Last year was a good year for our mortgage. More accurately, it was a good year for making strides toward getting RID of our mortgage.
Not only did our principal dip below six figures for the first time; we also managed to put one of the highest amounts of money toward our principal ever. Thanks in no small part to the fact that interest is now such a teeny part of our bill each month.
As someone who hates my mortgage, I spend a lot of time reading posts and articles from different people sharing debt pay down strategies. Of course, not everything is easily applicable. But it’s inspiring nonetheless. (Reader, I do still vividly remember how defeating it felt a few years back to read about people paying down more money than we made in an entire year!)
Then, I got to thinking about our own debt pay down story. I realized I’ve shared a lot of the sexy numbers over the years, but there’s one number I haven’t shared yet.
This journey we are on? It all started with $39.
The Starting Details on Our Mortgage
The first thing that’s worth saying is that I actually bought our house. I was 26 years old, and I had fantastic credit. My then-fiancé (now Mr. P!) did NOT. Our original paperwork included his name but when we saw what it would do to our interest rate, I gave him the boot. Just from the paperwork. Our marriage is still in tact.
We locked in a 30-year mortgage at 3.5%. In addition to a terrific rate, we got the most motivated seller around. In fact, our tax assessor couldn’t believe that it wasn’t a foreclosure or a short sale when I called to negotiate our assessment that first year.
I made the first payment (Mr. P paid half!) at the end of January 2013.
The Start of the Journey
I lurked in the blogging world for years before I started this site. Like many people who stumble into the PF world, I found Budgets are Sexy, the blog of J$. I’d read this site for quite some time and then his post on rounding up your payments really resonated with me.
On May 28, 2015, I made our first extra payment toward the principal.
I paid $39.04.
It almost seems cute, but that small amount was so powerful. In so many ways, it was the first domino that led us to exactly where we are now.
What started as a measly $39 soon became $100. The numbers grew from there, as did our motivation.
Even though we had a mortgage, I always thought of myself as debt free when I first started blogging. Then, I realized a mortgage is, in fact, debt. And I also had a zero percent car loan, but I suppose because I had the money to pay it off whenever I wanted, I didn’t really factor it in as debt. (If this isn’t proof that truly anyone can blog, I don’t know what is.)
RELATED POST: How I Fell into Six Figures of Debt Without Noticing
Once I realized we were living with six figures of debt, we got serious about figuring out how to pay it off early. First, I would sell things on Poshmark, collecting $8 here, $17 there. Then, we started putting stipend money and other small windfalls to it.
After paying off both our cars, we put that money toward making extra payments. That worked out phenomenally until we started cash-flowing advanced degrees (gotta get those teacher raises!). And then we had a baby.
My Wildest Dreams
Our loan is set to end in August of 2042.
I didn’t pay much attention to that number when we first closed on our house, but whenever I see it now, I laugh.
It feels like something out of The Jetsons. What will I need this house for when we will all be hovering somewhere in the sky?
As soon as I became aware of how much I dislike debt (yes, it’s mathematically good, but emotionally, it does a number on me), I started to daydream with my husband about when we could actually be debt free.
The wildest dream I could imagine was to own our house outright by the time I turned 40.
After all, we were two teachers living in a fairly expensive suburb. Cutting a 30 year mortgage in half seemed almost impossible, especially after adding a baby to the mix.
What We’ve Done in Seven Years
Fast forward to today. In approximately seven years, we prepaid $91,168.66 to our mortgage principal.
This past year, we paid $30,398.90 to the principal and $3,730.62 in interest. (It’s so satisfying once you crest the point where more of your money goes to the principal!) For context, that amount is more than my husband took home at the start of his career.
Where We Intend to Go
We’re starting 2020 with $89,965.34 remaining on our mortgage (plus interest). Our payments will be $1,000 a month, like it or not, before any additional payments.
Once we max out our Roths for the year, we’ll put everything extra toward our mortgage and see where we end up.
One thing is for certain, that stretch dream of being mortgage free by 40 is all but guaranteed to be our new reality.
So Tell Me…Are you working on paying down any kind of debt? Did you have some kind of financial turning point in your life?