I was at the doctor's office waiting to get my allergy shot Friday 02/07/2014 and tried to log into my mortgage bank account to check the balance. It let me log in, but there was no mortgage account. There was no account at all. I logged on to my Mint.Com account which aggregates all my finances and it couldn't connect to my account there either. That meant it was official. The bank had received and cashed my last payment, closed the account, and the house is all mine. I called my home insurance representative and informed them that the house was paid off and that they should remove the bank from my policy as a beneficiary.
I believe that's all I need to do. The bank should take care of "recording" my deed so that it's not tied to any debt.
Next March when I do my monthly budget with my wife, it'll be the first time we don't have a $700 payment to worry about and that'll continue month after month after month after month. It's a wonderful, empowering feeling.
I made a web site tool to help you see the power of investing AND paying off your mortgage early:
http://www.tabroom.org/invest/investing.aspx
http://www.tabroom.org/invest/mort.aspx
I have been investing through my company's 401k program and if I didn't add another dime to it, I'd still be living VERY comfortably when I turn 59 and a half and can touch the money without penalty. If you invest just $100, which is NOT that much money if you think about it (2 days working minimum wage), a month when you're 18, you'll have a half million dollars when you're 62.
If you can work hard and pay off your house early and use THAT money to invest in? Wow. It really starts to take off. If we say the average house payment is a $1,000 and you invest a $1,000 a month from the time you're 40, then you'll have a million by the time you're 65.
If THAT doesn't convince you, just think about all the interest you're letting go down the drain when you keep a mortgage.
If I had let my mortgage run its course over 30 years, I would have paid $127k in interest on the loan. The loan was only $116k. I would have paid more money in interest than principle - that's 110% spent on interest. That same mortgage paid on a 15 year note would have only accrued $57k interest or HALF the principle. That's much better, but that is still a lot of money in my book, which is why I plan to never borrow money again. I want my money making money for me - not banks.
There are people who will say it's a bad idea to pay off your house early because you can invest the money. But, there is a major fallacy in that line of reasoning: they don't factor RISK. Although I DO advocate investing, it should be noted that investing has risk involved. Long term, you should make money, but in the short term, it's like playing poker: you go through down swings. 2001-2002 was a downswing in the stock market as was 2008-2009 plus many other random periods in time. Furthermore, having a mortgage is a RISK. You could lose your job and find yourself in a position where you can't pay your mortgage. Losing your home and its equity would be a HUGE financial and personal disaster. So, while I am not adverse to RISK, I AM adverse to RISK on top of RISK, and using money you could be paying off your house with to invest in the stock market is just stupid IMO. Imagine if you NEVER made extra payments and paid off your house in 30 years. Would you immediately take out a 2nd mortgage against your paid off home so you could start investing again? I would hope not and that's the same thing as not paying off your house early IF you can.
I'm obviously very happy and excited and it still doesn't feel real yet. I hope this euphoria lasts a long time.
I would encourage anyone out there to set your goals high. While I do make a decent wage, I am not rich by any means. I've never made more than 5 figures. And, if I had made less money, I just would have bought a smaller house and still paid it off. There's really no excuses. Be disciplined. Live on less than you make. Avoid debt. Have a plan. Stick with it. Make wealth. I highly recommend Dave Ramsey's book "The Total Money Makeover" if you're looking for a detailed plan. I'm now on the last step: STEP 7 build wealth!
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Originally Posted by Jason
