Author Topic: Payoff my Mortgage one year ahead of Schedule?  (Read 2335 times)

fartface

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Payoff my Mortgage one year ahead of Schedule?
« on: November 08, 2014, 09:39:30 AM »
Also posted in "Share Your Badassity" so apologies ahead of time for a double post. Wasn't sure where the best place to post this was.

Typically, I share my Badassity after I've actually accomplished a bad-ass feat; however, I'm sharing my 'badass' plan in advance because I'm interested in what MMM readers think of it.

Mortgage Situation:
I've got a $59,500 mortgage balance on my home. My plan was to aggressively pay it down over the next 14 months with a target payoff date of Dec. 2015. I BADLY want to be completely debt free - including mortgage.

After reading the Credit Card churning article on MMM, DH discovered an offer from Chase Slate: 0% interest for 15 months and no balance transfer fees. We both applied and have been approved for 20K each.

Currently, in addition to retirement accounts,  I have over 100K liquid: 45K in cash (1% savings account), 35K in a Vanguard brokerage account, plus 40K in DRiPs and 529 plans.

My plan moving forward is to use the 40K from Chase and 20K from savings to payoff the mortgage in full. I know I'll still have net debt of 40k, but have the money 'en-stache' for when the final payoff comes due in 15 months.

The minimum monthly payments to Chase will be considerably lower than my current $1640/month mortgage payment thus increasing monthly cash flow.

Am I truly Badass to be using this approach, or would you do something else with 40K "free money"?

lakemom

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Re: Payoff my Mortgage one year ahead of Schedule?
« Reply #1 on: November 08, 2014, 10:44:28 AM »
I'd just use 59,500 of my 100k liquid funds and be done with the mortgage.  Then start saving the mortgage payment in your liquid funds or use it to max out any tax deferred funds that aren't currently being maxed out.

jennifers

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Re: Payoff my Mortgage one year ahead of Schedule?
« Reply #2 on: November 08, 2014, 10:59:42 AM »
How do you pay off a mortgage with a credit card? It seems like the fees involved would make it not worth it.


Catbert

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Re: Payoff my Mortgage one year ahead of Schedule?
« Reply #3 on: November 08, 2014, 11:00:56 AM »
In your situation I might do it if I were sure that I could pay-off before 0% interest runs out.  Just carefully read all the fine print to be sure there is no catch.  I'd also not totally max out the cards just in case there is some random fee that applies.  It would be a major problem if for some reason you went over the cc limit and it negated the whole thing.

Wait, I just noticed you said "no balance transfer fee".  A balance transfer is usually (always?) from another cc.  As I said carefully read everything.
« Last Edit: November 08, 2014, 11:03:26 AM by mary w »

frugaliknowit

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Re: Payoff my Mortgage one year ahead of Schedule?
« Reply #4 on: November 08, 2014, 11:16:42 AM »
Assuming you are talking about this offer:  https://creditcards.chase.com/slate-credit-card/learnmore-apply?CELL=6RRW&jp_cmp=cc/SlateBrandExact/sea/na/ChaseSlate&adgrpID=14162641226&kwdID=13118671466&ef_id=U49AZgAABCjRZMcL:20141108180821:s

No, you are not a badass covering part of your mortgage with this.  First, this is for balance transfers.  I doubt you can apply this to your mortgage balance.  Let's say you were able to, then you lost your job or became disabled; you home is now on a credit card at a potentially very high interest rate (after 15 months).

This offer is useful if you previously got into some consumer debt and want to save a bit of money getting out of it.  For example, when I had dental surgery, I did something similar for part of the cost.

If you wanna be a badass, payoff your mortgage when you have adequate emergency reserves out of earnings and or savings. 

mozar

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Re: Payoff my Mortgage one year ahead of Schedule?
« Reply #5 on: November 09, 2014, 07:07:23 PM »
What is your mortgage interest rate?