Mortgage Payoff Club!!

[seemsright]

26 days!

The only reason we have to wait is because we have a prepayment penalty. But we are very excited.

[Neustache]

^congrats seemsright!! 

What was your beginning balance, and how long did it take you to pay it off? 

[plainjane]

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.

[seemsright]

^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.

[K-ice]

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!

[hdatontodo]

[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.

[Debts_of_Despair]

^^^
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.

[rjbf65]

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.

[Comar]

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.

[Neustache]

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!!

[eyePod]

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.

[Neustache]

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!

[eyePod]

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.

[asauer]

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.

[Neustache]

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.

[BlueHouse]

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)

• 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)

[Neustache]

^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.

[Debts_of_Despair]

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...

[tonysemail]

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.

[BlueHouse]

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? 

[eyePod]

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.

[tonysemail]

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?

[tomsang]

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.

[BlueHouse]

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! 

[LadyMaWhiskers]

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!

[BlueHouse]

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! 

[plainjane]

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_.

[SwordGuy]

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.

[seemsright]

Done...paid it off today!

[K-ice]

@ seemsright

Congrats!

[plainjane]

Done...paid it off today!

Congratulations!

[eyePod]

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.

[Neustache]

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. 

[Debts_of_Despair]

Done...paid it off today!

Congrats!

[Money Badger]

Done...paid it off today!

Hell yeaaaahhhh!!!

[Money Badger]

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!!

[eyePod]

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.

[Bee21]

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.

[PFHC]

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.

[Neustache]

 
[/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.

[rjbf65]

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.

[Debts_of_Despair]

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.

[nora]

Down to 140000 but have another 60000 of credit cards on 0% interest balance transfers to pay off at the end.

[Mntngoat]

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

[seemsright]

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.

[McGeens]

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).

[Neustache]

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!

[McGeens]

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!

[Debts_of_Despair]

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. ☺

[Threshkin]

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.