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

Sunday, April 24, 2011

Decision Reached

This will probably not surprise anyone who knows us (or who has been following my blog), but my wife and I ultimately decided that we were comfortable with the choice to pay off the mortgage this month. We weighed the risks against the rewards and are mentally ready to aggressively move forward. Tomorrow I will head down to the bank to send a wire to my lender for the remaining balance and interest, with a little extra thrown in to cover recording fees and the cost of the wire itself.

Our lender has an automated telephone number which provides information about the loan (balances, history, etc). One of the options provides mortgage payoff details. However, the lender only offers two choices after selecting the "Loan Payoff" branch of the phone menu: "Press 1 if you are selling your home. Press 2 if you are refinancing your loan." Well, of course we are doing neither. I guess not too many people elect to pay off their mortgages in the way we've chosen.

The lender is also very clear that they will only accept final payoff in the format of certified funds (bank wire or cashier's check). I doubt they would make an exception in our case, even though they were happy to cash our personal check last month for an amount which is larger than our remaining mortgage balance. At this point I'm not interested in pleading or arguing with customer service anyway. I'll just follow their standard procedures in an attempt to minimize the chances that something gets fouled up in the process.

For the sake of disclosure, here are some of the reasons we made the decision to go ahead with the loan payoff now, instead of waiting a few more months so we wouldn't have to dip so far into savings. This list is in roughly descending order of importance.

  • We are mentally ready to be done with this debt
  • We have budgeted for major expenses through the end of 2011, and paying off the mortgage now would not negatively affect our ability to meet expected future obligations
  • We do not feel our employment situation is at risk for the near future (at least through 2011)
  • We have already transferred cash out of our savings account and are comfortable with the balance
  • We expect to rapidly replenish our savings after the mortgage payments are history
  • We have dealt with a lot of maintenance issues (repair and/or replacement of appliances, etc) over the past five years, so the risk that something will break or need repair in the near future is relatively low (knock on wood)
  • By paying off the mortgage now, we will avoid paying some additional future interest
I'll provide an update over the next day or two when the transaction is complete.


Daizy said...

I totally agree with point number 1, mentally ready to be done with this debt! I am soooo there! After so many months of focusing on the mortgage it just feels right to get it over with even if the savings goes down temporarily. How exciting! Congratulations! I hope to be at that point very soon.

Anonymous said...

Congratulations! I have been following your progress for awhile now. It's wonderful to know that there are people like you and your wife.

Louise said...

I think it's a good decision. Congratulations to you both!!!
It's been wonderful following your mortgage payoff and you both have worked hard and been very disciplined. Well Done!

Middle Way said...

Nope, not surprised.. :)

It will be great to see that line item just disappear. Do you get an official letter?

My girlfriend made a photocopy of the last cheque she wrote to pay off her farm and has it framed as a reminder of a job well done.


Niki said...

Wow, I just found your blog. I wish I had found it sooner. This is such an amazing accomplishment.

The Executioner said...

Thanks all!

Middle Way: I am expecting to receive some sort of document stating that we have satisfied the terms of the mortgage. I'll provide an update when I receive it.

laura said... sounds like you're making the right decision..can't wait to join you ;)