I just realized that I have not written about our house or our mortgage in a while. I also know there are quite a few new readers (hello!), so I thought I’d touch base with everyone again.
Our House – The Beginning
Mr. BFS and I bought our home in 2007. We had been married for 2 years and were 23 and 24 years old respectively (yep, I’m the slightly older woman, lol). The whole process was stressful, but in the end, we found a fantastic foreclosure deal on a wonderfully built house. 4 years later, we’re still loving it.
Here are our House Details:
- Built in 2004
- 2 Stories – Brick and Hardy Plank
- Attached 2 Car Garage
- 1750 square feet
- 3 bedrooms
- 2 1/2 baths
- The bedrooms and two full baths are upstairs
- The kitchen, living room, dining room, and half bath are downstairs (great for our potlucks!)
- Covered back patio
- Small front yard and smaller back yard
It was listed by the bank at $119,500. After nearly 6 weeks of very slow negotiations (a downside to buying a foreclosure), we settled at $114,000, had the place inspected, and closed the deal towards the end of April 2007. Fast forward to now and we currently have built up some equity that we would like to borrow against to do some home improvements. The best home equity loan rates are looking really good right now.
Here are our Mortgage Details:
- We forked over a 20% downpayment – $22,800
- We also paid all of the silly closing fees – about $3000
- The mortgage came to $91,200
- 5.375% rate
- 15 year term
- We did not escrow – you can see in our monthly budget that I put aside money every month for our property taxes, which come to about $2300 a year right now
This means our monthly payment is a few cents short of $740
. We have overpaid $160 since the first ever payment after I figured out how much we could save on interest, so we have always been on track to pay our house off in 11.33 years total. That’s also why our mortgage payment shows $900 in our monthly budget.
I’m impatient, so I bet we’ll have the mortgage completely out of the way in 10 years total or less. Hopefully our house will be all ours by my 34th birthday – 36th at the absolute latest. 🙂
Our Mortgage Update
As of right now, nothing has changed. We have opened a 2nd Roth IRA instead of making additional mortgage principal payments, so we are still on the 11.33 year payoff track. If my blogging income stays above $2500 a month consistently, I’ll be working from home and anything over that $2500 will be squirreled away into our investment account.
That account may very well grow fast enough to pay off our mortgage even more quickly than I expected. But barring that, we’ll still have a paid off house by 2018.
Why I Pay Off Our Mortgage Early
I know some of you may disagree with paying down our home early. I do understand that 5.375% isn’t a bad rate and we could invest elsewhere for better returns. Refinance home loan rates are looking tempting right now however I simply rather take the guaranteed return.
Since my husband and I are better off taking the standard deduction than itemizing our mortgage interest payments (less than $4000 a year), we never see any of the tax benefits so many people like to hold on to.
We also do invest in stocks, 2 Roth IRA’s, and a 401(k), so it isn’t like we aren’t covering our bases anyway.
I simply do not like owing anybody money. When I first set out to learn how to get into real estate investing I wasn’t expecting all this stress. As I’ve said elsewhere, debt makes me feel itchy. Like unfinished business. I personally will be beyond happy when our last payment is sent in and I will know that we can do whatever we want with that extra $900 a month!!!
Do you own a home? If so, how is your mortgage going? If not, what do you think about it all? What do you think of paying off a mortgage early?