The Simple Life vs Mortgage Payoff

[thegarman]

Quote:

Originally Posted by rescueme Hopefully, you instructed the lender that the excess was to be applied against the outstanding balance, not to be considered prepament of future monthly payments. Sometimes, lenders do not execute the application of the "extra money" in the manner you wished (been there, done that)...

Yes,

The extra came right off the principal, and was thus reflected on the statement we just received

Now we just need to keep plugging away.

[KB]

I agree with the previous poster. Doublecheck your balance each month after making those large payments. When I paid my mortgage down as you are planning on doing, even though I indicated that the extra was to go to principal.....it wasn't always applied correctly. They applied the extra $$ as future payments paid in advance.

I think you have a good plan to get the mortgage paid off and keep a healthy emergency fund.

[sheehs1]

Quote:

Originally Posted by brewer12345 I would either keep the cash in savings or invest it as you see fit. More importantly, I would refi ASAP. I believe that Pen Fed will do a no cost 10 year home equity loan at 2.99%.

+1
I agree with brewer
Cash = more freedom regardless of the mortgage situation. Keep saving and investing and eventually your "cash" will generate you a nice sum of money each year. Compounding returns adding savings on top every year= success. It will grow fast.

You are only 42 with plenty of time to pay the house off...especially if you refi to a lower rate.

[Sesq]

I would have done option A. I would have then opened a no-fee HELOC as an additional backstop.

[thegarman]

OP checking back in and giving a status update: 1-30-12

Ok, we just sent in the January payment. This month we managed to pay just over $5000. Its now been about three months since my original post. We have paid large amounts in November, December, and now January.

The payoff is now down to $29,900. Our unofficial goal is to maybe be paid off by Memorial Day, but no rush.

(As a side note, we put a little less on the Mortgage this month then planned, because I also put $1500 in my IRA)

Keep Saving!

Gar

[Huston55]

Quote:

Originally Posted by thegarman OP checking back in and giving a status update: 1-30-12 Ok, we just sent in the January payment. This month we managed to pay just over $5000. Its now been about three months since my original post. We have paid large amounts in November, December, and now January. The payoff is now down to $29,900. Our unofficial goal is to maybe be paid off by Memorial Day, but no rush. (As a side note, we put a little less on the Mortgage this month then planned, because I also put $1500 in my IRA) Keep Saving! Gar

Well done!

Keep it up and you'll make your Memorial Day goal.

[Surewhitey]

Since we were in your shoes in 04', this is what we did. Paid it off and were broke for 1 month. Every month you will have $2,500 to pick up the slack of emergencies (btw, buying a new car is not).

You can float 30 days on a cc if you absolutely need to for the first month. Since you both work, there's even less risk of total loss.

I'm not against the $31k / 10k split idea, you'll pay off the other $10 in 4-5 months anyhoo.

You will feel so amazing for many years after paying it off, for sure.

[kz]

I love the plan you decided on, Garman. Memorial Day will be quite "memorial" for you now won't it?? Congrats!!

[thegarman]

I apologize in advance for "bumping" this thread monthly, but this thread has become a valuable monthly tool for me to track progress.

So, without further delay:

Last night we paid the monthly mortgage payment (actually due this Thursday). This month, we dug pretty deep, we really scrapped and were able to apply a whopping $6000 to the mortgage. Much of it saved because it was a cold quiet month here in Pennsylvania, where honestly I didn't do anything to spend my paycheck. The remainder came out of the savings, as planned.

Without having the numbers in front of me, I think this brings the payoff down to $24,000 and change. I will check the numbers tonight, after the payment hits.

You guys have no idea how much it hurts to see this money go out every month. (It hurts, bad). However, now that we have made this priority #1, it does feel good to see the payoff number getting smaller every month.

Untill next month!

Gar

[Sarah in SC]

garman, I can remember keeping the receipts from the bank taped together in a long line in our home office, as the balance dwindled each month. The excitement that you are feeling is truly awesome!
When we had our mortgage burning party, I pulled out that long tail of receipts to show our friends and family, as a way of describing the cumulative efforts that went into the whole effort.
Good for you!

[thegarman]

Quote:

Originally Posted by Sarah in SC garman, I can remember keeping the receipts from the bank taped together in a long line in our home office, as the balance dwindled each month. The excitement that you are feeling is truly awesome! When we had our mortgage burning party, I pulled out that long tail of receipts to show our friends and family, as a way of describing the cumulative efforts that went into the whole effort. Good for you!

Thanks so much! I love your story. It is inspiring to hear stories of how others triumphed over the dreaded monthly payments. Hmmm, a mortgage burning party, now that sounds like something I need to do.

G

[Dreamer]

I can still remember the excitement that I felt every month watching the amount that we owed on our house going down. It seems like paying off the house was the last big goal that I had. I am so glad not to have a house payment or any debt.

[Walt34]

Quote:

Originally Posted by thegarman You guys have no idea how much it hurts to see this money go out every month. (It hurts, bad). Gar

Some of us do. The payoff is Zero Debt, a wonderful place to be.

[Surewhitey]

Been 7 years since we crossed the line... Still remember that feeling and would do it no different today.

[thegarman]

Ok, Its DONE.

A couple things happened last week, so I simply went and paid the mortgage off.

First, We were being so "frugal" lately that the money was actually adding up a little faster then we thought. Second, I had just decided to sell some items on ebay, and as that money was rolling in, it just all started to click.

A little quick math, and we figured we were close enough!

Now, I should tell you, Wells Fargo didn't make it easy. The only two methods of "final payment" they would take are :1) An overnighted cashiers check or: 2) a wire transfer to their office.

So once we made the phone calls, and verified all the amounts, I went to my local bank, and wired over the outstanding balance. (Wells Fargo supplied all the account and routing numbers).

The next day, I called to verify they received the funds (they had), and yesterday, we received our "congratulations" letter in the mail.

One nice thing they are doing, is assisting with information on my taxing escrow, as well as info for our insurance. (Both of which were escrowed, and we are now responsible for paying directly)

When the dust settled, we still have about $5000.00 in "emergency" funds left in the bank.

Yea, so its done. No more mortgage! Add to that that we still have no car payments or credit card debt, and I feel pretty good about setting up for a nice run at ER.

Finally, thanks for those who have followed this thread for the last 5-6 months. I hope you draw some inspiration from our journey.

I'll check back in from time to time.

Thanks again!

Gar

[Sarah in SC]

Fantastic news, Gar! We know how awesome that feeling can be and I hope you'll have a (suitably frugal) mortgage burning party (with a copy, not the original). We had a blast with it, and I feel/hope we inspired some of our friends that it is possible to be mortgage-free.
Enjoy the feeling, next month and for a long time, of not having to send them a check!

[thegarman]

Oh, one more thing! Now that we are paying the insurance out of "our pocket" so to speak, our next move toward saving money is to shop our insurance around a bit. Possibly bundling it with our "auto" as well to save some money this summer.

[Sarah in SC]

I get mine quoted through a broker every other year, looking for savings. We've been on the pay it out of pocket plan for a long time, so it is always top of mind. A broker can sometimes find you a bundle plan for the auto and homeowners. And don't forget to raise those deductibles! And if you are young(er), get new quotes on the term life insurance every now and again.

[harley]

Quote:

Originally Posted by thegarman Ok, Its DONE. A couple things happened last week, so I simply went and paid the mortgage off. First, We were being so "frugal" lately that the money was actually adding up a little faster then we thought. Second, I had just decided to sell some items on ebay, and as that money was rolling in, it just all started to click. <snip> When the dust settled, we still have about $5000.00 in "emergency" funds left in the bank.

Depending on the amount you sold on eBay, you may need some of that emergency money to pay taxes. The IRS is starting to track and target eBay sellers. Just fyi.

But congratulations on paying off the mortgage.

[Huston55]

Congrats Gar! Well done!

Now, you should check in from time to time and tell us how you're saving/investing all the $$$ that used to go for mortgage payments.

Cheers.