Whenever we’ve talked with folks about our ambitious 5-year plan to pay off our 30-year mortgage, we always qualified it with a statement along the lines of the following: “Yeah, the mortgage payoff is going well, we’re on track/ahead of schedule. Of course, if we have a kid that would probably change things a bit.” Well, I’m glad to say that happy little roadblock has come to pass!
Since our Three Year House-iversary post this time last year, we had been making phenomenal progress on our payoff scheme and were tracking to have the house paid off before the end of 2014! Once we found out we were expecting – after a few hours of high fives and Snoopy-dancing around the house – we decided we would take our foot off the gas a bit on the house, save a little “baby fund” for anything unexpected, and take care of a few house projects that made sense to get done before our little bundle o’ joy arrived (like fully scraping and painting the exterior of the house).
So we’ve slowed things down, but what does that really mean? As always, let’s go to the numbers!
The Year in Dollars: Since last July, we’ve paid $38,334 on the principle of our mortgage alone (i.e. not counting interest, taxes, and insurance); by far our biggest year ever!
The Payments: Not surprisingly, that means some massive payments. Prior to the baby news, we had made our biggest payment to date in February 2014 (8 times principle & interest)…until the next month in March when we did it again, paying NINE times principle & interest! Since then, we also made our smallest ever, a measly $200 extra. But without fail, we’re putting something above our mortgage each month. It just wouldn’t be us not to!
The Running Total: As of July 2014, the end of our fourth year of homeownership, we’ve paid just over 26 years off our mortgage.
So what’s next? The biggest shift comes to our income. We always planned, when a baby came into the picture, for Courtney to stop working (a stay-at-home parent is something we both believe in, and I like working more than Courtney, bada boom). Part of that plan included running our household on a small budget, leaving us lots of financial ‘oomph’ left over: first to let us save and make big honking mortgage payments, and now to make it easy for Courtney to gracefully shift to part-time business owner and full-time mom.
Mortgage Payoff 2.0! With our fabulous MVP Health Care insurance and a fully-funded HSA, we’re good to go on our medical costs for everything baby – phew! Ratcheting down the mortgage payments lets us meet all our bills on just my income, with enough left over for a baby-sized boost to our cash savings; funds for our last few house projects; and our new, slightly adjusted mortgage goal: to pay off our house by our SIX Year House-iversary, July 2016. It’s not quite as crazy as five, but it sure beats the pants off 30!
A few of our friends and relations have (lovingly) accused us of being a little too focused on money these last four years. But actually, it’s quite the opposite. Having the freedom for one of us stay home with our children – and for the other to work without bringing home the stress of debt and a tight budget – is worth just about any short term sacrifice to us. But the crazy thing is; the cost hasn’t been that steep! We don’t take expensive vacations, but we take long weekends to Boston or New England each year and our low-cost honeymoon was affordable AND unforgettable. We don’t drive fancy cars (quite the opposite) but we get around safely and reliably. And while we have plenty of fun “stuff”, as you saw in Courtney’s last post anything we don’t get full value from we sell to someone who wants it more (though some sales were tougher than others) and put the money toward our dream of family peace and financial freedom. And after years of dreaming together, we’re very much looking forward to including one more little dreamer into the mix!