Have you ever thought about what the mortgage payoff process looks like? I bet you thought it was simple…! Good news; you’re right and wrong.
It’s been just over six months since our family became completely debt free, house and all. We sacrificed to pay off our mortgage in record time. Now that we’re a few months removed from the burden of a mortgage, we’re really starting to see the benefits of having completely paid off our debt.
This process was easy in some ways (just throw money at the problem, right??) Mortgage payoff was more difficult in other ways. As in, that year of our life was a total blur.
What could be more fun than interviewing my husband (the sole breadwinner at the Loving Littles home) about the process of paying down debt??
Here are his responses, along with the steps we took to process our final mortgage payment (Hint: it’s both more and less complex than you’d think).
When did you decide to start paying off your mortgage early? What led to that decision?
I have always wanted to pay it off early. I don’t think it was until we refinanced our mortgage to a 15-year mortgage 5 years ago (April 1st, 2013) that I realized we could pay it off sooner than I originally thought possible.
This refinance also occurred around the same time as my work hours picked up and more overtime became available. This helped me to realize how we could use that extra income to accomplish this goal sooner than we originally thought possible.
How did you go about making extra payments?
We did a combination of two things.
It’s natural to spend more money as you make more money. If we wanted to be disciplined and pay off the house as soon as possible, we were going to have to control our spending.
The first thing we did was to lower our income so we would spend less. Let me explain. The first thing we did was to lower our income so we would spend less. Let me explain. Click To Tweet
We set up another account at our bank and arranged an automatic transfer out of each paycheck to this account. This “lowered” our income so we would spend less and allowed us to save money to go towards the house at the same time. By having this account we were paying down the house as well as having an extra savings account for any emergencies that might occur that year.
At the end of each year, if no emergencies occurred (and thank God we didn’t have any), we would dump everything in that account toward the mortgage. We would repeat this each year.
The other thing we did was to pay down a smaller amount each month towards the principle. This served as a visual reminder throughout the year of what we were doing and allowed us to take a small chunk out of the mortgage while we were waiting for the larger dump at the end of the year.
Note from Janeen: I’ve written even more about this monthly vs yearly mortgage principle payment strategy.
Did you make extra money / save money to spend toward the mortgage, or some combination of the two?
This mortgage was paid off through a lot of hard work. Many, many extra hours were worked and the whole family sacrificed a lot of time to accomplish this goal.
Towards the end of the mortgage payoff, we also cashed out a very small investment. Cashing out this investment gave us that extra push at the end to accomplish our goal.
What was the hardest thing about the mortgage payoff process?
Working the extra hours was definitely the hardest, but for me, it wasn’t necessarily working the hours that was hard but being away from the family so much.
Spending so much time at the office didn’t leave a lot of family time. Working so many hours was also tiring, making the time we did have together less quality.
Were there any surprises along the way?
Honestly, I was surprised how quickly we were able to accomplish this goal once we focused and made it a priority.I was surprised how quickly we were able to accomplish this goal once we focused and made it a priority. Click To Tweet A prayer I often prayed was “Lord let this mortgage be paid off even sooner than I think possible so that you would get the glory”.
I truly believe God answered this prayer.
As far as surprises, I did get a little excited at the end and threw every last dime I could find at the mortgage a few weeks before we originally planned to pay it off. This caused a brief moment of panic when I realized I had almost no money in our savings, but this only lasted a few days until a paycheck came in.
What was the final payment process like? Any advice?
Amazing! Everyone I talked to at the bank seemed amazed that someone was talking to them about actually paying off their mortgage. Apparently, most people don’t do this.
I can’t explain how good it felt to make the last payment. I wanted this process to go smoothly.
The payoff payment is a little different. I would recommend following the payoff instructions exactly. Make a call to your mortgage lender or read their payoff instructions online.
How does it feel to have paid off your mortgage? How has it changed your life?
It’s been a little while now and it still feels surreal. Each first of the month that rolls by I’m still a little shocked that my bank account value doesn’t drop. We have the freedom now to do what we want with our money. We can set goals to do as a family and have nothing in our way from accomplishing them. Feels great!!
Looking back, are you glad that you took this step, or do you wish that you had done something different with the money instead?
I am super glad that we took this step. Everyone should do it. I have absolutely no regrets putting our hard-earned money toward the mortgage. Our money can go where we want it to now that the mortgage is gone. That feels good.I have absolutely no regrets putting our hard-earned money toward the mortgage. Click To Tweet
Any other thoughts?
The only thing I struggled with during this mortgage payoff process was the toll that it put on our family.
I definitely think anyone who sets out to pay their mortgage off early needs to know that as they make their money budget each month they need to make a time budget as well.
Janeen and I sat down every now and then and would put family events on a calendar. I think that was an important thing to do. Looking back maybe we should have put more.
Looking forward I know that we will (and can) now.
Are you considering mortgage payoff? Have any questions about the process???