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Pay off that dang mortgage, my story

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    Pay off that dang mortgage, my story

    I believe my mortgage pay off story is unusual so I thought I'd share it with my fellow savers.
    We bought our house for 172k in the Sacramento area in 1998 (excellent and lucky timing for us) with 40K down. We had a monthly mortgage payment of about 1100 a month with a 7.25%rate.
    I started working at a restaurant doing pizza/pasta deliveries soon after that, and was soon up to full time, and my wife got a full time teaching job as well. So, during 1999 we were working up a storm, and probably paid off about 20k extra on the mortgage. My wife quit teaching with the birth of our second child in 2000, and I really went into action at the restaurant, going up to six dinner shifts and five lunch shifts a week, about 42 hours a week, alot of driving.
    Over the next few years we kept up that level of prepaying the mortgage principle. In 2002, the owner of our restaurant mentioned getting a home equity line of credit as an indirect way to refinance and this I did. At that point I had about 50K left on the mortgage, and I paid that 7.25% loan off with a 4.5% adjustable Heloc loan of 50 k. Then, it was a practically daily assault on that HELOC loan (the interest amortized daily so it made since to make frequent payment trips to wipe out as much interest as possible).
    I think over the next year and a half I went to the bank about 100 times with various amounts of cash. Finally, with about 20K left in late 2003, my parents loaned me 20 k. With this money I paid off the heloc, and then began paying my parents off. I was making very good money for a delivery driver back then, great per hour, and was working lots of hours, so I think I impressed my parents with my constant stream of FED EX envelopes full of cash. By October 2004 I had paid off all debts related to our home mortgage and what a nice feeling. From then on, it was time to pump money into stocks, Prosper loans, and then later into buying stock in the restaurant I work at.
    I have eased off working so hard however, now only 4 nights five days, and 30 hours a week.

    #2
    Very well done! It would be nice if you could bottle some of that intensity, forethought, and focus to influence others. Too much playing footsy with debt of all sorts in our society these days. Ever consider running for congress?
    -Enjoy!

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      #3
      Was the restaurant job your regular job, or was it a second job?

      Congrats on having no mortgage.

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        #4
        Actually I have thought about running for congress, but not too seriously. The restaurant job was my only one. It started out as part time, and I just waited to pick up enough shifts and within six months I was at close to full time hours.

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          #5
          And so after your wife left her teaching job, you supported your family of 4 and aggressively paid down your mortgage, while working full-time as a restaurant delivery person? That is impressive. I hope you'll share some of your dollar stretching budget techniques.

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            #6
            That is awesome!

            What is your home worth now - $400k-ish?

            What you left out is how most everyone was just borrowing their equity as home prices skyrocketed. You faced a lot of peer pressure and resisted a lot of temptation, I am sure. !! {We bought in 2001 in Sac - put 25% down on home - have not paid much extra because has been unemployed and we slowed down working to have babies and raise children. I don't talk financial specifics with people, but am frequently asked what we are doing about our "housing situation." You should see the looks of awe and confusion when I say we don't have a "housing situation." I've got a $950/month mortgage for a nice home in a nice neighborhood. When everyone was going *crazy* we were scaling back and cutting our income in half. WE were just on such a different path and in such a different state of mind. We had also moved here from Bay Area - this is our low cost haven - so our perspective was just very different. Many many people told me I was a moron to pay down my mortgage and not borrow against my home. WE didn't pick up and move 100 miles so we could have a giant mortgage!! So we avoided all the crazy. }. All this to say I know for sure you were thinking and doing something totally different from most the locals.

            We will likely consider HELOC/parental loan once we get down to last $50k. IS absolutely what I would do.

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              #7
              Yes, the job was my only one while paying it off. Back in the early 2000's I must have been making about 50k a year, and our expenses were low as our kids were young. We had no student debt, bought good used cars from private parties for cash, rarely ate out, went on simple vacations. I don't think we went to a full price movie at all during that time. My wife was really good at finding hand me downs for the kids (does a two year old really need to be dressed with new clothes from Baby Gap?). So for us I guess it was the right combination of making a decent income, having a low mortgage to start with, having young kids and being overall frugal that enable us to pull it off.
              I think the value of our house peaked at about 450k in 2006, and is probably worth about 275-300k now, and we were so lucky to have bought it when we did, in 1998, just months before the housing boom started in our area.

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                #8
                Great story! We've been pretty lucky in real estate over the years... We're 35/36 and on our third home/condo and were able to put $95K down last year due to the previous house and condo. We're currently only 1 year into our 30 year mortgage and the value has already gone up about $25K based on identical comps in the building! We had to move for work last year (about 6 months after the purchase) but kept the condo as a rental and we're getting $1,920/month in rent (about $720 in positive cash flow after mortgage ($250/month)/taxes ($300/month)/maintenance fees ($550/month)/management fees ($100/month)) based on the comps we should be able to up the rent to around $2,250/month when the current tenants lease is up (this September). Thanks to budgeting we were able to add an additional $1K to the principal for this month with plans/hopes of paying the mortgage off within 5 or 6 years.

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                  #9
                  Wow, now that's a great story. Love your determination and it shows that you don't need to earn 100K/year to pay off your debt faster. Excellent job
                  Personal Finance Blog | Dojo's PF Musings

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                    #10
                    What an amazing and inspiring story, thank you for sharing it!

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