Assassinate your Mortgage Loan *here*

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DaveInPgh
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Assassinate your Mortgage Loan *here*

Postby DaveInPgh » Fri Mar 15, 2013 8:20 am

I have enjoyed reading the Student Loan thread on here, but never participated because my minimal student loans were paid off years ago. Every time I saw the thread, I thought it would be could to have a similar thread for those wanting to assassinate their mortgages. Finally decided to create the thread.

I refinanced my home in July 2003 with a 4.75% fixed rate mortgage. I have paid additional principal every month since the origination, and recently decided to partially rely on our Roth IRAs for our emergency fund. Reducing our savings account to 3 months of expenses allowed us to make a $15,000 additional principal payment. Making that payment felt really good!

Our mortgage is now down to $22,642.90. If we continue with our typical monthly additional principal payments, the mortgage will be paid off by November 2014. I am determined to do even better.

I think it would be motivating to have others with the same "pay off the mortgage" goal sharing their progress. Hope this thread gets similar participation as the student loan thread.

Dave

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Re: Assassinate your Mortgage Loan *here*

Postby DaveInPgh » Mon Mar 18, 2013 1:13 pm

I just submitted an additional principal payment of $642.90 to bring the balance down to $22,000. After my regular monthly payment clears each month, I am going to make an attempt to bring the balance down to the nearest $1,000.

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Re: Assassinate your Mortgage Loan *here*

Postby frugalcoconut » Sat Apr 13, 2013 5:34 am

It's a good feeling when you get the principal balance down to a reachable threshold. Last year I paid off the mortgage on my primary residence after putting in every extra dime I could ... what a relief. Now I just have 90K remaining on an investment property (which I just refinanced) although I won't be making a dent in that anytime soon.

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Re: Assassinate your Mortgage Loan *here*

Postby DaveInPgh » Mon Apr 15, 2013 7:17 am

My thread got bumped. :shock:

Despite believing I can get a better return in the stock market, one day I just decided that I want to get the mortgage paid off sooner rather than later. I added $500 on top of our normal ($200) additional principal payment this month.

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Re: Assassinate your Mortgage Loan *here*

Postby VinTek » Wed Apr 17, 2013 8:23 pm

I will make no statement on whether I agree with this article or not, but it's certainly food for thought.

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Re: Assassinate your Mortgage Loan *here*

Postby DaveInPgh » Thu Apr 18, 2013 7:30 am

VinTek wrote:I will make no statement on whether I agree with this article or not, but it's certainly food for thought.


Thanks for sharing. Definitely some valid points in the article.

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Re: Assassinate your Mortgage Loan *here*

Postby DaveInPgh » Thu Apr 18, 2013 9:33 am

DaveInPgh wrote:
VinTek wrote:I will make no statement on whether I agree with this article or not, but it's certainly food for thought.


Thanks for sharing. Definitely some valid points in the article.


I was going to add more to this post but my boss was heading my way. Like many things in marriage, decisions on our personal finances has always involved compromise. My father inlaw believed in paying off the house asap and did not invest in the stock market at all.

When we took out the mortgage, we were contributing to our 401k at or slightly above the company match. I believe the only additional principal we did was about $30/month to round up to the nearest $100.

As our income grew, we agreed to contibute more to our 401ks AND increase the additional principal. I recall it being a challenge to convince my wife to increase the 401k contribution to 10%. We gradually grew the 401k contribution to 20% and the additional principal to just over $200.

As my mortgage balance got closer and closer to my EF balance, I started to get motivated to pay it off. Once it is paid off, the likely goal will be to max out both of our 401ks and Roth's every year.

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Re: Assassinate your Mortgage Loan *here*

Postby VinTek » Thu Apr 18, 2013 9:47 am

You can do a quick sanity check this way:

For every extra dollar you put into your 401(k), how much growth did you get? For every extra dollar you paid off in principal, how much interest savings did you get? Don't forget to reduce that amount by the sum of the tax savings you didn't get as a result.

Now which number is higher? Did you get more money by investing more in your 401(k)? Or did you save more money (net) by paying off more of your principal? I have no idea what your results will be, but it's an interesting exercise and might tell you some things you hadn't considered.

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Re: Assassinate your Mortgage Loan *here*

Postby stannius » Thu Apr 18, 2013 11:57 am

VinTek wrote:You can do a quick sanity check this way:

For every extra dollar you put into your 401(k), how much growth did you get? For every extra dollar you paid off in principal, how much interest savings did you get? Don't forget to reduce that amount by the sum of the tax savings you didn't get as a result.

Now which number is higher? Did you get more money by investing more in your 401(k)? Or did you save more money (net) by paying off more of your principal? I have no idea what your results will be, but it's an interesting exercise and might tell you some things you hadn't considered.


Have you heard of the term "results oriented thinking?"

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Re: Assassinate your Mortgage Loan *here*

Postby VinTek » Thu Apr 18, 2013 12:14 pm

stannius wrote:Have you heard of the term "results oriented thinking?"

Yes, but this isn't poker. If we went with a pure mathematical strategy, the strategy would be obvious. However, we're dealing with human behavior, which (despite what a lot of economists believe) isn't purely rational. Remember, Dave has already had a hard time talking his wife into upping the 401(k) investment. A little hard evidence in the form of actual results helps.

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Re: Assassinate your Mortgage Loan *here*

Postby DaveInPgh » Thu Apr 18, 2013 12:30 pm

VinTek wrote:
stannius wrote:Have you heard of the term "results oriented thinking?"

Yes, but this isn't poker. If we went with a pure mathematical strategy, the strategy would be obvious. However, we're dealing with human behavior, which (despite what a lot of economists believe) isn't purely rational. Remember, Dave has already had a hard time talking his wife into upping the 401(k) investment. A little hard evidence in the form of actual results helps.


Probably an exercise I should have considered early in the mortgage. Now we are so close to having it paid off, I just want to be done with it.

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Re: Assassinate your Mortgage Loan *here*

Postby DaveInPgh » Mon Apr 22, 2013 10:22 am

DaveInPgh wrote:I just submitted an additional principal payment of $642.90 to bring the balance down to $22,000. After my regular monthly payment clears each month, I am going to make an attempt to bring the balance down to the nearest $1,000.


After making my mid-month payment last week, I followed up with approximately another $350 additional principal to bring it down to an even $20,000.

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Re: Assassinate your Mortgage Loan *here*

Postby DaveInPgh » Tue Jun 18, 2013 9:09 am

I haven't been able to make additional principal payments the past couple months other than the typical $200 added to every payment. My July payment just cleared and the mortgage is now under $17,500. I am on pace to have it down to a little over $10,00 at the end of the year.

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Re: Assassinate your Mortgage Loan *here*

Postby Samantha » Tue Jun 18, 2013 11:35 am

Dave: love the idea of this thread, and I am jealous of your numbers!

We have about $55,900 left on the mortgage. At a rate of 2.55%, we're paying less than $200/month interest. Throwing about $3k/month total on this. Hoping to have it paid off by the end of 2014.

Lets race!

DaveInPgh
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Re: Assassinate your Mortgage Loan *here*

Postby DaveInPgh » Tue Jul 09, 2013 11:02 am

Hi Samantha. Thanks for joining my thread. I apologize for not responding sooner. Been in a bit of a funk lately. I recently made an additional principal payment to bring our balance down to an even $17,000. I am making our August payment on Monday, which will bring the balance under $15,900.

Due to an upcoming vacation, we probably won't be able to make any additional principal payments (other than the regular $200 each month) until September.


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