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Mortgage Countdown..

March 18th, 2012 at 01:17 pm

We are coming to the end of our mortgage - 8 more months and $14,000ish to go. Can't wait until it's gone! We started out in 1995 with 2 incomes, a 15 year mortgage (we put 20% down) at 7.5% fixed interest. In 2002, with 8 years left and only one income, we refinanced to a 10 year mortgage at 5 5/8% and cashed out some of our equity to buy a new car. We justified that because the amount we saved in interest paid for the car.

I realized around 2004 that, even though we maxed out DH's 401k, after losing my income (40% of the household income) we were living paycheck to paycheck. We didn't have any extra cash at all left each month. We had a 3 month emergency fund by accident with money saved before I quit my job to become a SAHM. Thank goodness we were smart when we bought our house and purposely decided what we could afford based on just DH's income - instead of letting the realtor talk us into buying "more house".

We are in great shape now. We managed to live very frugally on the one income and resisted the suggestions by our families to refinance to a longer term again. I started my new job 6 months ago so that income already feels like "gravy" to the budget. Once the mortgage is gone, that extra money will all go to savings - mostly for college for the kids.

I love to watch HGTV and find myself wanting to yell at the people buying homes with 30 year mortgages and 2% down - don't do it!! Save more money, put more down, and don't max out your budget to the point you can't save anything toward retirement!!

7 Responses to “Mortgage Countdown..”

  1. creditcardfree Says:

    How exciting to know you are so close to paying off your home!!

  2. PatientSaver Says:

    I can relate on so many levels!

    The balance on my 30-year loan is now about $8,000 and I expect to have it paid off sometime in early 2013, if not sooner. I also bought my house in 1995 (for $209,900) and financed just 55% of it; I put about $95K down in cash, which was a huge amount at the time, especially for a single woman.

    Now, I'm really glad I consistently worked to pay down that mortgage because, being very long-term underemployed after a 2009 layoff, the absence of that mortgage payment will make meeting my living expenses much easier.

    I remember also being resistant to the realtor's tendency to show me homes above my price range, which was about $175-$190. While I did end up buying considerably more house than I wanted, I really do love this house. It was very difficult at the time to find many homes with less than 2,000 s.f..

    When I finally pay off my mortgage, I'll jot down total interest I would have paid with no prepayments, and then how much I saved in interested doing the prepayments. I know it's a huge number. I may just frame those numbers!

    Notice my slogan here is Save More, Spend Less. And I mean it!

  3. ThriftoRama Says:

    I feel the same way watching HGTV! Those people are crazy! I think so many people just don't believe a mortgage can ever be paid off, that they don't even consider it when they're buying.

    Anyway, I'm am so excited for you. Dhand I were mortgage free for 5 years (Until we had to move to a different school district last year, for the kids : () and it is a life changer. It's freeing in so many ways.

    We hope to have our new place paid off by the end of 2016. I'm counting down too!

  4. Monkey Mama Says:

    How exciting!!!

    Yes, we have skipped the pre-payments with the SAH thing. We are just turning a corner where we are paying off as rapidly as when we last both worked (thank you low interest rates!). & a second job some day will mean just paying the thing off very quickly, and moving on with our lives.

    I appreciate the perspective of normal people with normal mortgages. The only perspective I have in real life is *complete insanity.* We are extra odd with our commitment to only have a mortgage we could swing on either one of our incomes. Of course, what has really slayed people here is treating their homes like ATMs. Something we certainly never understood. (I want to be mortgage free some day?)

  5. frugalgirl Says:

    creditcardfree: I'm cheering you on to a quick house sale!

    Patient Saver: I enjoy watching your mortgage balance go down each month and continue cheering you on to a good fulltime position!

    ThriftoRama: It's impressive that you had a house paid off already. I'll be cheering you on as you pay down the new one!

    MonkeyMama: Having that second income is awesome! We are focused on using it to save and not to spend which most people think is weird. I am so glad to have like-minded people on here that don't think I'm weird!

  6. Jerry Says:

    Nice going! You have a very sensible outlook on this, and it does lead to a better outcome when people are smart about their home purchase. I think there are a lot of people who want some insurance that they can have the biggest house possible, regardless of whether they can pay it off. Unfortunately...
    Jerry

  7. LuckyRobin Says:

    Mine's under 18K. It's going down slowly but surely. I'm not sending extra right now since we are planning to sell, but I put a lot of extra on it in the past and estimate I've shaved 4 years total off a 15 year loan.

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