Mortgage Payoff Club!!

[SwordGuy]

My bank won't even let me in the door. Probably because they think I'm there to take money out ;-)

Too funny, @talltexan !

=======================

I'm hoping to pay off our two mortgages within a month or three.

Just sold one house today, proceeds will cover 27% of our current new home mortgage balance.

Scheduled to sell our old home on the 17th.  (Knock on wood.)   That will pay off it's mortgage and pay off 49% of the current new home mortgage balance.

We had gotten a home to set up as a charitable house but we just don't want to volunteer to risk working with tradesmen who won't wear a @#@%$%#&@ mask and do social distancing and hand washing.   Got a verbal offer on it today with the expectation of a written offer on Monday.   That will cover the remaining 24% of the current home mortgage balance.  It should be a cash sale so it should go thru pretty quickly.

So, potentially by the end of the August we might actually be mortgage free.

Keep your fingers crossed the next two sales actually happen and on time.

So excited!!!

[Need2Save]

Before July Payment $27,692
Principle Paid this month: $7,734
New Balance: $19,958

We had an extra check each this month which we diverted some to the mortgage per our plan.  Only 4 more payments to go!

[Bird In Hand]

@SwordGuy -- wow, unloading three properties (and using the proceeds to eliminate what I imagine is probably your biggest monthly expense) sounds like a fantastic simplification of your finances, and indeed your life.  Congrats all around, and I hope your next two sales proceed smoothly and quickly.

[Zamboni]

@SwordGuy Wow! that's great! I hope this final sale goes through as planned.

Mostly I am joining this gauntlet because I paid off my HELOC recently. Yay! Good grief please God don't let me do anything that stupid again! We have some remodel work we would like to do, but these must be paid off in cash this time!

My next project is to look at refi rates for our existing home's first mortgage around October. I've got about one more year of holding pattern and just regular mortgage payments, and then hopefully next year at around this time we may double down to get rid of that debt as fast as possible. We'll see. Really it depends upon our jobs. Other half just watched his boss and a manager parallel to him in his group get sacked this past month, so now he is worried. Unless things get more secure and settle down, we might just stockpile cash instead in case we need to make a sudden move due to a job transition.

[SwordGuy]

@SwordGuy Wow! that's great! I hope this final sale goes through as planned.

Mostly I am joining this gauntlet because I paid off my HELOC recently. Yay! Good grief please God don't let me do anything that stupid again! We have some remodel work we would like to do, but these must be paid off in cash this time!

My next project is to look at refi rates for our existing home's first mortgage around October. I've got about one more year of holding pattern and just regular mortgage payments, and then hopefully next year at around this time we may double down to get rid of that debt as fast as possible. We'll see. Really it depends upon our jobs. Other half just watched his boss and a manager parallel to him in his group get sacked this past month, so now he is worried. Unless things get more secure and settle down, we might just stockpile cash instead in case we need to make a sudden move due to a job transition.

   

@Zamboni, I wouldn't blame anyone who depends upon wage income for stashing away cash at this point in time.   These are unsettled times.

If we were still working for a living we wouldn't be paying extra on the mortgage, we would be looking to cut expenses (refinance 'cause rates are cheap!) and stock up on cash.

[Bird In Hand]

Before July Payment $27,692
Principle Paid this month: $7,734
New Balance: $19,958

We had an extra check each this month which we diverted some to the mortgage per our plan.  Only 4 more payments to go!

~$20k and 4 payments to go -- is your mortgage payment (P&I + T&I) $5k/mo, or is that your planned monthly outlay including extra principal payments?  Either way, it will be awesome to have that huge monthly chunk off the books.

Do you have a T&I escrow account with your mortgage company?  If so, is there a lot in there?  Once we got < $20k on our mortgage, I closed the escrow account and received ~$3,000 escrow refund in a couple weeks.  We combined the escrow refund with some spare change from under the sofa cushions and just paid the thing off when the balance got to ~$14k (about 6 months ahead of our original plan).

[Comar]

I'm finally done. Feels like a million years ago, when I used to come here every day. Strange how things have changed. Good luck to the rest of you.

[talltexan]

Congratulations, @Comar, if you miss us too much, I guess you can refinance at today's super-low rates. ;-)

[Bird In Hand]

@Comar - congrats!  I'm not sure where you are in your FIRE journey, but I imagine it helps to not have that monthly P&I payment.  I know we don't miss ours!

@talltexan - I haven't delved too deeply in this, but you can't really refinance a mortgage that doesn't exist.  You could do a new mortgage with a large cash-out, but the terms are probably not going to be as good as a regular refinance.  In fact, once our balance got below $100k, I discovered that the number of potential lenders dropped significantly, and the rates were higher.  Below $50k and I couldn't find any lenders (though I didn't look very hard).

[SwordGuy]

Sold a flip house on last Friday and picked up the proceeds check yesterday.   Plan was to put that $61,000 on the mortgage.

As far as I can tell, every single Bank of America branch in a hundred miles is shut down "temporarily".

No explanation.   No expectation of when they will reopen.   Just closed.

#BankingFail!!!!

I'm off to open a checking account at a credit union.

[paulkots]

Well done everyone! Just checking in after paying off my house in late 2019.

Still loving the feeling of most of my check being left over since I have no payments, this allows me to travel more.(except for this year..)

[talltexan]

@Comar - congrats!  I'm not sure where you are in your FIRE journey, but I imagine it helps to not have that monthly P&I payment.  I know we don't miss ours!

@talltexan - I haven't delved too deeply in this, but you can't really refinance a mortgage that doesn't exist.  You could do a new mortgage with a large cash-out, but the terms are probably not going to be as good as a regular refinance.  In fact, once our balance got below $100k, I discovered that the number of potential lenders dropped significantly, and the rates were higher.  Below $50k and I couldn't find any lenders (though I didn't look very hard).

That's good info. I should have been more careful with this teasing. Based on my limited mortgage experience, it's pretty clear that purchase > refinance > cash-out refinance

[KBecks]

Sold a flip house on last Friday and picked up the proceeds check yesterday.   Plan was to put that $61,000 on the mortgage.

As far as I can tell, every single Bank of America branch in a hundred miles is shut down "temporarily".

No explanation.   No expectation of when they will reopen.   Just closed.

#BankingFail!!!!

I'm off to open a checking account at a credit union.

Do you have electronic banking?  We bank with a regional bank headquartered in our state.  Credit unions seem very wise too. 

[SwordGuy]

Sold a flip house on last Friday and picked up the proceeds check yesterday.   Plan was to put that $61,000 on the mortgage.

As far as I can tell, every single Bank of America branch in a hundred miles is shut down "temporarily".

No explanation.   No expectation of when they will reopen.   Just closed.

#BankingFail!!!!

I'm off to open a checking account at a credit union.

Do you have electronic banking?  We bank with a regional bank headquartered in our state.  Credit unions seem very wise too.

I use the online features but have resisted using banking on my phone.   Phones just aren't very secure.     There are limits to the size of the check you can cash via the phone and, as I mentioned, this was proceeds from a house sale, so it's well over those limits.

Given I don't know why all those bank branches have been shuttered I really don't feel like wiring large sums of money into what might turn out to be a void.   Why take that chance?

[KBecks]

That is very weird, and -- they aren't offering drive up, either? 

[SwordGuy]

That is very weird, and -- they aren't offering drive up, either?

No!

[Need2Save]

@Bird In Hand  - Yes that is our planned payment, not the required P&I&T&I. That would only be around $3,200.  We have slowly raised the extra principal we pay each month about $100 at a time until we got where we are now. I could pay the whole thing off now but we decided to just allow the next few months to play out, although many days I'm still very tempted.

We have U.S. Bank and I have found that they don't get many things right when dealing with them and we have a tax payment due in September from Escrow. So I'm just letting them pay that and then shortly thereafter we will pay it off in full and get the remaining Escrow back in time to make the 2nd tax payment in December.  Thereafter, we will just set aside a monthly equivalent for the taxes so we have it come time to pay next year. Then we'll be retired with no mortgage payment. yay!

[Money Badger]

@Need2Save,  Awesome job!   From September onwards, enjoy becoming the bank.  From then forever more, people pay you rent for borrowing your money.

Been free for 18 months, and it has completely flipped the tables in our favor this way.   Make it so!

[esmith2039]

Paid ours off a few weeks ago. Did the nuclear option and used a little savings to just get it done. Finally got the we're sending you the escrow letter two weeks later from US Bank. I'm glad to get rid of them for good.

[SwordGuy]

Sold a flip house we bought to help out family and put the proceeds on our new home mortgage.   Was $223k and now $173k.  :)

Hoping to sell our old home next week and put another $110k on the new home mortgage. :)   Keeping my fingers crossed!

[MaybeBabyMustache]

Our goal is to pay off half of our mortgage (leaving us with a mortgage that is 1/3 of the home's value). We are 75% of the way to that goal. (Numbers are huge, bay area mortgage.) I set monthly progress goals, & funnel all of my side hustle into this. (This is typically small eBay sales, but I love seeing the progress.)

[moneypitfeeder]

That's great MaybeBaby, our numbers weren't huge by Bay Area standards, but it was a huge amount of debt per my families standards. Feels great to not carry that monkey on my back and I'm sure you'll feel the same when you get there :)

[Bird In Hand]

Paid ours off a few weeks ago. Did the nuclear option and used a little savings to just get it done. Finally got the we're sending you the escrow letter two weeks later from US Bank. I'm glad to get rid of them for good.

Congrats!  We did the same -- used a bit of savings to finish it off a few months earlier than planned.  What are your plans for the money no longer going to the mortgage?

[soily]

I just inherited 30k and I want to use it for a house down payment in about a year. Would it be safe to pay down my mortgage with it or would it be better to put it in a money market fund? I owe 80k at 4.4%. The only other debt I have is some 2ish% student loans (~7k).

Sorry if this is out of place in this thread but I didn't want to pollute the forum with another thread that's probably been answered.

[SwordGuy]

I just inherited 30k and I want to use it for a house down payment in about a year. Would it be safe to pay down my mortgage with it or would it be better to put it in a money market fund? I owe 80k at 4.4%. The only other debt I have is some 2ish% student loans (~7k).

Sorry if this is out of place in this thread but I didn't want to pollute the forum with another thread that's probably been answered.

Paying down your current mortgage is a horrible place to put that money if you need it for a new house in a year.   That means you either won't have a down payment for a new house until you sell the old one or you'll have to pay a bank to borrow your own money back via a HELOC.    Both are crazy options.

Put it someplace where it will earn a bit of interest and won't lose value (other than to inflation).

[soily]

I just inherited 30k and I want to use it for a house down payment in about a year. Would it be safe to pay down my mortgage with it or would it be better to put it in a money market fund? I owe 80k at 4.4%. The only other debt I have is some 2ish% student loans (~7k).

Sorry if this is out of place in this thread but I didn't want to pollute the forum with another thread that's probably been answered.

Paying down your current mortgage is a horrible place to put that money if you need it for a new house in a year.   That means you either won't have a down payment for a new house until you sell the old one or you'll have to pay a bank to borrow your own money back via a HELOC.    Both are crazy options.

Put it someplace where it will earn a bit of interest and won't lose value (other than to inflation).

Thanks for the reply. I'm in my first home right now so I'm unfamiliar with the process of using the proceeds from the first house to pay for the next. I assumed it was common.

[SwordGuy]

I just inherited 30k and I want to use it for a house down payment in about a year. Would it be safe to pay down my mortgage with it or would it be better to put it in a money market fund? I owe 80k at 4.4%. The only other debt I have is some 2ish% student loans (~7k).

Sorry if this is out of place in this thread but I didn't want to pollute the forum with another thread that's probably been answered.

Paying down your current mortgage is a horrible place to put that money if you need it for a new house in a year.   That means you either won't have a down payment for a new house until you sell the old one or you'll have to pay a bank to borrow your own money back via a HELOC.    Both are crazy options.

Put it someplace where it will earn a bit of interest and won't lose value (other than to inflation).

Thanks for the reply. I'm in my first home right now so I'm unfamiliar with the process of using the proceeds from the first house to pay for the next. I assumed it was common.

The problem is that there are no proceeds until the first house is sold.   Unless you get a HELOC to pull funds out of the old house equity, you either need to get a seller to accept a contingency clause on your offer that they have to wait until you sell your old house or find a house deal that requires no down payment.   The first option will cost you money to borrow your own money and the remaining two are much harder to make work.

[SwordGuy]

Well, our old home for sale won't be closing on Monday as scheduled.   The VA appraiser took too long to turn in his report (3 business days before closing) and we won't be able to address all his concerns until tomorrow morning.   Hopefully we'll still close sometime next week. 

Looking forward to putting the $110k proceeds and another $7k in escrow against our new mortgage, which will cut our mortgage down to 25% of the original mortgage balance.   

If we can sell our remaining flip house by the end of the year we'll be mortgage free.  So close I can almost taste it!

[Money Badger]

@soily,   The way you framed a great question, it seems you want to use the full $30K windfall for a down payment, but you have a home with $80K-ish mortgage at a relatively high 4.4%.   So assuming you have some equity already; and to really get out of debt for life, you may be best off by not buying the bigger house for now.  Instead, kill the student loans TODAY...   PLUS pay down $23K of current mortgage debt... PLUS save hard to move up once you've paid off the current place.   Then you'll have a smaller future mortgage and more cash flow from zero other debts to hammer the new mortgage that way.    With feeling, you do this as in every shekel you can scrounge or dig out of the sofa cushion goes to kill that debt!   One caveat to keep in mind is mortgage originators aren't dumb to borrowers trying to break the debt shackles so they will offer best rates & fees to 1st mortgages big enough that you won't pay them off too quickly (as a lot of their compensation is on how well their loan originations pay long-term so the mortgage backed securities continue to pay coupons to people who invest so their money pays them which is where you want to be ASAFP).    They actually call people who pay mortgages early "dead beats"!   It's the dark side of the "American dream of home ownership".

Or another way to look at this if you can't wait to pay off the current place, if you are trying to avoid PMI buying a bigger house, why do you want to burden yourself with a bigger house PLUS student loan debt around your neck?    It just sells your freedom back to 2 banks again.  How quickly can you pay back the $7K with free cash flow THEN throw an entire $30K or more to get where you want to be after you really get after it?   Save hard and WIN!

[SwordGuy]

Old home got closing rescheduled for 5pm tomorrow.  So, about 19 hours until it's out of our life.

As soon as the funds become available we'll be able to pay down our new home mortgage to less than 25% of the original loan balance.

Looks like the possible buyer of the other house wandered off, so we're still in a holding pattern on it.   With luck it will sell a month and we'll soon have no mortgage.

We're getting close!

Even if it doesn't ever sell we'll be able to pay it off by December of next year.   A 2 year long mortgage isn't as great as a 10 month one, but it'll do in a pinch.

[esmith2039]

Paid ours off a few weeks ago. Did the nuclear option and used a little savings to just get it done. Finally got the we're sending you the escrow letter two weeks later from US Bank. I'm glad to get rid of them for good.

Congrats!  We did the same -- used a bit of savings to finish it off a few months earlier than planned.  What are your plans for the money no longer going to the mortgage?

Thanks and congrats also! Going to keep it simple... Going to build up our checking and savings up to comfortable level then bump our 401k contributions up to the 19,500 max. Anything extra will get thrown in VFIAX and VTSAX.

[SwordGuy]

Bought a new home last January.   Sold our old home last Friday, new home mortgage is now only 26% of what it started out at.

And we'll be at 22% in a few weeks when the escrow account gets refunded. :)

PS -- the quicken loans online payment site can't handle more than $99,999 in extra principal in one transaction...

[couponvan]

Bought a new home last January.   Sold our old home last Friday, new home mortgage is now only 26% of what it started out at.

And we'll be at 22% in a few weeks when the escrow account gets refunded. :)

PS -- the quicken loans online payment site can't handle more than $99,999 in extra principal in one transaction...

That seems like a great twitter post, but then all your friends would know.....and come after you for money.

[SwordGuy]

Bought a new home last January.   Sold our old home last Friday, new home mortgage is now only 26% of what it started out at.

And we'll be at 22% in a few weeks when the escrow account gets refunded. :)

PS -- the quicken loans online payment site can't handle more than $99,999 in extra principal in one transaction...

That seems like a great twitter post, but then all your friends would know.....and come after you for money.

We paid off our 2-homes-ago residence back around 2010-11.    None of our friends or relations hit us up for money.

Either we have a better class of friends or they just know better.

[Need2Save]

Before August Payment $19,958
Principle Paid this month: $5,252
New Balance: $14,706

[CharlesBronzee]

Paid off our mortgage today (after 21 years)!  And boy it inexplicably feels good!  :)

Will pay off also our car loan this month and will just have a $200/mo car lease on our second car left.

Now we can focus all our resources on getting to FI!

[SwordGuy]

Mortgage balance on our new home is now down to $59,999.00.   Getting close!   Should be getting over $7,100 in refunded escrow in a couple of weeks and I'm looking forward to putting it against  the mortgage balance.
   

[Money Badger]

Go SwordGuy Go!

[SwordGuy]

Thanks!   It will be below $50k by December 1st.  :)

$7100+ from escrow and $1000+ for refunded insurance.   Circa $1400 to principal for Dec payment (next one due, I'm a bit ahead).   So I need to come up with about an extra $500 by then to break that mark.

[Trifele]

Mortgage balance on our new home is now down to $59,999.00.   Getting close!   Should be getting over $7,100 in refunded escrow in a couple of weeks and I'm looking forward to putting it against  the mortgage balance.
 

Congrats @SwordGuy!  I used to do that same thing when paying down the mortgage haha -- try to get below the next milestone, even if it was just by a penny.   

[Need2Save]

Paid off our mortgage today (after 21 years)!  And boy it inexplicably feels good!  :)

Will pay off also our car loan this month and will just have a $200/mo car lease on our second car left.

Now we can focus all our resources on getting to FI!

@CharlesBronzee - way to go!  I'm on your tail. Enjoy the moment.

[SwordGuy]

Down to $58,999 from $230,000 back in January.     Will be below $50,000 before the month ends.  (Waiting on that escrow money!!!)

[CheapScholar]

Paid off the last 47k on the mortgage a few days ago. Just called the credit union to confirm that the wire transfer went through. It did and the balance is $0. 

Feels great. Paid off the house just one week before my 40th birthday. I get the reasons for NOT paying off the mortgage, but I strongly feel the psychological benefit of having the house paid off is worth it. This is probably partly because I was raised by grandparents who could recall the Great Depression, but probably more so because I was totally fucked having to enter the job market after law school during the Great Recession. I remember having no options and not knowing where my young family would live. Fuck that shit, I’ll never have to worry about that again.

Looking forward to this weekend and burning the mortgage and all the monthly statements I’ve been saving for seven years. It will be a fun Saturday night with great food off the grill and a warm fire in the backyard.

[SwordGuy]

Down to $49,999 from $230,000.    When the last house we're selling closes at the end of the month, we'll be down to about $5,000.

[LetItGrow]

Paid off the last 47k on the mortgage a few days ago. Just called the credit union to confirm that the wire transfer went through. It did and the balance is $0. 

Feels great. Paid off the house just one week before my 40th birthday. I get the reasons for NOT paying off the mortgage, but I strongly feel the psychological benefit of having the house paid off is worth it. This is probably partly because I was raised by grandparents who could recall the Great Depression, but probably more so because I was totally fucked having to enter the job market after law school during the Great Recession. I remember having no options and not knowing where my young family would live. Fuck that shit, I’ll never have to worry about that again.

Looking forward to this weekend and burning the mortgage and all the monthly statements I’ve been saving for seven years. It will be a fun Saturday night with great food off the grill and a warm fire in the backyard.

Congrats! I agree with your reasoning (I also agree with all the counter arguments also) so it’s nice that we get to choose.

[Trifele]

Paid off the last 47k on the mortgage a few days ago.

Congratulations!!

[SwordGuy]

Down to $48,999!    It's getting close!

[SwordGuy]

We're selling an un-refurbished house we bought.  Buyer's closing attorney didn't get their work done on time so closing has been delayed from 9/30 until next week.    Grrr.

We're expecting to clear about $43,000 from the sale, which will cut our $48,999 mortgage balance down by a goodly percentage.

So tired of waiting!!!

[SwordGuy]

Received the insurance refund from our old home plus my state tax refund.   Straight to the mortgage balance! 
Down to $47,318.

Closing on the other house is delayed, probably until next week.   That will remove  about $43,000 from the balance.

[Need2Save]

Before August Payment $19,958
Principle Paid this month: $5,252
New Balance: $14,706

Down to $9444.  Will call for payoff balance next week! Almost there.