Mortgage Paid Off!

Well the deed is done! We did it, we paid off the mortgage! We scrimped, saved, sacrificed and dreamed for two years about the possibility of killing the mortgage and we did it! We know there are a lot of people out of work and struggling just to pay their bills let alone try to get "ahead". We got fired up to become debt free after two "reorganizations" and staff reductions got us thinking, "What if it happened to us?"

We sat down and decided to forgo some wants and some fun stuff in the short run to get our financial house on solid ground. We found ways to cut some costs and reduced our spending on food & clothing to create some extra cash. We took any extra cash along with bonuses and some side income and threw it all at the mortgage.

We severely restricted our use of a credit card (except for set expenses) and paid cash for nearly everything; if there was no cash allocated for it we didn't do it!

We continued to give to our church, never went without because the Lord made everything go farther! We went on two family vacations to the beach, a 3 day cruise & most importantly He blessed our efforts and allowed us to take a mission trip to Romania and remain on track with our plan!

You too can accomplish this, be weird, "live like no one else so one day you can live like no one else."

My new mantra, "There is no such thing as good debt!"

Goodbye Bank of America

Bank of America is now starting to charge fees based on the date that people pay their mortgage; no fee for the first few days, $3 for the next few and then $6 for the balance of the "grace" period. A bunch of people are up in arms about the new fees. Honestly, I never paid any attention to it because I always pay my mortgage on the due date - the 1st of the month .

I get that sometimes you might need a few days to get the payment to them but in my opinion that should be the exception rather than the rule... I guess there are "smart" money managers who know how to use every deadline to their advantage but, seriously with the paltry interest rates being paid for savings accounts you can't be talking about a lot of money. I just want to pay it and be done with it and not have it hanging over my head.

I have this suggestion for those smart money managers - quit spending so much energy trying to delay the payment and instead look at ways to find additional money to throw at the principal balance of your mortgage. My wife and I have gotten serious about paying off the mortgage company and becoming debt free. We are almost there!

I have come to understand that there is no such thing as "good debt"!

AND THEN THERE WERE TWELVE - REVISITED

In my blog post last May I wrote about our decision to accelerate the payoff of our mortgage. We had experienced a couple of financial close calls with our jobs and wanted to position ourselves in a less vulnerable place. We looked at the remaining balance of our mortgage and decided to throw everything we could scrape together at the principal balance of our mortgage. In May our goal was to pay off our mortgage by June 1, 2011.

Here is our update: We are nearing the end of 2010; we have revisited our goals and adjusted the date we think we can make the final payment. Our loan balance has been reduced to $26,250 and our revised goal is to cut it down to $20,500 by the end of the year. This will exceed our original goal by $4,500!

We are now looking at our last mortgage payment being May 1, 2011. This is a mere six months away and it will continue to require a significant sacrifice on our part. There is no guarantee that we won't have a setback that may require an adjustment but Lord willing we'll be celebrating with our last payment on May 1, 2011!

AND THEN THERE WERE TWELVE!

In January of 2009 after my wife and I experienced a couple of close calls with budget cuts and staff reductions we decided to take charge of our financial future and get serious about paying off the mortgage on our home. We looked at the balance owed on our mortgage ($106,755) and the remaining term (23 years) and decided to take as much of my salary and any "extra" money we could find and throw it at the principal balance of our mortgage. Our goal was to pay it off by the end of 2013.



We wanted our goal to be significant, manageable, achievable, realistic, and time-bound.



Significant - Paying off 106k in 5 years is a significant debt reduction.

Manageable - We felt that earmarking much of my salary was manageable.

Achievable - 5 years would be a major commitment but something that was achievable.

Realistic - No matter how you look at things on paper there are going to have to be adjustments and setbacks, so we planned for the "unexpected".

Time-Bound - We set a deadline to help us remain focused on our goal.



The first three months we struggled to find an extra $700 but then things began clicking! A bonus, a tax refund and another nice check had us on our way! By the end of 2009 we were fortunate to pay an extra $36,184 toward the principal! This left us with a balance of $65,000 at the beginning of 2010.



Regarding our goals; we felt we had met each one and significantly exceeded our expectations for the principal reduction. One really exciting thing was when the amount of principal became greater than the amount of interest paid with the regular payment each month.



So here we are nearing the middle of 2010; we have revisited our goals and adjusted the date we think we can make the final payment. Our balance has been reduced to $45,194.16 and our goal is to cut it down to $25,000 by the end of the year.



We are now looking at our last mortgage payment being June 1, 2011. that's still twelve months away and will continue to require a significant sacrifice on our part. There is no guarantee that we won't have a setback that may require an adjustment but Lord willing we'll be celebrating with our June 1, 2011 payment!