Mortgage Payoff Club!!

[BBub]

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.

[rjbf65]

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. 

[K-ice]

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.

[Debts_of_Despair]

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.

[BBub]

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.

[NoraLenderbee]

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).

[Neustache]

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!

[Money Badger]

+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!

[Debts_of_Despair]

38.2k.

33.2k.  Pretty ideal month, other than a $250 furnace repair.

[Faraday]

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.

[Debts_of_Despair]

Yeah, obsession is a good description but it's a short term project. The light at the end of the tunnel is almost blinding.

[NoraLenderbee]

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

[Imonaboat]

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.

[Debts_of_Despair]

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.

[asauer]

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!

[Imonaboat]

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!

[Faraday]

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....

[flowrider]

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

[Money Badger]

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...

[Faraday]

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!

[Neustache]

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)

[Money Badger]

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!

[Faraday]

Faraday, Very good!   Now if you'll excuse me, I'll be in my Ready Room!

[Money Badger]

Niiiiice!

[plainjane]

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.)

[Faraday]

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!

[Bee21]

Under 3k people! 2 more payments to go.

[Bee21]

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.

[K-ice]

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.

[YoungGranny]

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.

[Faraday]

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!

[Money Badger]

Under 3k people! 2 more payments to go.

So close Bee21...   Sweet freedom!!!

[YoungGranny]

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 :)

[Faraday]

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.

[Money Badger]

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.

[Faraday]

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.

[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.

$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. 

[pdxmonkey]

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.

[pdxmonkey]

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.

[pdxmonkey]

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!

[Bee21]

@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.

[asauer]

@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!

[asauer]

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).

[Neustache]

@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. 

[plainjane]

@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.

[Debts_of_Despair]

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!

[Threshkin]

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!

[pdxmonkey]

$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!

[rulesofacquisition]

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.

[K-ice]

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).