Mortgage Payoff Club!!

[Money Badger]

@Tdem,  Not knowing your financial status or the reason for the prepaymemt penalty, will suggest what I know works in the US mortgage industry...

See what equity level and credit worthiness you need to refinance eventually to avoid a prepay penalty.   Save like mad to get there outside the mortgage.   Debt is an emergency.   Killing debt frees up options in your life.
Either pay off the mortgage with those savings if the math works for you... Or worst case, Refinance to a lower balance with a non-predatory lender that doesn’t penalize you for seeking early payment freedom from debt.   You may find your current lender amazingly waives the penalty when you ask for the payoff quote and tell them why by the way!   Happened to me long ago with PMI fees at least.
Do this payoff in 4 years or less.   Again, Debt is an emergency (now and waiting to happen in future)!    FWIW, I paid off $270K USD in 4 years from diverting my liquid, non-investment savings and lifestyle all towards the debt.   It simply saved my family from financial strain now that we are debt free and this downturn is upon us.   It changes your mindset vs others who panic at the downturn.   This wont be the last downturn in then world either by a long shot!   Be fearless.   Be relentless about payoff.   Get it done!   ✅

[Askel]

I found this interesting and a good argument for having a paid of mortgage:

https://www.marketwatch.com/story/heres-the-hard-truth-about-the-mortgage-markets-that-isnt-being-told-2020-04-02

[SwordGuy]

I found this interesting and a good argument for having a paid of mortgage:

https://www.marketwatch.com/story/heres-the-hard-truth-about-the-mortgage-markets-that-isnt-being-told-2020-04-02

I don't see any logical connection between your statement and the contents of that article.

Could you explain your train of thought?

[FinanceFreaky]

Thank you very much for thinking with me and sharing your thoughts. This helps!

[Gardo]

Polite DNPYMer here: I raised the issue with the other side about how they were all feeling right now. If you have no mortgage, you are obviously insulated from much of the market risk that is making people so cautious at the moment. But for those of you who are overpaying, do you plan to modify those large overpayment plans in the short term? Sincere question...

I will stay the course but only because I pay an extra on principal reduction that to me is not big enough to warrant any changes.  My mortgage is $600 a month and I pay $1,200 a month.   

[talltexan]

Thank you!

And--if I may ask--how does your $600 overpayment compare to the amount you're putting into retirement investments?

[Need2Save]

Before April Payment $43,333
Principle Paid this month: $5,197
New Balance: $38,123

[SwordGuy]

Received a written offer for our old house late last night.   That's one mortgage that will be paid off in about 40 days.   :)

Depends on what the market's doing as to whether we take the proceeds and put it on the new mortgage or buy stocks.   If stocks are cheap enough, we'll buy and then pay off the new mortgage in a couple years with the recovered value.    If not, we'll knock 44% off our new mortgage. 

[BlueHouse]

Polite DNPYMer here: I raised the issue with the other side about how they were all feeling right now. If you have no mortgage, you are obviously insulated from much of the market risk that is making people so cautious at the moment. But for those of you who are overpaying, do you plan to modify those large overpayment plans in the short term? Sincere question...

I've only been paying a little bit over (because I like round numbers).  I'm very happy that I paid a lot down early and recast because now my payment doesn't scare the crap out of me. 
I did actually reduce the amount of overpayment even more though, mainly because I have always kept a (way too high) cash reserve and I FINALLY put it in the market in January.  Now I'm reeling from that and I want to build up my e-fund again.  I'm super cautious and I like to have a lot of cash on hand. I'm still maxing out all tax-advantaged accounts, and I've also pledged that anything over my tax-advantaged accounts will go to charitable causes this year - not all will be tax deductible or even traceable, but in addition to outright donations, I'm being super-generous with buying things from local businesses and tipping, etc.  I still save a shit-ton in 401K, so it's really just icing on the cake that goes to others. 

[talltexan]

Thanks for answering.

There was a nice post on Financial Samurai about how being mortgage free makes him feel like he can invest in riskier stuff.

Link: https://www.financialsamurai.com/no-mortgage-more-courage-pay-off-all-debt-before-retiring/

It may seem annoying now, but your January investment won't look too different from a march investment by the time you reach the finish line. My wife and I put $6,000 into her Roth as one shot every year (backdoor), but we delayed that contribution from January to April because of other needs for the cash early in the year. It's just one year worth of contributions out of her (so far) thirteen.

[SwordGuy]

Thanks for answering.

There was a nice post on Financial Samurai about how being mortgage free makes him feel like he can invest in riskier stuff.

Link: https://www.financialsamurai.com/no-mortgage-more-courage-pay-off-all-debt-before-retiring/

It may seem annoying now, but your January investment won't look too different from a march investment by the time you reach the finish line. My wife and I put $6,000 into her Roth as one shot every year (backdoor), but we delayed that contribution from January to April because of other needs for the cash early in the year. It's just one year worth of contributions out of her (so far) thirteen.

I think that guy has turned into a click-bait whore and a whiny one at that.     

[BlueHouse]

It may seem annoying now, but your January investment won't look too different from a march investment by the time you reach the finish line.

I don't think that's quite true in my case.   In January, I dropped over $90K into investments ($50K was a payback from a loan, $40K was last year's max profit share into 401K and $7K into Roth.  In Feb, I tipped into the $2M liquid club and was seriously considering pulling the plug this year ahead of schedule.  So I was really really close to the finish line.   Still, if I don't change anything, I could prob still retire in 2 years (2022 is my goal) and by then if the market recovers AT ALL, I should have more than I will need -- assuming the insurance quandary becomes more settled. 

[nereo]

Thanks for answering.

There was a nice post on Financial Samurai about how being mortgage free makes him feel like he can invest in riskier stuff.

Link: https://www.financialsamurai.com/no-mortgage-more-courage-pay-off-all-debt-before-retiring/

It may seem annoying now, but your January investment won't look too different from a march investment by the time you reach the finish line. My wife and I put $6,000 into her Roth as one shot every year (backdoor), but we delayed that contribution from January to April because of other needs for the cash early in the year. It's just one year worth of contributions out of her (so far) thirteen.

I think that guy has turned into a click-bait whore and a whiny one at that.   

you beat me to it @SwordGuy - once upon a time he had good financial information backed up with comprehensive math.  That was kind of his whole schtick... showing how various financial decisions panned out with realistic numbers.
Lately he's put out several click-bait articles which were so flawed with their assumptions as to be completely ludicrous. He's also discussed his efforts to monetize his blog more, and it appears this is how he is doing it.

[moneypitfeeder]

So I just made my second to last mortgage payment (woot woot), I've found I have very few people that I can share this info with. Most of my friends/co-workers are all stuck feeding the mortgage beast and never have a paid-off house. I realize that many here feel it is better to invest than payoff a home, but all my stocks are in the crapper right now, and I feel great that next month we can request our payoff. Hope you all "in the club" are doing well and that the CV hasn't put a damper on your plans to payoff!

[Buffaloski Boris]

So I just made my second to last mortgage payment (woot woot), I've found I have very few people that I can share this info with. Most of my friends/co-workers are all stuck feeding the mortgage beast and never have a paid-off house. I realize that many here feel it is better to invest than payoff a home, but all my stocks are in the crapper right now, and I feel great that next month we can request our payoff. Hope you all "in the club" are doing well and that the CV hasn't put a damper on your plans to payoff!

Congrats! Given the fairly low expected returns for stocks going forward, mortgage payoff may well become more fashionable.

[moneypitfeeder]

Thanks Boris! I hope you and your family are doing well, and are still on your planned track!

[Trifle]

So I just made my second to last mortgage payment (woot woot), I've found I have very few people that I can share this info with. Most of my friends/co-workers are all stuck feeding the mortgage beast and never have a paid-off house. I realize that many here feel it is better to invest than payoff a home, but all my stocks are in the crapper right now, and I feel great that next month we can request our payoff. Hope you all "in the club" are doing well and that the CV hasn't put a damper on your plans to payoff!

Congrats @moneypitfeeder!  Nearly there!

[Steveray7071]

I've had my current mortgage since 6/1/2013 - $235K

1/1/2019 - 191K
4/1/2019 - 178K

Goal is to pay off by 8/1/2020.

Currently at $168K

Putting $30K on this week (sale of a property).

EOW: $138K

Down to $75K!

Down to $13K!

8/1 is going to be tight, I should be able to do it, if not it'll be later in the month

[SwordGuy]

Had my old home under contract for sale on 6/8/2020.    Buyer backed out. :(

I was so close to paying off the old mortgage and cutting the balance on my new house mortgage by 40%.   

Damn.

Still hoping to get it sold this year and the new mortgage paid off by 12/31/2021.

[moneypitfeeder]

@Steveray7071 that's awesome, hope you meet your goals, and to @SwordGuy I'm sorry your buyer backed out, hopefully you'll get a new stronger offer!

[Buffaloski Boris]

Thanks Boris! I hope you and your family are doing well, and are still on your planned track!

We're doing well, thanks.  I almost hate to admit it given the amount of suffering out there, but we're doing pretty darn well under lockdown.

Now I've got to chuckle about the planned track: it implies that I have one.  I do have a planned track, but it's sort of like the "Pirate Code" in Pirates of the Caribbean. And always subject to change.  Part of the reason I've been sniffing around POYM of late.  I don't like debt, hard stop.  But with a locked in 30 year mortgage that's in the mid-threes, it's been tough for me to justify attacking it. 

Happily, sacred cow is back on the menu!  Lessee.  We're looking at forward PEs for the SP 5+495 above 20.  We're also looking at short term deflation, not inflation.  Oh, and the tax law has rendered mortgage interest mostly or entirely nondeductible for most/some of us. The stars seem to be aligning pretty well for a POYM strategy. 

[Need2Save]

Before May Payment $38,123
Principle Paid this month: $5,209
New Balance: $32,914

[SwordGuy]

Before May Payment $38,123
Principle Paid this month: $5,209
New Balance: $32,914

Getting Close!!!

[Need2Save]

Before May Payment $38,123
Principle Paid this month: $5,209
New Balance: $32,914

Getting Close!!!

Don't I know it!  We were going to pay it all off in July, but it looks like November now.  Just six more payments to go!

[SwordGuy]

Received a written offer for our old house late last night.   That's one mortgage that will be paid off in about 40 days.   :)

Depends on what the market's doing as to whether we take the proceeds and put it on the new mortgage or buy stocks.   If stocks are cheap enough, we'll buy and then pay off the new mortgage in a couple years with the recovered value.    If not, we'll knock 44% off our new mortgage.

Buyer backed out.   They got scared off by a badly written home inspection report.   

We're a couple of weeks away from officially putting it on the market at a higher price (after having spent sweat and money to prissify it for picky buyers).

Our realtor says there's a shortage of homes on the market for sale and there's still a good demand for them, so that's good.

I was so hoping to have paid off our old mortgage next week and knocking 44% off the new one.    Oh, well.

We'll be closing on a couple of non-profit flip houses, one in about a week and the other in a month and a half.   One's owner financing and we won't get our full capital back on it for a few years.   Hoping the other will be bought using bank mortgage so we get our capital back and can put it on our new mortgage.  If so, that will enable us to pay 27% off our new mortgage.  (Plan is to be done with all mortgages in December of 2021 or earlier.

[moneypitfeeder]

Just got my pay-off statement, calling the bank tomorrow for an appt. to get a certified check (slight PITA, the girl I spoke to on the phone said a regular check would be fine) our credit union is only open for appointments. Happy to finally own my moneypit outright :)

[Trifle]

Just got my pay-off statement, calling the bank tomorrow for an appt. to get a certified check (slight PITA, the girl I spoke to on the phone said a regular check would be fine) our credit union is only open for appointments. Happy to finally own my moneypit outright :)

Congratulations -- Enjoy your pay-off appointment!   Any celebration planned for after?

[iluvzbeach]

Today marks the three year anniversary since our payoff and we’ve never once doubted our decision to go mortgage-free! It’s really incredible how low monthly expenses are without a mortgage payment and how much our stash has grown, now that we plow so much more into investments.

[LetItGrow]

Today marks the three year anniversary since our payoff and we’ve never once doubted our decision to go mortgage-free! It’s really incredible how low monthly expenses are without a mortgage payment and how much our stash has grown, now that we plow so much more into investments.

I think we are also right at three years. Though we did just move and took a mortgage as we went through the relocation process, we should get the buyout money from our old place later this week and we already have the mortgage payoff statement so will Be back to officially mortgage free by the end of the month.

We are right at twenty years out of school, so even though we have moved six times since then, we kept paying and paying and staying somewhat even in house value, so it makes sense that we would be pretty close to zero balance. We actually will make a bit on this recent one so it will also go right into VTSAX. It’s crazy to see what that account has grown to in three years.

[moneypitfeeder]

Just sent my last payment in, bought in 2009 on a 30-yr, re-fi'd in 2013 to a 15-yr, been overpaying since. Spreadsheets and math be dammed, the peace of mind is priceless. We are now able to test our RE plan, since my income was really only needed to foot the mortgage bill, SO's pension by all calculations will be enough for the 2 of us, and our investments are cushion for later. We are starting our "trial" RE now before I officially hang my hat. With that large of a monthly bill gone, we have much more freedom with what we bring in, and the pension stretches much farther.

[Trifle]

Just sent my last payment in

Congratulations!!!

[moneypitfeeder]

Thanks!

[Buffaloski Boris]

Just sent my last payment in, bought in 2009 on a 30-yr, re-fi'd in 2013 to a 15-yr, been overpaying since. Spreadsheets and math be dammed, the peace of mind is priceless. We are now able to test our RE plan, since my income was really only needed to foot the mortgage bill, SO's pension by all calculations will be enough for the 2 of us, and our investments are cushion for later. We are starting our "trial" RE now before I officially hang my hat. With that large of a monthly bill gone, we have much more freedom with what we bring in, and the pension stretches much farther.

WooHooo!  Congratulations!!!! I bet it’s a great feeling.

[Money Badger]

Way to go moneypitfeeder NO-LONGER!   Awesome!!

[Need2Save]

Just sent my last payment in

Congratulations!!!

Awesome! So happy for you. 

Before June Payment $32,914
Principle Paid this month: $5,222
New Balance: $27,692

Hoping for five more months here.

[moneypitfeeder]

Stick with it @Need2Save, you don't have that much more to go :) (and thank you!)

[K-ice]

Oops, sorry if I was not clear. There are three options:

• The mortgage will be paid off in 25 years (if we don't take any other actions).
• If we pay off 10% extra per year, it will take us 5 years to kill the mortgage
• If we pay off more than 10% extra per year, it will take us 4 years to kill the mortgage. Then we also have to pay a fine for every extra payment above the 10%. The good thing is that we are rid of the mortgage sooner.

I would pick option 2 without the hassle of fees.

Also, double check. My friends CIBC mortgage allows for double payments per month as well as once a year 10%. That might help you get paid off faster.

Also be sure you don’t have mortgage Payoff blinders on. I wish I had taken it a bit slower & maxed my TFSA & RRSP along the way.

[Steveray7071]

I've had my current mortgage since 6/1/2013 - $235K

1/1/2019 - 191K
4/1/2019 - 178K

Goal is to pay off by 8/1/2020.

Currently at $168K

Putting $30K on this week (sale of a property).

EOW: $138K

Down to $75K!

Down to $13K!

8/1 is going to be tight, I should be able to do it, if not it'll be later in the month

DONE!!!  Officially paid off the house!!!!!!!  WOOT WOOT!!!!!

[iluvzbeach]

Woo hoo!! Congratulations!

[Buffaloski Boris]

I've had my current mortgage since 6/1/2013 - $235K

1/1/2019 - 191K
4/1/2019 - 178K

Goal is to pay off by 8/1/2020.

Currently at $168K

Putting $30K on this week (sale of a property).

EOW: $138K

Down to $75K!

Down to $13K!

8/1 is going to be tight, I should be able to do it, if not it'll be later in the month

DONE!!!  Officially paid off the house!!!!!!!  WOOT WOOT!!!!!

YESSSSS! One less debt-slave. Congratulations!

[couponvan]

That is some impressive payoff timeline!

[Trifle]

Congratulations @Steveray7071 !!!!

[Need2Save]

All Right! Yippee! @Steveray7071 !

[honeyfill]

I paid off my HELOC yesterday.  I went to the bank and paid the last $818 to take the balance down to zero.
I'm  not sure if this counts as a mortgage payoff but it still feels pretty good!

[talltexan]

Congrats!

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

[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.