Money Matters
sparklerose
member
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
If you have a paid off mortgage
How did you do it? How long did it take you from the time you purchased your home? If you dont mind sharing more info (like price of home, your age) I'd love to hear it!
We are planning to buy our first home next summer, we are both 34. We will put 5% down and plan to pay it off in 15 to 20 years. Price of home will be around $250k
Re: If you have a paid off mortgage
We live in a low cost of living area. Our house we live in now was $130K, my husband put a huge chunk down (like 40k) and after we moved in and got married we were doing triple payments. We also ended up moving to Singapore for 6 months, which helped with this process a lot- the company paid for all expenses while we were over there, so we were able to bank a lot and add another huge chunk to the mortgage when we got home. We paid this house off in 2 years.
We also have a rental house (my house before we got married). I bought this for 75K and had to put 10k in to make it livable (foreclosure). This was our only debt, and so we were paying 2900 a month on the mortgage. 900 was from the renter, 2000 was from us. This house took longer to pay off, because while I was single I was only managing an extra payment a year, plus 50 to $100 here and there extra. It took us 7 years.
I would say buy a house you can comfortably afford (the bank pre-approved me for $140K which I thought was crazy on my teacher salary) and pay any extra you can towards it each month. One simple thing to do- especially if you get paid every 2 weeks, would be to make a half mortgage payment every two weeks. You get in an extra payment every year just by doing something that simple. We did this with my husband's 'bonus' checks (those months you get 3 checks instead of 2) That all went towards one of the two houses.
I'm 28 and my husband is 37.
I usually don't share with people that I have a paid off house and how it happened because people will judge. and by people I mean those I know in real life.
My first DH and I bought the house in 2006 and got married that year. We had some issues in our marriage to say the least and I filed for divorce in august of 2007. In october of 2007 he passed away from a cocaine overdose so I was in charge of the mortgage then. I had moved out and in with my parents when I left him 6 months prior. It wasn't until after he passed that I learned what a great job he had and what a large life insurance policy his job gave him. It was the exact amount that was left on our mortgage. Once I had the money in my hands I wired it to the mortgage company and paid it off. I also used some of my inheritance to pay off a private school loan I had. I would have paid off my federal school loan but that would have required me to take it out of his retirement and get taxed on it. CPA's I've talked to talked me out of doing that and I'm glad they did because I rolled it into my retirement and have been building on it.
What you still have to keep in mind about paying your home off are the bills that you still have to pay once a year. Property tax which for our home is about $2,700. That includes the county and city. And Home Owners Ins. for us is $835/year. We put money aside each month to cover these expenses so we are not coming up with it last minute and stressing about it.
So it's not so much that I was smart in my 20s. I just came into a different kind of situation than most and made the best of it. Life is not so stressful because we don't have to worry about a mortgage.
We saved for 6 years for a downpayment while living in the SF Bay area, thinking we would buy there. DH had a great job offer in the Midwest so we wound up moving. Housing was less expensive and we chose to use our downpayment on a modest, but nice home that needed updating. Put 40% down and paid extra on the principal every month. Used cash for renovations. Paid that house off in 12 years.
We sold that house and bought another - using the money from the first house and some savings. We opted for a small mortgage to use cash for renovations - 60K worth of them - and paid the mortgage off in 4 years.
We have always lived on one income (DH) and used mine for extra payments, vacations, cars, kids' expenses, savings and retirement.
That must have been a very difficult time in life. But, it seems that you are in a good, healthy place now. P.S. I do like quote trees.
We have not paid our's off yet.
We bought in June 2012. $317k. We put 20% down. Right now we pay a 13th payment each year and just added in a payment of an additional $100 to principal-only each month.
At this rate, we will shave nearly a decade off of our 30 year mortgage.
Once we save for a minivan and pay down one small debt, we will be tossing more money toward the mortgage.
I guess our goal will be to get rid of it as quickly as possible, but feasibly that will still probably take us about 10 years (since we are saving for retirement and home projects as well as vacations along the way).
A few posts back, I posted a mortgage calculator from www.math.com. It is called the "What If I Pay More?" calculator. It can give you a good idea of how you can shave years and dollars off your loan by paying extra.
I think it's great you are learning about this now so you can jump right in once you buy your home.
Good job. We put $50k down on our $135k house. We're in a LCOL area. We want to pay ours off in 8 years. Very doable.