Home Payoff Project
I am not a financial adviser. This system worked for me, but it may not work for you.
We decided to get the house refinanced in the fall of 2012. Needless to say during some of the inspections and such the house just barely sits on the water table of a runoff and we are forced to have flood insurance for the duration that we have our loan. This prompted me to think about paying off our house as soon as possible because over the 15 year period that we will have our loan the insurance at today’s prices will cost us an additional $15k. I don’t want to waist $15k like this, especially since our home has never so much as had a wet basement. Thus begins our journey and project to pay off as much and as quickly to get rid of our flood insurance.
Well this project has been going along very well. So far we have put all extra funds towards our loan and are right on track. So far I have saved nearly $10k in interest. Things may slow down though, we have a very wanted baby on the way (been working on it for years) and we all know they have needs to be catered to.
It is amazing to see how many things we want but don’t need. I’m trying to keep from splurging, but its incredibly tough. I am keeping my purchases to a minimum and focusing at the job at hand, which is paying the house off.
Right on track, I took a week off this month and started some home renovations and maintenance items. I’m real happy with the way this pay off project is going so far. Having the house paid off well before retirement will lift burden off my shoulders and I should be able to enjoy my life a little more. So far we have knocked 6 years off the loan, and if we stopped paying the extra principal payments we will have it paid off in 9 years. We are going to keep going forward with this project and see if it will actually get done by October 2015.
We are ahead of schedule at this point, but we are not holding back on the payments. I have had some issues in Oct and Nov from the National Flood Insurance company stating that I need an Elevation Certificate. This apparently has been an ongoing issue that my insurance agent has been trying to deal with. I might just have to bite the bullet and get a certificate. If I do, I am going to go the extra mile and see if they can confirm that my home does not need flood insurance,but doing this, may also confirm without a doubt that I do need flood insurance. It could go either way.
Below is a GIS map showing the flood plane.
ON A SIDE NOTE
Another method to paying down your home mortgage is called Mortgage equity acceleration. If I would have known about this earlier, this is the way I would have done the paydown. If you choose to use a HELOC loan, BE CAREFUL. You still need to be disciplined with your spending when using a HELOC, and try not to get a HELOC with an adjustable mortgage rate.
The last 10k has been the worst out of all of it. If you punch a clock its exactly like the last 5 min of work, It seems like that 5 min takes 30 min. I blame it on the anticipation of being debt free. We just keep plugging away, and putting as much towards principal as we can without skimping or skipping on other bills.
I will have to say putting my wants aside for the past 18 months has been a challenge, but I did get used to it. I’m not totally sure if I will continue to live life on as little as I do, there are things I want to do, people I want to meet, and places I want my daughter, and wife to see and experience. This has been the biggest challenge in my life to date and I have put up with and experienced alot of bullshit.
Watching my coworkers and peers buy fancy cars, dress in expensive clothes, and cleaning up well has made me a little envious, but now that the house is paid off I can stop living like a college poor student or starving artist and do more with the time and resources that I have at hand.
|I documented how we were doing as we went along.
This spreadsheet is available in the excel templates on the Microsoft website.
I’m not saying the posts and projects I do are going to be over the top, but I am going to say that they will get better.
Thank goodness this chapter is over.
ON WITH THE NEXT CHAPTER