“Chains of habit are too light to be felt until they are too heavy to be broken.” -Warren Buffett

Paying Off Your Mortgage

Artist Kathie Wright's watercolor rendering of our home
There are so many options out there from traditional mortgages to home equity lines of credit! It can be difficult to know what's best for you. Shopping around can make a huge difference in how quickly you are able to pay
down your mortgage and how much (or little) you put towards interest costs!

We started out with a traditional bank mortgage and were fortune to buy at the time when interest rates were hitting record lows in 2008. We had set up our payments based on the mortgage interest rates being about 3 percent higher than they actually were by the time we moved into the house... And even though we could have lowered our payments several hundred dollars a month because of this, we left them the same. Essentially cutting about 10 years off our mortgage!! This was a HUGE win for us. We also went ahead and put extra payments on our mortgage every time we had "extra" cash come in. Bonuses, tax returns and other "free" money all went directly onto our mortgage (though sometimes we went out for a special dinner or something first to celebrate the extra money!).

A few years in and we no longer wanted to be confined to a traditional mortgage. After some research we went with a product that functions more like a home equity line of credit. All our monthly income goes into our mortgage account and essentially pays down our principal and all of our expenses are drawn from the account which essentially increases our principal. This gives us flexibility to automatically make higher payments on our mortgage each month because our excess cash instantly pays down our mortgage... The key is our living expenses are below our income. This wouldn't be a good solution if you like to spend excess cash. It is a fantastic option if you are committed to living below your means and being out of debt as quickly as possible.

We've had our line of credit for a couple of years now and managed to pay off our mortgage this past summer!! However, we also decided to put in an in-ground pool, so we chose to leverage that same line of credit so we could complete our backyard renovation while our kids are still young, and we'll have many years to enjoy it. This does mean we owe, technically on our house still, but what freedom to know it's a small portion that will be paid again in the short term and we'll be mortgage-free for life.

An amazing achievement that wouldn't have been possible in our 30s without good mortgage products and a commitment to becoming debt-free so we have the flexibility to live the life we've always dreamed of!

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