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s/o Debt: how possible is it to pay off a mortgage?


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Who has done it? Who has paid off their mortgage? If you paid it off, how much was the mortgage compared to how much yearly income you had? Can normal people who make a modest income really pay it off? I mean, really? How quickly did you pay it off?

 

What did you have to sacrifice?

 

Does Dave Ramsey talk about paying off your mortgage early? Which book of his would tell me how to do it (if he says how)? Is there anyone else who has a book out (that I can get from the library) about paying off a mortgage?

 

I'd mostly like to hear from anyone who has actually paid it off, or is close to paying it off. And mostly I'd like to hear from you if you've done so on a modest single income.

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We did it. (Then our house burned down in February of this year and rebuilding will involve having another small mortgage for awhile.) We paid off our house in 15 years. My husband provided our only income, but it increased at a very substantial rate during those 15 years. During that time we raised and sent to college four daughters and adopted a son internationally. We lived simply, still do. BUT I don't feel that we really had to give up anything that really mattered. It can be done, but you have to decide what is important and necessary for you.

 

Susie in SWVA

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It really isn't a secret. Buy a home that you can easily afford. Put aside addional savings and pay it off in one lump payment. Or, pay an additional amount every month (to be put toward principal). The answer is really just living below your means.

Edited by Stacy in NJ
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We bought our house with paying it off quickly in mind and not the house that our incomes could afford or even close. The house cost relative to income is most important. Our home purchase prices was only about 10K more than our gross income at the time. The home needed quite a bit of work. We spent 50% of our take home income on paying down the mortage (80K gross combined income). We paid it off in six years.

 

We sacrificed purchasing other stuff with the money. This included driving old vehicles, cable, eating out, etc. The biggest sacrifice was probably a larger/better house really. I've never once regretted that though. None of it felt like a sacrifice but a choice.

 

We could not have done it that quickly with a smaller total income and our other expenses were much lower then too. Our income now is 50K gross. It would obviously take quite a bit longer now but could be done. We're spending a huge load in medical expenses that most families don't have so I know money can go out of even the tightest budgets if you don't have too much outflow in debt.

 

One thing to keep in mind though is that even modest amounts of paying down principal early in a mortgage significantly cut over-all interest and time in the life of the loan. So even the equivalent of one extra payment a year adds up. It's not all or nothing.

Edited by sbgrace
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We have not done it but hope to when/if we sell our other home in Florida. The equation is that we moved from a higher priced area to a lower priced area. The equity we have in our Florida home will cover most of the price of our house in SC. The rest we will pay off as quickly as we can.

 

That is ONE plan. The other plan is keep the Florida house as a rental as it pays both house payments and brings in additional income. BUT - we also carry two house debts. Not sure which is better.

 

Prior to this, we paid extra to our original mortgage and were seeing it go down quite a bit annually.

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Here's a calculator that you can use to determine the effect of paying a little extra each month.

 

Little bits added to your payment each month make a bigger difference than you may realize! Tax refunds (or a portion) applied are effective too. Oh, and you could pay your payment every 4 weeks instead of once a month to get 13 payments in each year (which takes years off your mortgage). Go for it! :thumbup:

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You might consider that if you intend to stay in the house for three or more years that it wouldn't be worth paying down your mortgage more quickly until you're fully funding your other long-term savings. A house is the best investment you can make and with a reasonable interest rate (4.5-5.5%) on a 30 year loan, you'll make more money by funding your retirement and other savings over the length of your mortgage than if you paid off the mortgage. If you're already funding your long term savings, don't have any credit card debt and are living well within your means, then I guess your choices would be to invest in home improvements or to pay off the mortgage. Then, it's totally up to you!

 

Dave Ramsey has good advice, but remember that everyone has a unique situation and that blanket advice doesn't apply to everyone. As an alternative and another good viewpoint, you might look at Bert Whitehead's book, Why Smart People Do Stupid Things With Money.

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You might consider that if you intend to stay in the house for three or more years that it wouldn't be worth paying down your mortgage more quickly until you're fully funding your other long-term savings. A house is the best investment you can make and with a reasonable interest rate (4.5-5.5%) on a 30 year loan, you'll make more money by funding your retirement and other savings over the length of your mortgage than if you paid off the mortgage. If you're already funding your long term savings, don't have any credit card debt and are living well within your means, then I guess your choices would be to invest in home improvements or to pay off the mortgage. Then, it's totally up to you!

 

Dave Ramsey has good advice, but remember that everyone has a unique situation and that blanket advice doesn't apply to everyone. As an alternative and another good viewpoint, you might look at Bert Whitehead's book, Why Smart People Do Stupid Things With Money.

 

Agreed that everyone's situation is different but just a warning about this idea - how many discussions have we had recently about not even wanting to open 401K and other investment statements because in the last year some have lost as much as 1/2 their value. If you have invested in your home, it makes no difference what the value of it is unless you have to sell it to move with a job or something, it is still your home and you still get to live in it with your family.

 

We bought a very small fixer upper house, lived in it for 10 years, put a lot of sweat into, added money to the principle as often as possible (I was always a sahm and we had three kids by the time we moved and my husband had just graduated and started his career when we were first married). Made the biggest down payment we could on our current house (nice, decent size on a decent lot - but definately the least expensive one we could find in the size we were looking for) and again payed extra on the principle and put any extra money or bonuses into the principle. We have never been rich by any stretch and my husband is in an industry that has been hit hard by the current downturn, but after 15 years of work we payed off our mortgage and have lived debt free ever since. It is such a relief to not have to worry about debt.

 

My sister accomplished the same thing but in a different way - they bought a small house in California and, luck played some part in it admittedly, sold it when the price was going up and moved to a state with a much lower cost of living and were able to pay cash for a house. Her husband was injured at work and they have been so glad they had no debt and were able to stay in their home.

 

The peace of mind is the best part of the whole deal :001_smile:

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If you pay an extra dollar at the beginning of a 30 year mortgage, you save something like $50 dollars of interest over the life of the mortgage (varies based on interest rate).

 

We pay an extra amount of principal anytime we can. We have a full 6 months of emergency fund and and 401K and college fund set up. We have a 30 year mortgage. We could have done a 15 year, but it would have been tight. So we pay extra when we can and months we have more expenses we don't pay any extra. Our goal is to have it paid off just as DD is going to college (only 13 years from now).

 

It is also our goal to get it paid down so that if we had some catastrophe problem we could either refinance to really low payment over a long time or pay it from a loan from our 401K. I mean only for some real bad situations like job lost, disability or catastrophic medical expensive.

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We would have paid off our first house if we had stayed in it another 5 years. (moving was the right thing to do - no regrets) We have just over 8 years left on this house. DH is a computer programmer and makes a good salary, but we are by no means rich.

 

The payment on a 15 year mortage is typically 20% higher (I think) than a 30 year, but you build equity sooooo much faster.

 

Of course, it helps to live somewhere where housing prices are reasonable.

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We paid ours off this year. My husband bought it in 1988. It was refinanced three or four times; the most recent was a 10-year mortgage (at 5.75%). We paid it off in five years. In total, it took 21 years to pay it off; it was originally a 30-year mortgage.

 

My husband's income has increased over the years, but most of the increase was in the last few years. He is self-employed. Three years ago, we started paying an extra $100 a month (our mortgage was then approx. $600 a month). We then got more vigilent about it. When my husband's business did better, we did not increase our salary until the end of the year, then we put all of the extra on the house this year, the van last year.

 

We used www.bankrate.com to encourage us to pay extra. It has great calculators for all sorts of loans, helping you see how paying extra helps, how to pay off a loan by a certain date, etc.

 

The best thing we did was stay here despite the fact that is is a small house (1,100 sq ft for 5 of us). I would say staying here has been the biggest sacrifice.

Edited by nestof3
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we never had a mortgage on our house , only on our spare block of land, which we paid off in 6 months. we just couldn't sleep with a debt.

we never had a mortgage, we just did without . My husband had enough money to buy a piece of land outright before we were married. Then we lived for I year in a tent caravan you know with canvas sides, that someone was going to throw out because it was unfix able. it was so small that we both couldn't stand up at the same time. then my husband build on weekends a really small cottage. we lived without electricity for 2 years because we had to save up for it, we have never bought any new furniture etc. the house was really too small for furniture anyway. we just kept saving and adding. we have only had a single income the whole time. when we had 5 children, we could literally no longer fit into out house. my husband and I slept outside on the veranda with a mosquito net for 2 years while he built a extension onto the house, we now live in a beautiful palace. I still don't have any architraves, or proper kitchen cupboards, or any nice furniture. but we really don't care, we have done it all without going into debt, and have even managed to save and buy a neighbouring property along the way.

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If you pay an extra dollar at the beginning of a 30 year mortgage, you save something like $50 dollars of interest over the life of the mortgage (varies based on interest rate).

 

$50???? Not even close. At 11% interest, it'd be $26.71. And you have to recognize the effects of inflation, too. At 2% inflation, that'd be $14.66 in real terms.

 

For 6% interest and 2% inflation, it'd be $3.30.

 

401K losses are ALSO paper-only losses until you cash in. There is no difference.

 

We pay extra. Not a LOT, but some. My worst fear is to be upside down--not likely, considering what we paid down, but distantly possible.

Edited by Reya
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:iagree:

 

And on top of that, you can take the mortgage interest deduction that further lowers your effective rate of interest (how much depends on your tax rate). A fixed rate mortgage at a low interest rate is a very, very good deal. The effective rate you're paying may be so low that even low risk investments (like the 30 year Treasury bond) beat it and those are usually more liquid in case of an emergency.

 

In simpler words, if your fixed rate is low enough and you take a mortgage interest deduction, you may make more on a safe investment like Treasury bonds than the effective rate you're paying on your mortgage.

 

If inflation spikes, you may have a negative real interest rate on your mortgage. That means that the inflation rate is higher than your mortgage's effective rate. That happened to my parents in the 70s and early 80s and gave their finances a real boost. But, if you don't have a mortgage, you don't get that boost in case of inflation.

 

Of course, if you have a variable rate mortgage, these comments don't apply and I'd try to ditch it as quickly as possible by refinancing or prepaying.

 

It's a great idea to be debt-free, but if you can stomach a bit of debt, mortgages are a very good deal for the typical family. Crunch your numbers and see what you can do to optimize your situation.

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We were able to pay off our mortgage for several reasons. Number one being we live in a very inexpensive area of the country. We bought a house well within our means. We did not max our what we could have borrowed and we didn't borrow on future raises. We purchased a house in Tucson right before the housing bubble and sold a year later and walked away with a very good profit which we used to pretty much purchase our present home.

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We paid ours off. First off, we didn't buy what we qualified for - meaning the most expensive we could get. We set a price that we knew we could pay off and waited until we found it. We've always lived frugally so I didn't feel that we gave that much up. Every month we would pay whatever extra we could on the principal - what a difference that made knocking down the principal. The main things for us was at that time I was still working. If I hadn't been working, we still could have done it, but it would have taken much, much longer.

 

Janet

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We're just starting out. We bought our first house this spring, and we hope to have it paid off in seven years or so. We chose a house based on the expectation that we would only have one long term source of income, and if our income continues to to increase modestly over the years, I'm pretty sure we'll be able to do it. This is a good reminder for us to sit down and make sure we're on the right track. We also don't have any other debt, which allows us to focus on the mortgage.

 

 

we never had a mortgage on our house , only on our spare block of land, which we paid off in 6 months. we just couldn't sleep with a debt.

we never had a mortgage, we just did without . My husband had enough money to buy a piece of land outright before we were married. Then we lived for I year in a tent caravan you know with canvas sides, that someone was going to throw out because it was unfix able. it was so small that we both couldn't stand up at the same time. then my husband build on weekends a really small cottage. we lived without electricity for 2 years because we had to save up for it, we have never bought any new furniture etc. the house was really too small for furniture anyway. we just kept saving and adding. we have only had a single income the whole time. when we had 5 children, we could literally no longer fit into out house. my husband and I slept outside on the veranda with a mosquito net for 2 years while he built a extension onto the house, we now live in a beautiful palace. I still don't have any architraves, or proper kitchen cupboards, or any nice furniture. but we really don't care, we have done it all without going into debt, and have even managed to save and buy a neighbouring property along the way.

 

You're my hero.

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We just paid ours off this September. Woo woo! We bought the cheapest fixer-upper cabin we could find, but one that we knew was in the area and had the potential to be what we wanted. We still live in a constant state of building, but it is so worth it. It's a mess, but it is OUR mess!

 

For a few years there we had next-to no money, but always paid extra when we could. The amount of our loan (at high interest as it was owner-carried) was about equal to 3 years of DS yearly take-home income. We paid it off in 10 years. We still have more money to put into the property to make it truly live-able, but we do that as we get it. This means huge inconvenience, like right now bathing outside under a tarp! None of our friends have to bathe outside, but when I am 40 and able to travel widely because we have expendable income (and they still have 30 years to go on their mortgage) I'll send them a postcard!

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We paid off our mortgage early in our marriage, but we have always lived simply and below our means. When all of our friends moved to nice, new bigger homes we stayed put, and payed extra each month. We had a 30 year mortgage, we often made payments twice in a month.

 

At the time we both were working full time, and we bought all our clothes at the Thrift Store, shopped using coupons, cut every corner known to man and we paid off the house. We then moved out of state, took on a mortgage, then moved back to Texas. This time we moved back to same older/but cheap neighborhood as house in Washington didn't sell. We had two mortgage payments, then sold house in WAshington and paid off mortgage in Texas. So we have not had a mortgage payment in 10 years. We still buy a majority of everything second hand, and save alot. We have helped many friends and strangers financially because we had reserve.

 

I guess before Dave Ramsey came on the market, we were living his lifestyle. I often wanted bigger/better but just would freeze at thought of a mortgage again, the fear of "what if" kept us from buying a huge new home.

Good thing that fear was there, because I don't have to work now and can homeschool the kids. Our home is modest, but pretty, and I'm busy trying to finish remodeling it. I go one room at a time and have to eventually remodel the kitchen. It is still 1949 kitchen intact except for the 1970 gold laminate countertop:D

 

My point is we live below our means, in a safe but very uninspiring neighborhood. Our neighborhood actually made the news because the vast majority here are not affected by the down turn because there homes are paid off, there cars are older and non glamorous, but they are paid off. We live in your average blue collar working neighborhood, but we also live amongst lots of others who have paid off their mortgages. I know that 2 of my 3 closest neighbors have paid off their mortgages and they are in their 40's. No one has a glamorous job but we are a neighborhood of penny pinchers who have no desire to compete with the Joneses.

 

I only know you have to start with a modest mortgage to pay it off, my cousins mortgage is for over $950,000 so I can't imagine how as a single mom she will ever pay it off.

 

I wish you well, you can do it, but you have to change your whole idea of what is a need/want. You may need to buy a very small home and make do.

Remember than in 1940 the average home was 800 sq feet and the average family had about 4 kids... times have changed. Make do with less and you can pay it down. Be tough and keep going.

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Well, if we had started Crown Financial before we purchased a house, this would NOT be a house we would have purchased.

 

There is no way we can get this one paid off in the next 15 years.

 

We do hope to sell it though. When we do we will be far more careful about the cost of the house we purchase next.

 

Our problem too is that we really do not know where we will be next......we move every 5 years or so.

 

Dawn

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Ditto what other pp have stated. Yes, it is possible, but you must live below your means and be very dedicated to doing it. We have a 30 year mortgage, but our goal is to pay it off before 15 years. We already put a little more each month to principal in our payments, then we are putting aside money and have been since we built this one, 4 years ago. Our plan is to make a big lump sum payment to principal every 5 years. We already have enough saved to take a big chunk out of it next year and this has been from my husbands's income, I started staying home with the kids after we moved!

 

We drive paid-for vehicles, I am a big coupon/deal shopper...every little bit of savings here and there can really add up if you put it aside. That's the key, if you knock $50 off your grocery bill one week, put it in savings, don't spend it!

 

I know there's a lot of controversy about paying off early vs. the tax savings, but think about not having a mortgage payment every month and putting that amount into different investments...over time it would grow much more than the tax savings each year. Not to mention the financial independence of being totally debt free...Oh what a feeling :)

 

Good luck

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...it depends on being likeminded about your goals.

 

If one person really, really hates debt and the other does not, it's really hard to get on the same page and make the sacrifices needed to pay off a house early. I have noticed that opposites tend to attract, which is probably one of the reasons that so few do this.

 

When I bought my first house, I was a single engineer. I was determined to pay it off in 10 years. I ate frozen bean burritos for dinner, and a lot of homemade lunches (very unusual in my field) and stopped skiing to stay within my budget. I never went on vacations, but I did have a happy life!

 

I stayed on track until I got together with my now DH. Ahem. See above. That is all.

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It is so inspiring to see so many people here who have paid off their mortgages. We're down to 8 years and a couple months and working hard to pay it off before that.

I think our main purpose was to buy a house we could afford. What really helped was refinancing 6 years ago to a fifteen year. At that point we had been in the house 4 yrs with a higher interest rate. When the rates drastically dropped, we refied and kept the same mortgage payment with half the term.

We have 2 car payments right now that we are paying off within the next year (hopefully, 20 months tops) then the money from those payments will go towards the house. Our goal is to have the house paid off in 5 years.

It all depends on your priorities.

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We live in a very expensive area, but refinanced to a 15-year mortgage some years back when the rates were even lower than they are now. It feels so good to see how much of our payment is going toward the balance now even if we can't do extra principle. Our balance is now about 2/5 of what we'd get for it, so it's nice to know that we have a fair amount of equity even in this market if we had to move. Even if we don't prepay, we should have it payed off about the time we have two in college.

 

Meanwhile we're working on a small car loan we took out last summer and saving for a new heating/AC system, so that's the focus right now.

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We had only 6 years left on the 15 year mortgage we had on our first house when we upsized to a bigger house. We had bought the house before we had any kids. After 3 kids it just wasn't working as well anymore. We got a nice check at closing.

 

Of course, we had a horrible time when we sold our next house. The housing and employment markets had both done a nosedive and we had to move to where jobs were. Our house sat on the market for almost a full year and we had to write a check at closing that was equal to about half of what he had gotten at our previous closing.

 

We have been in our current house for 6 years. We started off with a 30-year mortgage, but were able to refinance to a 15-year this summer. I'm hoping for this to be a forever house.

 

We have two cars, but my car is 11yo. My dh sold his 15yo truck and bought a new car on a 3-year note after he got pelted by hail and then had the radio die and the check engine light come on all in the same week.

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We'll have ours paid off in 8 years and we bought our house 5 years ago. We just put any extra we have - tax refunds, etc. toward the debt. We do live below our means and pay an extra $150 each month going toward the principal. A gift from my parents also helped a lot. Another thing that motivates me is... I keep our budget on Excel. When I make our mortgage payment, I have the payment showing what I'm paying as principal, what is interest and what is in the escrow account. It gets me all excited to see how it changes from month to month, with the interest part going down and the principal part going up. It's like a little game.

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Way back when I was single I bought a boring little box of a house. Then I got married. With 2 incomes and regular raises we could easily have upgraded. We often talked about it, but...instead we used the "extra" money to make extra payments and pay off the house. (We were close to paid off when I got pregnant, and did the rest after I quit working.) Did we give up anything? Not sure. We've always prided ourselves on driving cars into the grave (DH's last car had 283,000 miles on it). We don't eat out much. We travel (well, used to pre-kids) but know how to do it cheap. We never had the latest toys (read: only one tv, and it recently replaced the old color one that was 19 years old).

 

On the other hand, I often feel like we live a life of luxury compared to many others. And we recently moved cross-country and do have a nicer, larger house now - but we were able to pay cash for it, with the sale of our last house and savings accumulated after we ended the last mortgage. We still run cars into the grouond, still have one tv and one computer, and still rarely eat out.

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It's very possible if you choose to live below your means.
It all depends on your priorities.

 

OK, our priority is to be debt free. We do all the "right" things: coupons/sales, thrift stores (just outfitted all my dc for less than $100 for fall/winter), never eat out, don't by convenience food, paid off our van then continued to pay ourselves so we could pay cash for the next one, etc. Yet there is no way we can pay our mortgage off early...no.way. The economy has affected my dh's salary (he works for the county) and he has not received a cost-of-living raise in 3 years yet our insurance (required) has gone up and benefits have gone down. We were once $1000 below our means even w/me being SAHM w/5dc and now we are about $50 below our means. We've looked into moving to a less expensive house but in this area that would mean living off of the most busy, dangerous road where my dc could not go outside to play either due to traffic or questionable neighbors. We feel stuck. Last night we were up late trying to figure out what to do, how we can get into cheaper housing and at least have $100 or so extra/month but again, given the market and having to then sell our own house, I don't see it happening.

 

If anyone has any input on our situation I'd love to hear it. I can budget like mad, I'm almost a tightwad! Yet I can't seem to find even one bit of money extra right now for the soon-to-come medical insurance premiums much less money to pay off our mortgage.

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OK, our priority is to be debt free. We do all the "right" things: coupons/sales, thrift stores (just outfitted all my dc for less than $100 for fall/winter), never eat out, don't by convenience food, paid off our van then continued to pay ourselves so we could pay cash for the next one, etc. Yet there is no way we can pay our mortgage off early...no.way. The economy has affected my dh's salary (he works for the county) and he has not received a cost-of-living raise in 3 years yet our insurance (required) has gone up and benefits have gone down. We were once $1000 below our means even w/me being SAHM w/5dc and now we are about $50 below our means. We've looked into moving to a less expensive house but in this area that would mean living off of the most busy, dangerous road where my dc could not go outside to play either due to traffic or questionable neighbors. We feel stuck. Last night we were up late trying to figure out what to do, how we can get into cheaper housing and at least have $100 or so extra/month but again, given the market and having to then sell our own house, I don't see it happening.

 

If anyone has any input on our situation I'd love to hear it. I can budget like mad, I'm almost a tightwad! Yet I can't seem to find even one bit of money extra right now for the soon-to-come medical insurance premiums much less money to pay off our mortgage.

 

What is so great about this is that you are still financially stable. If you hadn't made all these great decisions, you might not be!

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Thank you, everyone, for replying.

 

Right now we don't have a lot of extra money and we don't do a lot of extra things. But there is wiggle room and we could cut out some of our going out to eats (about once a week) and...gee...we don't really do anything else. Well, we do have Satellite TV that we were going to get rid of once our contract is done. We already shop at thrift stores and have ancient cars that were bought used.

 

Well, I'm rambling. I just wanted to know what other people did. Our mortgage is very reasonable, but of course, we probably could have bought something cheaper (It's under $100k right now and for this area that's pretty low.) We're not going to sell and buy a cheaper house. This house is much too lovely (though it's smaller than all my friend's houses.) It's from the 40's, so it's not new, but if we bought something that needed fixing up we'd be out of our depth. We can barely keep the lawn mowed.

 

I guess I'll slowly start to gently try to pay off the mortgage faster. I can probably pay 2-3 extra payments a year. It would be great to pay it off in 10 years when the kids are ready for college. Then we could help them a little bit with college. I'm going to go to those calculator pages someone linked to see what would happen if we paid more each month.

Edited by Garga
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We do not have a mortgage. Part of how we did this was diligence and part of it was luck.

 

The diligence part was this: a) DH bought land when he was young when all his friends were furnishing apartments. ;) He lived at home and paid for his land. b) Dh built the house almost entirely himself, thus had a home worth about twice the loan. c) We paid extra money towards pricipal every month.

 

The lucky part came when the housing market went crazy and our house which already had a small mortgage for its value, became worth more than twice as much. We sold it for 5x the remaining mortgage, bought our current land, built the house on it and thus cancelled the mortgage.

 

We still would have worked little by little towards paying off the mortgage if the lucky part hadn't happened. The lucky part just made it happen faster.

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Who has done it? Who has paid off their mortgage? If you paid it off, how much was the mortgage compared to how much yearly income you had? Can normal people who make a modest income really pay it off? I mean, really? How quickly did you pay it off?

 

What did you have to sacrifice?

 

Does Dave Ramsey talk about paying off your mortgage early? Which book of his would tell me how to do it (if he says how)? Is there anyone else who has a book out (that I can get from the library) about paying off a mortgage?

 

I'd mostly like to hear from anyone who has actually paid it off, or is close to paying it off. And mostly I'd like to hear from you if you've done so on a modest single income.

 

 

We did it. Paid off a farm mortgage of just under $400K in 8 years. It meant a lot of frugality. I don't know how much you would consider sacrifice. Baby/kid things and clothes were almost all hand-me-downs. I didn't buy any clothing for about 5 years -- with the exception of a few pretty accessories. Sewed and re-sewed dh's work clothes. Didn't eat out in all that time except for anniversaries. Didn't fix up the house, except for an accidentally broken window. Grew most of our own food (and still do).

 

We counted every. single. penny. It was sometimes daunting, but we had a clear goal in mind, and were committed to it. I would recommend to anyone who was serious about getting rid of their mortgage. It is absolutely worth it. No question.

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We are really close to having our mortgage paid off. We had it down to about $20,000 but then we bought a new vehicle...(totally worth it though;))

 

We bought our duplex a year before we went down to one income. Our duplex was $84,900. My dh made around $40,000 at the time. We've lived in our place for 10 years. Since that time real estate prices have increased and our current place is worth around $250,000.

 

We have made paying off our mortgage a priority. We haven't ever had credit card debt and the only other thing we've had loans on is for vehicles. It was hard to get where we are. I don't make any money(okay a few $$ babysitting periodically but nothing close to declaring on taxes). We have had one vehicle for 8 of those 10 years. We don't go on expensive vacations frequently. We camp or go to cheap motels. The cheap motels we do every few years.;)

 

I shop thrift stores before other stores. I try to be cheap when it comes to groceries and stiff like that. We have had some substantial purchases during that time. My dh bought a new motorcycle, he bought me a really nice sewing machine, new computers, and some other stuff that I can't remember.

 

So, you can see that we have bought stuff aside from putting all our money into our mortgage. For us it's about priorities. I'd rather be cheap with groceries and used the $ saved to spend on a new computer or some such thing. Fashion isn't all that important to me so I don't spend much on clothes, hairstyles etc. We also get lots of hand-me-downs for our girls. We rarely have to buy them much for clothes, which really helps.

 

It's worth it for us to spend our money this way. We could have afforded a bigger house when we bought but we wanted to be able to live on one income. BTW a duplex is a house that shares a wall with one other house. Our main floor is 1060 sq.ft. with a full basement.

 

HTH

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This is the second house that we will pay in full in half the time. The first was a 20 year mortgage (yep, a long time ago in a galaxy far away)....but made the payments as though it was a 10 year mortgage, but actually paid it off in 7 years 2 months. That 10 year payment was almost 50% of our income, but we only had one child at the time and I was working part time, so that made a huge difference. We paid if off and moved to the next house when I was pregnant with #2. We paid that 30 year mortgage at the 15 year rate, but sold it before it was paid off, when #4 was on the way, lol.

 

Currently we have a 30 year mortgage but have been paying for it at the monthly rate for a 15 year mortgage.....so long as we keep it up we should have it paid in full in about 6 more years.

 

We do this with car loans as well.....take out the loan for the 72 months, but pay it like it was a 48 month loan. Gets it paid off before it's value is worthless in case we want to sell it, but also saves thousands in interest.

 

Some people may wonder why we didn't just get a 15 year mortgage (or 48 month car loan) to begin with.....and the reason was that while I wanted to budget for the larger payment, I wanted to have a much lower payment in the event that something drastic happened....lay offs, injuries, a long hospitalization. Those have all happened and it was a great relief to be able to temporarily pay the lower amount.

 

While paying off your house early feels great, it's not a good financial plan to be paying off a 5% house loan while you have huge balances on 20% credit cards......so definitely get those paid down or off before you start putting large chunks toward the house.

 

What we did in the first house was that every time DH got a raise instead of raising our living standards, we were happy and content as we were, so the entire raise went towards the house, which is why we paid that 20 year loan in 7 years 2 months.

 

We still don't have any other debt except the house.....our cars are quite old (1996 and 2001) but they still run so no need for new yet....but probably in a year or two. No credit card debt.....we use them to get reward points but pay it off each WEEK religiously (yes, I pay it weekly so we don't overspend thinking there is more available in the checking account than is true.

 

We live very frugally compared to a lot of people I read about, but we're ok with it. We don't have cable, we borrow movies from the library so while we don't get to see the brand new stuff in the theatres, we don't mind waiting until it comes out on DVD. We probably only own 50 DVDs and those are ones that we watch over and over and over, and typically we wait to buy them until they are heavily discounted because they aren't "hot" anymore. We rarely eat out and that saves us a ton (it's also a relatively new thing in our life, about 3 years ago we were eating out 2-3 times a week, sometimes more, so I KNOW that saves us a ton). We don't have a closet full of clothing.....I have maybe a dozen shirts to my name, the kids a little more, hubby wears uniforms so he has only weekend clothing and a couple suits bought at Goodwill (you'd be AMAZED at the newness of suits there!) So we have mortgage, food, utilities, gas, insurance, retirement and that's it for fixed expenses. We spend a bit more than average on "entertainment" by having season tickets to ballet and symphony and a live theatre company. But those are our wild and crazy nights on the town. Otherwise, we're at home each evening reading, doing some school work, watching a movie together or playing a board game.

 

Once this house is paid off we're going to put more toward retirement and college as we have college looming in 5 years and hope for retirement in about 15 when all the kids are through college. We have the matching funds from DH's employer and we'll have a pension from the military, so we should be ok. We'll likely sell the house and move to a cute little no fuss no work condo once the kids are all gone. Or, DH keeps telling them to be sure to get an apartment with a guest room as we'll just tour the country staying with each one for a few months before moving to the next.....they'd have to put us up for a few months every couple years that way, so he reckons it's not too much to ask, lol. I hope to travel so if we didn't have a home to pay for that would be cool with me....we could travel and stay with the kids when we're back in the states, lol.

 

Saving money is a committment that you have to make to yourself. It's too easy to say "next week, or next month". Pay yourself first, move it into an account separate from your checking account where you have to conciously withdraw it.......knowing that it's there if you HAVE to have it makes it easier to leave it there. It's a cushion should you have a bad month, but if you can keep telling yourself, we'll be ok without it, then you will. If you constantly dip into it for wants instead of needs it will be gone.

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We planned ahead when we bought our house. We wanted a house that we could pay off in 15 years. We got a better fixed interest rate doing it that way and we had a goal to pay off that we could see in our near future. We bought a house that fit this goal. The Realtors we were talking to were trying to talk us into a house over double the price of this one!

 

We have also paid extra at times. We used to be able to buy a CD or other guaranteed interest investment that was at a higher interest rate than our mortgage (4.75%) so when we have that option, we usually take it instead. When the interest rates tanked on CDs, we took the money when it matured, (we couldn't reinvest at a higher rate than our mortgage), and paid it on the house instead. Out goal was to maximize the interest to us and minimize it going away....simple concept, but hard to execute if your not paying attention.

 

We are also in a situation where we don't benefit from a tax write of for the mortage interest, so it is only an expese to us.

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We paid off our mortgage on the house we sold in March. We paid it off in 9 years. It was a small house with a low payment, probably 20% of our income. We made payments of 30% of our takehome pay. The way we got to that was by putting any tax refunds towards the house, any (very limited) overtime pay, any raises (if DH got an additional $50 per paycheck, we upped our mtg payment by $100 per month, for example). And after a few years, we were paying those 30% payments.

 

When we got to where we only owed about 30,000, we really knocked it out--

 

Then we had baby #3, lol--and needed to move.

 

My current plan is to ease back into paying quickly. Round up your payment to the next $100--even $25-$50 extra towards the principal each month will add up. And DH gets paid every other week--26 paychecks per year. So I budget half a mortgage payment from each paycheck.

 

SOOO on the two months per year that he gets 3 paychecks, we can make a 150% mortgage payment.

 

I hope to get this house paid off in 20 years or less; things are much tighter now with 3 children.

 

We do little games like that for cars too; we've paid cash for our last three cars--

 

Sacrifice? We don't have cable/satellite, we rarely eat out, I cook from scratch, the kids don't do a million super-fun activities, we don't go on many trips, I buy all their clothes on consigment and probably spend less than $500/year for DH and my clothes per year, together. We're not very cool at all, lol, but we're happy. I have a $30/month cell phone and dh doesn't have one--

 

Our income is good but pretty average for a professional job; dh is an engineer--

 

Good luck!

Betsy

 

 

Who has done it? Who has paid off their mortgage? If you paid it off, how much was the mortgage compared to how much yearly income you had? Can normal people who make a modest income really pay it off? I mean, really? How quickly did you pay it off?

 

What did you have to sacrifice?

 

Does Dave Ramsey talk about paying off your mortgage early? Which book of his would tell me how to do it (if he says how)? Is there anyone else who has a book out (that I can get from the library) about paying off a mortgage?

 

I'd mostly like to hear from anyone who has actually paid it off, or is close to paying it off. And mostly I'd like to hear from you if you've done so on a modest single income.

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What did you have to sacrifice?

 

 

I'd mostly like to hear from anyone who has actually paid it off, or is close to paying it off. And mostly I'd like to hear from you if you've done so on a modest single income.

 

From my divorce to paying off my mortgage was 72 months.

Everything but undies and shoes came from Goodwill

My only travel was trips to care for my very elderly parents

I pinched every penny on soap, etc

I went to no moives

I had one magazine subscription

I used an old computer my ex had built

Etc.

You get the point.

After I paid it off, my mother died and I came into a bit of money I tucked away for kiddo's college. Once that was done, I bought some name brand body soap (albeit in a large bottle at Costco). That was a first for me, and I was in my late 40's.

 

I have a life long habit of living this way if I owe anything. Thus I paid off my student loan and mortgage in less than half the time I had. Every extra penny went to debt.

 

Habits are painless. It is making them a habit that is the challenge.

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One of my sisters paid off her first house in five years and her second house in ten years. They bought houses that were less than they could afford and they lived a very frugal lifestyle. But because of that choice, they were able to spend money to fulfill some dreams, so they would definitely say it was worth it.

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We paid ours off mostly by not moving into more expensive homes as our income increased. My wife didn't want new furniture all the time, ran cars for 150K miles, didn't eat out and no cable. I've seen financially unstable house holds at all income levels, it's a bit like reverse dieting you have to take in more then you spend. My parents generation was very good at it, we're Ok at it. My Mom would tell me, "there's always a higher thread count."

 

When we started the house was a huge jump for us and we were scared, I can't tell you what the difference between our income and the price of our home.

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We do not have a mortgage. Part of how we did this was diligence and part of it was luck.

 

The diligence part was this: a) DH bought land when he was young when all his friends were furnishing apartments. ;) He lived at home and paid for his land. b) Dh built the house almost entirely himself, thus had a home worth about twice the loan. c) We paid extra money towards pricipal every month.

 

The lucky part came when the housing market went crazy and our house which already had a small mortgage for its value, became worth more than twice as much. We sold it for 5x the remaining mortgage, bought our current land, built the house on it and thus cancelled the mortgage.

 

We still would have worked little by little towards paying off the mortgage if the lucky part hadn't happened. The lucky part just made it happen faster.

 

What's that saying: Luck is what happens when preparation meets opportunity. I think you're underselling yourself by calling your situation "lucky" -- I think your dh was incredibly wise with his real-estate decisions. Hats off!

Tricia

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