There are two camps in personal finance: those who pay their mortgages early and those who don’t. We are in the first camp. Rather, we were. When we found out I was expecting, we took the interwebs’ advice and stopped making extra payments toward our mortgage, funneling the money into a Baby Fund instead.
Now that HP is here (and healthy!) and I’m back at work, we’re ready to make some new money moves. The one I’m most excited about is our mortgage. Have a peek:
Where We Are
When I bought our house, I took out a fixed 30-year mortgage for $214,000 at a 3.5% interest rate. We chugged along making payments for the first few years. Then, we started to get more aggressive, doubling and tripling our monthly payments as often as we could.
My initial amortization schedule puts us at owing approximately $191,000 at this stage in the game. Thanks to those additional payments, though, we have already shaved off in excess of an extra $20,000. Our mortgage is currently $167,000. But not for long.
Where We Are Heading
Before the year end, we are going to make a massive mortgage payment to the tune of $15,000. That is over fifteen times the amount of our regular monthly payment. It is the most aggressive mortgage move that we have made to date, and it will put us over $40,000 ahead of the initial amortization schedule.
By doing this, we effectively will be playing catch up with all of the months when we diverted money into our Baby Fund. So it feels like a bold move. It looks like a bold move. It will, no doubt, be my favorite debt-destroying click of my life. But it isn’t wildly out of character for our money management style.
We could pay more—and we still might in early 2018—but we have a few other boxes to check first. Our Roth IRAs are on track to being fully funded again, and we are still deciding on an amount that we’d like to hit in HP’s 529 for the year. We also have a fully funded emergency fund, but we are starting to have conversations about said fund. Though we have much more—a year’s expenses—in our emergency fund than most advise, I can’t help but feel that we need to increase it slightly now that our family has increased in size.
The Ultimate Goal
I would love to have a story about paying off our mortgage in five years. Sadly, we already crossed the five-year mark in this past fall. Instead, I aim to be mortgage free by the time I’m forty. It won’t lead to a nice neat amount of years it took to pay off the debt, but it feels right. Or maybe my subconscious is planning a mid-life crisis of epic proportions once I hit the big 4-0, and I just don’t realize it.
As much as it pains me to heft around six figures of debt, I firmly believe in working toward multiple money goals at once. Since I am unwilling to delay our retirement goals and other savings goals, the mortgage is here to stay. At least for now.
So Tell Me…What’s the biggest debt pay off you’ve ever made in one click? I’ll throw virtual confetti for you!