful.  My house is paid off forever and that return is guaranteed, guaranteed, guaranteed.  Plus, the NW chart now has this crazy hockey stick look to it--golly, it it sure getting steep to the right without that mortgage drag, even with a flat market!   

I am rooting for all of you mortgage burners!  GO FOR IT!   

This sums up our feelings so well! We are 4 years away from paying it off (max - hopefully earlier), and I can't wait to get it done.
Title: Re: Mortgage Payoff Club!!
Post by: dandypandys on April 01, 2016, 05:21:01 PM
$27, 116 to go!!!!! So Exciting.
Title: Re: Mortgage Payoff Club!!
Post by: theblackdahlia on April 04, 2016, 10:27:50 AM
$119,872 to date.  I so want to pay off my mortgage so I can go down to part time status.  Great job everyone and a wonderful, closer to debt-free year to all of you :)

That is my plan too. Ah, part-time. 86k left...hopefully it will be paid off in 5 years.
Title: Re: Mortgage Payoff Club!!
Post by: SAfAmBrit on April 04, 2016, 11:21:13 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 - $22724 so far

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

4/1 Remaining balance $81837
Title: Re: Mortgage Payoff Club!!
Post by: PFHC on April 04, 2016, 03:22:55 PM
Going to join the fun. :)

Balance is $126,942.

Been paying our full mortgage payment biweekly, (I.e. making 13 extra payments a year) until we decided to remodel our kitchen. We're currently rebuilding our savings, then plan to quadruple the mortgage. Hopefully we can start that in May.

I'll be posting our balance monthly.
Title: Re: Mortgage Payoff Club!!
Post by: pdxmonkey on April 04, 2016, 06:50:16 PM
Anyone have projects planned for when they pay off the house?

Kind of struggling with this, actually. Our house is great, but there are some updates we want. Some we'll do cheap, some we won't. On the one hand we won't have a mortgage, and we purposely waited until we were paid off to do some upgrades.

On the other hand, it seems weird not to take full advantage of no mortgage land by dumping money into index funds or real estate. Opportunity cost is the issue I'm struggling with, I guess.

I'm planning to reward myself with some updates once my mortgage is paid off. Not a major addition or anything, but there are a couple doors that could use replacing, maybe some shutters instead of blinds.
Title: Re: Mortgage Payoff Club!!
Post by: mies on April 05, 2016, 03:49:16 AM
I wouldn't feel bad about fixing up your house with your newly freed up mortgage payment money. We are going to fix up some stuff once we pay off the mortgage too. We are going to repair or replace our front porch. It's brick. I want to see if we can replace the sandstone treads and replace any cracked bricks. If we can't, we'll demolish it and replace it.

Our carpeting is getting worn too. The berber and has gotten snagged and there are some pet stains from the previous owner that can't be cleaned. We'll either replace it or refinish the hardwood beneath it. If the pet stains ruined the hardwood, we'll probably just do new carpeting.

The last big upgrade would be a new furnace and air conditioner. They are getting pretty old.

We'd like to do do the kitchen, bathroom, and build a new garage, but I'm not sure if we are going to stay in that house forever. I don't want to dump a ton of money on non essential fixes if we aren't going to be there for a long time.
Title: Re: Mortgage Payoff Club!!
Post by: Heckler on April 05, 2016, 08:21:09 AM
Still holding off on the ugly iron railings, dishwasher and water heater replacements until my asset allocation is rebalanced at least.   I buy US and EAFE in my RSPs, and CND in my TFSA.  The CND allocation is $3000 low, so just a month or two left then we will get the water heater replaced.  I just upped my RSP contribution to 38% of gross pay, so will need the cash to keep up with my TFSA.
Title: Re: Mortgage Payoff Club!!
Post by: couponvan on April 05, 2016, 01:49:55 PM
$17,319 as of today remaining on the FIRE house.  Still trying to convince DH we should just pay the sucker off with available cash....
Title: Re: Mortgage Payoff Club!!
Post by: asauer on April 06, 2016, 08:36:36 AM
Down to 77,996!  Actually, when I made the payment, it brought it down to 78,013 so I HAD to transfer a little extra so I could see that thousands number tick over.  I'm so easily amused.
Title: Re: Mortgage Payoff Club!!
Post by: dandypandys on April 06, 2016, 11:49:29 AM
$27, 116 to go!!!!! So Exciting.


Mortgage
Balance
$25,478.56

YEAHHHH i am going to put the 478.56 to round it up towards the end of the month if i can :)
Title: Re: Mortgage Payoff Club!!
Post by: Astreja on April 06, 2016, 10:15:19 PM
As of Monday evening, mortgage balance is below $2000.  Principal is coming down nearly $175 a week, so I've got about 11 payments left to go and a projected payout date in late June.
Title: Re: Mortgage Payoff Club!!
Post by: dandypandys on April 07, 2016, 06:25:10 AM
As of Monday evening, mortgage balance is below $2000.  Principal is coming down nearly $175 a week, so I've got about 11 payments left to go and a projected payout date in late June.
wowwwww so close :)
Title: Re: Mortgage Payoff Club!!
Post by: asauer on April 07, 2016, 07:07:20 AM
$27, 116 to go!!!!! So Exciting.


Mortgage
Balance
$25,478.56

YEAHHHH i am going to put the 478.56 to round it up towards the end of the month if i can :)

That's the best feeling isn't it?  When you can put enough pennies together to tip it over the edge?!  Love it!
Title: Re: Mortgage Payoff Club!!
Post by: motiv8ed on April 07, 2016, 01:42:38 PM
Wow, after reading these posts, I had to join. Current Balance is: $119,781 Hopefully I will be able to stay motivated and join the club.
Title: Re: Mortgage Payoff Club!!
Post by: mies on April 07, 2016, 03:16:51 PM
Wow, after reading these posts, I had to join. Current Balance is: $119,781 Hopefully I will be able to stay motivated and join the club.

You'll be surprised how quickly it goes down when you really set your mind to it. Welcome to the forum!
Title: Re: Mortgage Payoff Club!!
Post by: pdxmonkey on April 07, 2016, 06:45:41 PM
Anyone have projects planned for when they pay off the house?

Kind of struggling with this, actually. Our house is great, but there are some updates we want. Some we'll do cheap, some we won't. On the one hand we won't have a mortgage, and we purposely waited until we were paid off to do some upgrades.

On the other hand, it seems weird not to take full advantage of no mortgage land by dumping money into index funds or real estate. Opportunity cost is the issue I'm struggling with, I guess.

I'm planning to reward myself with some updates once my mortgage is paid off. Not a major addition or anything, but there are a couple doors that could use replacing, maybe some shutters instead of blinds.

Lol. Yeah your list sounds a bit more reasonable than mine.

Our deck needs to be replaced. Not actually safe. And for this I'm doing the cheap option and just doing the same footprint and doing the work myself. Awesome.

After that, however...

We have three bathrooms we want to do to varying degrees. The kitchen "needs" a facelift, too, which is my toughest one, as we won't again additional utility like we will with the bathrooms or deck.  Talked to my wife last night and I think the plan is to do the deck and 2 of the bathrooms (with one of those two hopefully being done by me) and waiting on bathroom 3 and kitchen until we have another year of solid investing.

It helps that my kitchen is brand new a few years back. I bought a foreclosure and it had only half a floor and roaches in there. I got to rebuild it with a counter/cabinet layout that suits me. IMO the old layout was pretty bad. The new layout is much better for food prep and cooking. The roof has been replaced since I owned it as well. I do sometimes dream about some nice bathroom upgrades though.

When moving, I highly recommend getting a trashed place for cheaper and fixing it up how you like it with the difference you would pay on somewhere move in ready if you can. With a move in ready place there will still be things you don't like and want to change eeven if they're new.
Title: Re: Mortgage Payoff Club!!
Post by: motiv8ed on April 07, 2016, 06:58:28 PM
Wow, after reading these posts, I had to join. Current Balance is: $119,781 Hopefully I will be able to stay motivated and join the club.

You'll be surprised how quickly it goes down when you really set your mind to it. Welcome to the forum!

Thank you, I hope so. Does anyone have a recommendation on the best way of paying down the mortgage? I struggle with deciding on whether to
- Apply money to the principal as I get it.
- Save for a few months, in case I need the money for something, then apply it to the principal.
- Invest in a brokerage account and then pay it off once I have enough invested.
Title: Re: Mortgage Payoff Club!!
Post by: dandypandys on April 07, 2016, 07:53:46 PM
these days i use mint.com to create a budget and have budgeted in 1 extra payment. a 2nd payment is what is left over from my budget etc and just before i get paid again. Makes me eager to not spend anything all month so the 2nd payment can be high :)
i always keep a certain amount in my savings too but that is built up already so i don't touch it.
Title: Re: Mortgage Payoff Club!!
Post by: BlueHouse on April 08, 2016, 04:53:07 AM
Does anyone have a recommendation on the best way of paying down the mortgage? I struggle with deciding on whether to
- Apply money to the principal as I get it.
- Save for a few months, in case I need the money for something, then apply it to the principal.
- Invest in a brokerage account and then pay it off once I have enough invested.
I do a mix of these. Each month I double the full principal amount when I make my payment, because I'm comfortable with and never really miss that amount. On top of that, every payment that I received from a rental for three years went into a sinking fund at a brokerage and last august I cashed that out and made a large principal payment. Now I'm waiting for my first work bonus and I'm going to apply that to principal. Once I get the mortgage down enough (hopefully this summer), I will recast the mortgage so that I'm not tied in to those high payments anymore and if I lose my high-paying job, I can still afford my house on a regular salary. Even after the recast, I plan to continue to pay as much monthly as I have been, just no more giant lump sums.
Title: Re: Mortgage Payoff Club!!
Post by: couponvan on April 08, 2016, 12:19:59 PM
Ok.  Down to 145k as we just signed on the new house.  We'll wait for it to go through today and then on Monday put additional $$ down.  If income and spending go as planned, with a little luck we'll be done in two years.

11 months and 23 days later - it's gone.

26, wife is 25. Think this will hit me tomorrow.

Won't really tell many people (besides thousands of people on the internet, I guess). My parents will know. Wife's brother/SIL will know. They're big mustachians thanks to me, and paid off their home last year and told us right away. Can't think of anyone else.

Cheers everyone.

CONGRATULATIONS!!! Amazing effort with $145K paid off in under a year.  You must have some great income levels and will power. 
Title: Re: Mortgage Payoff Club!!
Post by: dandypandys on April 08, 2016, 02:01:30 PM
$27, 116 to go!!!!! So Exciting.


Mortgage
Balance
$25,478.56

couldn't help myself- put 5k in from our savings so down to 20,478.56 now! Can't wait to be in the teens!
Title: Re: Mortgage Payoff Club!!
Post by: motiv8ed on April 08, 2016, 02:43:21 PM
Ok.  Down to 145k as we just signed on the new house.  We'll wait for it to go through today and then on Monday put additional $$ down.  If income and spending go as planned, with a little luck we'll be done in two years.

11 months and 23 days later - it's gone.

26, wife is 25. Think this will hit me tomorrow.

Won't really tell many people (besides thousands of people on the internet, I guess). My parents will know. Wife's brother/SIL will know. They're big mustachians thanks to me, and paid off their home last year and told us right away. Can't think of anyone else.

Cheers everyone.

Congratulations, thats awesome.
Title: Re: Mortgage Payoff Club!!
Post by: dandypandys on April 08, 2016, 03:39:43 PM
Ok.  Down to 145k as we just signed on the new house.  We'll wait for it to go through today and then on Monday put additional $$ down.  If income and spending go as planned, with a little luck we'll be done in two years.

11 months and 23 days later - it's gone.

26, wife is 25. Think this will hit me tomorrow.

Won't really tell many people (besides thousands of people on the internet, I guess). My parents will know. Wife's brother/SIL will know. They're big mustachians thanks to me, and paid off their home last year and told us right away. Can't think of anyone else.

Cheers everyone.
Amazing congrats!!!!!
Title: Re: Mortgage Payoff Club!!
Post by: MrDelane on April 08, 2016, 09:46:54 PM
Wow.
Just wow.

That's an incredible achievement.
Congratulations to you both.
Title: Re: Mortgage Payoff Club!!
Post by: tightwaddy on April 10, 2016, 06:13:18 AM
I've been part of this challenge since Aug. 1, without even knowing it existed :)  When my husband and I saw we were at the last $100K (originally $300K in Sept. 2004), we decided to do everything possible to pay it off by Jan. 1, 2017.

Aug 1, 2015: $101,100
April 1, 2016: $64,669

So, $36,404 done in 8 months.  Not quite on track, but we're hoping to pick up some steam once the warmer months roll in (living in Maine, heat is a big cost in winter--no AC in summer).  Working some side hustles and attic purge sales to get a little extra for principal.
Title: Re: Mortgage Payoff Club!!
Post by: pdxmonkey on April 11, 2016, 07:02:44 PM
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.
Title: Re: Mortgage Payoff Club!!
Post by: bzzzt on April 11, 2016, 11:08:19 PM
Great job to everyone.

Work has been slow over the last month (construction) but I don't hardly care since the mortgage is knocked out. I can pay my bills/spending by working one week a month. It's sweet!
Title: Re: Mortgage Payoff Club!!
Post by: JourneyToLaunch on April 12, 2016, 08:40:31 AM
I would like to join this club!

Currently our mortgage is $357K at a 4.375% rate (30 years)

I would really like to pay off the mortgage as soon as possible since I would like to retire at 40 (in 7 years). My husband would continue to work and we would live off of his income. The goal is to payoff the mortgage as soon as possible since I can't foresee retiring and living on my husband's income comfortably with the mortgage in place.  How soon depends on how aggressive we want to get with paying it down. Here are some different scenarios (right now we are doing scenario 2 but would ideally like to move to Scenario 5 this year). It's hard to know how aggressive to be when we also want to put some money in 529 accounts and do taxable investing at the same time:

 
Scenario 1
Only paying off what owe, mortgage will be paid off when we are 61

Scenario 2
Extra $500 a month from investment property, mortgage will pay off when we are 51
 
Scenario 3
Extra $500 a month from investment property, AND my recent raise $235 per month, (round to a $300) ,  mortgage will pay off when we are 48

Scenario 4
Extra $500 a month from investment property AND my recent raise $300 , AND $10K a year from my annual  bonus , mortgage will pay off when we are 43

Scenario 5
Extra $500 a month from investment property AND my recent raise $300 , $10K a year from my annual  bonus AND $5K from Husband's extra jobs, mortgage will pay off when we are 42

Scenario 6
Extra $500 a month from investment property AND my recent raise ($300) , $10K a year from my  annual bonus AND $10K from Husband's extra jobs , mortgage will pay off when we are 41

 
Title: Re: Mortgage Payoff Club!!
Post by: couponvan on April 12, 2016, 10:59:48 AM
I would like to join this club!

Currently our mortgage is $357K at a 4.375% rate (30 years)

I would really like to pay off the mortgage as soon as possible since I would like to retire at 40 (in 7 years). My husband would continue to work and we would live off of his income. The goal is to payoff the mortgage as soon as possible since I can't foresee retiring and living on my husband's income comfortably with the mortgage in place.  How soon depends on how aggressive we want to get with paying it down. Here are some different scenarios (right now we are doing scenario 2 but would ideally like to move to Scenario 5 this year). It's hard to know how aggressive to be when we also want to put some money in 529 accounts and do taxable investing at the same time:

 
Scenario 1
Only paying off what owe, mortgage will be paid off when we are 61

Scenario 2
Extra $500 a month from investment property, mortgage will pay off when we are 51
 
Scenario 3
Extra $500 a month from investment property, AND my recent raise $235 per month, (round to a $300) ,  mortgage will pay off when we are 48

Scenario 4
Extra $500 a month from investment property AND my recent raise $300 , AND $10K a year from my annual  bonus , mortgage will pay off when we are 43

Scenario 5
Extra $500 a month from investment property AND my recent raise $300 , $10K a year from my annual  bonus AND $5K from Husband's extra jobs, mortgage will pay off when we are 42

Scenario 6
Extra $500 a month from investment property AND my recent raise ($300) , $10K a year from my  annual bonus AND $10K from Husband's extra jobs , mortgage will pay off when we are 41

I would go for Scenario 4.5, 50% of husband extra jobs (whatever those jobs might bring in) to the house....He can decide to put extra in or not.  Likely it will be somewhere between 41 to 42 and you will be all done.
Title: Re: Mortgage Payoff Club!!
Post by: JourneyToLaunch on April 12, 2016, 11:39:00 AM
I would like to join this club!

Currently our mortgage is $357K at a 4.375% rate (30 years)

I would really like to pay off the mortgage as soon as possible since I would like to retire at 40 (in 7 years). My husband would continue to work and we would live off of his income. The goal is to payoff the mortgage as soon as possible since I can't foresee retiring and living on my husband's income comfortably with the mortgage in place.  How soon depends on how aggressive we want to get with paying it down. Here are some different scenarios (right now we are doing scenario 2 but would ideally like to move to Scenario 5 this year). It's hard to know how aggressive to be when we also want to put some money in 529 accounts and do taxable investing at the same time:

 
Scenario 1
Only paying off what owe, mortgage will be paid off when we are 61

Scenario 2
Extra $500 a month from investment property, mortgage will pay off when we are 51
 
Scenario 3
Extra $500 a month from investment property, AND my recent raise $235 per month, (round to a $300) ,  mortgage will pay off when we are 48

Scenario 4
Extra $500 a month from investment property AND my recent raise $300 , AND $10K a year from my annual  bonus , mortgage will pay off when we are 43

Scenario 5
Extra $500 a month from investment property AND my recent raise $300 , $10K a year from my annual  bonus AND $5K from Husband's extra jobs, mortgage will pay off when we are 42

Scenario 6
Extra $500 a month from investment property AND my recent raise ($300) , $10K a year from my  annual bonus AND