Monthly Summary: April 2011(Paid in Full)

This may be a bit anticlimactic considering my previous entry, but for completeness I'll summarize our April mortgage activity using the format I've become accustomed to for more than three years now.

Our April mortgage payment was the 26th of 120 scheduled payments on our ten-year loan. It was the 40th payment since we began our DTM project at the start of 2008. And it was also the last mortgage payment we'll ever make on this house, as the loan is now paid in full.

We began the month with an outstanding balance of $19,107.10. After careful consideration, we decided to transfer enough money from our savings to pay off the remaining balance. Because we paid off the balance before the last day of April, the interest was charged at a daily rate (24 days). Along with the remaining balance, we paid our lender $58.91 interest and a $17 recording fee. Our bank charged us a $25 wire fee for the privilege of sending certified funds to the lender. So the total cost of dealing the mortgage its fatal blow in April was $19,208.01.

Until now I've been listing the amount of interest we save each month by comparing our actual interest payment to the amount of interest we would have owed the lender if we hadn't made prior payments to principal. I call this the "realized" amount of interest. Since the loan is gone, we not only realized the interest savings for the month of April, but also for all future months until the loan would have been paid on the standard amortization schedule (March 2019). Because we would have owed the lender $37,133.57 of interest over the full life of the ten-year mortgage, and because we only paid the lender $9,735.76, we have now realized $27,397.81 in interest savings on the ten-year loan by killing it this month. (This doesn't include interest savings from our original 15-year mortgage which we refinanced in early 2009 -- by including that amount, the total is $28,435.55).

If we had never made any extra payments on our ten-year loan, the remaining balance at the end of April would have been over $121,461.

We reached our original five-year goal last month. We reached our revised four-year goal this month. From start to finish, it took us three years and four months (40 months total) to pay off the mortgage once we made up our minds to do it as quickly as we could manage.

Strangely enough, our achievement doesn't yet seem real. I think it will take at least another month (when we start seeing more unallocated cash in our budget) before we start reaping the benefits, both financially and psychologically.

Although the mortgage is finally dead, I plan to keep this blog up and running for a while. I would like to reflect a bit on our experience over the past few years, and describe our new mortgage-free (and 100% debt-free) existence. At some point in the not-too-distant future I will probably decide that I've had my final word, and can close the book on this project. But then, of course, a new project will begin.

I'd like to dedicate this month's entry to my loving wife, who provided us the courage to set bold goals, the tenacity to help keep ourselves on target, and the hard work (and paychecks) to back it all up. Congrats, girl! You deserve it.