Progress to Date

  • Original Loan Amount: $204,000.00
  • Balance at Beginning of 5-year Goal (1/1/08): $188,983.82 @ 6.00%
  • Balance at Refinance in February 2009: $148,000.00 @ 4.625%
  • Outstanding Balance: $0.00 (PAID IN FULL!!!)
  • Latest Payment Date: April 2011
  • Latest Additional Principal Amount: $17,623.22
  • Amount Ahead of Schedule (since refinance): $121,462
  • Time Ahead of Schedule (since refinance): 7 years 10 months
  • Interest Saved Last Month: $23,972.48
  • Total Interest Saved: $28,435.55 ($1,037.74 on original mortgage; $27,397.81 on current mortgage)
  • Months Remaining in 5-year Goal: 20
  • Average Monthly Principal Needed to Meet Goal: N/A (Goal achieved)
  • Progress List Explained

Monday, January 28, 2008

Exposition

The dishwasher finally broke yesterday. It's been slowly dying ever since we bought our house in 2006. We've been dealing with its shortcomings for the past year or so, living in denial of its impending demise, but tragedy finally struck last night when I tried to run a load after dinner. So today we went down to Sears and ordered a new model, which should be delivered and installed by this time next weekend.

Although the bill for the new dishwasher isn't going to break the bank, its purchase will limit the amount of extra cash we have available to apply toward principal as part of next month's mortgage payment. After embarking on our quest in January with a very healthy $3,000 additional contribution to principal, we've already suffered a setback in only the second month. This had me disappointed for a while today, because I had been expecting to continue January's momentum into February with the anticipated tax refund. However, I've accepted the situation at this point, and if anything, I'm more determined than ever to see this plan through to the end.

Since I didn't start at the beginning, I'll briefly summarize events leading to this moment. My wife and I bought our house in 2006. Although we had some money left over from the sale of my condo, it wasn't quite enough to put down the standard twenty percent, so our lender set us up with an 80/20 mortgage (eighty percent on a fifteen-year note fixed at 6.00%, and the remainder on a home equity line of credit [HELOC] at a fraction of a percent above the Prime Rate). Our goal for the first year and a half was to eliminate the HELOC, since it had a higher interest rate. We accomplished that goal in December 2007, leading to a short but intense celebratory moment. At point, we re-focused and, like Sauron's fiery gaze from Mordor, turned our attention to the HELOC's larger (and much uglier) cousin: the Big Bad Mortgage.

A couple of challenges earlier in 2007 made us realize that we wanted to completely eliminate debt from our lives, so we could make employment decisions without feeling chained to our monthly payments. An initial analysis of our monthly expenses revealed that after savings, about half of our income was earmarked for housing payments. Our ultimate goal is to find ourselves in one of several happy scenarios, each accomplished by eliminating the need for a monthly mortgage payment. We could become a single-income household. We could both pursue more meaningful jobs which would most likely not pay as much as our current jobs. We could scale back to part-time employment, granting ourselves more leisure time together. Or we could continue to aggressively save after the mortgage is paid off, funneling the extra income into savings that would allow us to retire early.

I hope to look back on these entries some day with the satisfaction of achieving our goal. All I aim to do here is provide a record of our progress toward a debt-free life together. Wish us luck.

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