Week 12 – No More Mortgage Payments
This is a big one; we are completely debt free! This week we are officially mailing in our last mortgage payment. We will be the sole owners of our house, no more bank ownership, and we will no longer be paying interest every month… that should save us A LOT of money. I tried to find how much we have paid in interest over the past five years, but I couldn’t find the total on any of our paper work. Based on a loan calculator, if we had been making only minimal payments we would have already paid almost $20,000 in interest. However, we have been paying more than our minimum payments so our total interest paid is probably closer to $10,000 to $15,000. If were to pay only minimum payments for the full term of the loan (30 years), we would end up paying approximately $72,500 in interest. That means we are saving somewhere around $60,000 by paying off our mortgage early. On top of that, we had a 7/1 ARM so after seven years our interest rate might have gone up.
As you can probably imagine, Matt and I are pretty excited to be paying off our mortgage; however, I was hesitant to post about it here because I don’t want it to sound like I’m bragging. Matt and I have worked hard to pay off our mortgage and I want this to serve as an inspirational post, not a “look at me” post. So, here is the back story: Matt and I bought our first home in 2005 with a loan from my parents as the down payment. At the time we had both just started our “professional” careers and combined we were making around $50,000 a year. Our salaries slowly increased over the next four years until combined we were bringing home close to $80,000 a year. We put extra money into our mortgage every month and when we sold our house in 2009 we walked away with enough money to pay my parents back as well as enough for a 20% down payment on our next house.
With that 20% down payment we purchased our current home in 2010 when we moved to Texas. Since then we have put almost every extra penny possible into our mortgage payments, including some gift/inheritance money we have received. Even without the gift/inheritance money we have managed to pay off over $90,000 in less than five years. When we moved to Texas I quit my job and went back to school. That meant we faced a significant decrease in our combined income since Matt’s starting salary at his new job was $50,000. With pay raises and bonuses, Matt’s income is back up to around what we were making when we were both working, but we continue to live off a single income since I am taking this time to be with S.
All that to say, we aren’t really an abnormal family making some extraordinary amount of money compared to many other American families. We live well, but we also live well within our means which is why we are now 100% debt free! I also want to mention that we have been able to maintain a pretty decent size emergency fund for things like the new-to-us truck we are unexpectedly in the process of purchasing this week. We wouldn’t have paid off the mortgage without knowing that we had savings to fall back on for all of the unknowns that life throws at you.