The 4-year mortgage payoff plan

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Outer Marker
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Re: The 4-year mortgage payoff plan

Post by Outer Marker »

Jane61 wrote: I love the idea of being mortgage free. (To be honest, mine is a horrifying - by today's standards - 6.625% 30 year fixed and I have never refinanced, partially due to having my head in the sand in the early years of my mortgage and currently because at this stage of the game I dont' think it pays - come Oct I'll be entering my 15th year of the mortgage payment.) However, if I focus on putting my after tax bucks into the mortgage, I won't be able to continue accumulation and, though high by today's standard, I think my mortgage rate is actually kind of low compared to rates in 1998 when I started.
This makes no sense. Unless your mortgage is a trivial balance, why in the world would you not refinance at todays's rates?? 6.625 percent is awful by today's standards, and the fact that you're in year 15 of 30 makes no difference. The rate is what it is. I understand not wanting to extend the term -- but why not at new 15 year mtge at half the rate!? Look at zero cost refi options.
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G-Money
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Re: The 4-year mortgage payoff plan

Post by G-Money »

Optimistic wrote:Actually, I have a Home Equity Loan from PenFed and inquired about it. I was told by the member service representative it would not work.
I have the PenFed 5 year HEL, too. See my posts in this thread regarding the treatment of payments. http://www.bogleheads.org/forum/viewtop ... 8#p1437868

Also, I've made payments twice per month for the last few months. I can clearly see on the website that my payment is first applied to the daily interest that accrued since my last payment (typically 14 or 15 days), then the rest of my payment is applied toward principal. So I know it works.

You can always test it out by making a mid-month payment of an amount slightly more than the interest that accrued to date and check online to see how your payment was applied.
Don't assume I know what I'm talking about.
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WolfpackFan
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Re: The 4-year mortgage payoff plan

Post by WolfpackFan »

Sunny Sarkar wrote:Hi WolfpackFan,

During these 4 years of paying off, are you temporarily suspending contributions to roth, 401k, 529, etc.?
Hi Sunny, I mentioned in an earlier post (albeit not the original post) that we will still be contributing max to both Roths, and continuing our contributions to 401k (which aren't maxed, but above the company match).
4 years seems like an awful long time to live like a monk.
I know, isn't it exciting! I'm assuming by this comment you meant living an austere-like lifestyle, but realistically $1,000/month for food/gas/entertainment/etc. isn't even close to austerity. However I think we're actually both already happier for exercising discipline in the short time span of this goal of ours. There's just something about it that is good for the soul! Have a blessed day.
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stemikger
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Re: The 4-year mortgage payoff plan

Post by stemikger »

mike_slc wrote:4 years seems like an awful long time to live like a monk.
Not really 4 years goes pretty fast, plus look at all the years you will be free of the biggest debt of your lifetime. Not a bad tradeoff in my opinion. I think many people look at 4 years or more of sacrafice and don't even try, so the few that do are living a life most only dream about or experience in their later years.
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stemikger
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Re: The 4-year mortgage payoff plan

Post by stemikger »

WolfpackFan wrote:
Sunny Sarkar wrote:Hi WolfpackFan,

During these 4 years of paying off, are you temporarily suspending contributions to roth, 401k, 529, etc.?
Hi Sunny, I mentioned in an earlier post (albeit not the original post) that we will still be contributing max to both Roths, and continuing our contributions to 401k (which aren't maxed, but above the company match).
4 years seems like an awful long time to live like a monk.
I know, isn't it exciting! I'm assuming by this comment you meant living an austere-like lifestyle, but realistically $1,000/month for food/gas/entertainment/etc. isn't even close to austerity. However I think we're actually both already happier for exercising discipline in the short time span of this goal of ours. There's just something about it that is good for the soul! Have a blessed day.
Great reply. Don't let the Gloom and Doomers discourage you. I have members in my own family that tried to talk me out of paying off my mortgage and now that I'm 5 months away I'm soooo glad I didn't let them influence me. For some reason people like to discourage other people when they have a goal or a dream like this. I'm not sure why, I guess it's because they secretly want to do it themselves but are afraid to try.
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lexie2000
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Re: The 4-year mortgage payoff plan

Post by lexie2000 »

We know what it's like to be mortgage free because we've been there twice before.

We have also been paying down the mortgage on the $1.3M home we purchased at the peak in 2005...well, sort of. We want the "feeling" of being mortgage free, while still having the flexibility of having the cash should the #%@* hit the fan. We are just $29K shy of having it "paid off" and should have it done by the end of the year.
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stemikger
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Re: The 4-year mortgage payoff plan

Post by stemikger »

lexie2000 wrote:We know what it's like to be mortgage free because we've been there twice before.

We have also been paying down the mortgage on the $1.3M home we purchased at the peak in 2005...well, sort of. We want the "feeling" of being mortgage free, while still having the flexibility of having the cash should the #%@* hit the fan. We are just $29K shy of having it "paid off" and should have it done by the end of the year.
I'm just making sure I read this correctly.

You only have $29K left on a home you paid $1.3M for?

Wow!!! I'm doing the happy dance for you!!!!

Way to go!!!!

Yes, I'm jealous, but in a good way. I find this very inspirational!!!
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lexie2000
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Re: The 4-year mortgage payoff plan

Post by lexie2000 »

stemikger wrote:
lexie2000 wrote:We know what it's like to be mortgage free because we've been there twice before.

We have also been paying down the mortgage on the $1.3M home we purchased at the peak in 2005...well, sort of. We want the "feeling" of being mortgage free, while still having the flexibility of having the cash should the #%@* hit the fan. We are just $29K shy of having it "paid off" and should have it done by the end of the year.
I'm just making sure I read this correctly.

You only have $29K left on a home you paid $1.3M for?

Wow!!! I'm doing the happy dance for you!!!!

Way to go!!!!

Yes, I'm jealous, but in a good way. I find this very inspirational!!!
We paid $1.3M for the home, but "only" had to take out a $.5M mortgage as we brought $800K to the table (from the sale of our previous home). And just to clarify, we have $29K to go until we have the amount needed SAVED to pay it off at any time, if we should choose to do so.
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stemikger
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Re: The 4-year mortgage payoff plan

Post by stemikger »

lexie2000 wrote:
stemikger wrote:
lexie2000 wrote:We know what it's like to be mortgage free because we've been there twice before.

We have also been paying down the mortgage on the $1.3M home we purchased at the peak in 2005...well, sort of. We want the "feeling" of being mortgage free, while still having the flexibility of having the cash should the #%@* hit the fan. We are just $29K shy of having it "paid off" and should have it done by the end of the year.
I'm just making sure I read this correctly.

You only have $29K left on a home you paid $1.3M for?

Wow!!! I'm doing the happy dance for you!!!!

Way to go!!!!

Yes, I'm jealous, but in a good way. I find this very inspirational!!!
We paid $1.3M for the home, but "only" had to take out a $.5M mortgage as we brought $800K to the table (from the sale of our previous home). And just to clarify, we have $29K to go until we have the amount needed SAVED to pay it off at any time, if we should choose to do so.
That's still pretty cool. I say pay it off. My home is only worth abour $360K, but it's still a pretty big accomplishment as far as I'm concerned. My goal is no debt, then I will worry about the big emergency fund.
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WolfpackFan
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Re: The 4-year mortgage payoff plan

Post by WolfpackFan »

Monthly status update:

I'm pleased to report that August was a success. We managed to stay within our $1,000 monthly allowance. We only had $3.42 left over! Whew. Last week we really had to "button it up" to stay on track. Specifically, we were able to drop an additional principle payment of $5,091 to the mortgage today which knocked off ~7 months and brings the total down to $149,184.13. Seeing those 7 months drop off the bottom of our amortization spreadsheet was nothing short of exhilarating, making our thrifty spending for the month worth while.

However, in this past month we've received some uncertainty in our future financial picture. The wife's company is merging with another and there's a good possibility that there will be some overlap in the staff of both companies, meaning a layoff could be on the horizon for my wife sometime in the early part of 2013. Nothing is concrete yet though. With an abundant emergency fund, and the fact that my salary alone could cover all of our bills (albeit with little left over for savings) we've decided we will be safe to continue on our 4-year mortgage payoff plan. If she's laid off and out of work for a period of time it could throw a wrench into our plan, but such is life.

The aesthetically pleasing ascii progress chart, broken into 4 years. X=paid month
|XX----------|------------|------------|------------|

Also, while I've got your attention, I'd like to recommend you to make an effort to really enjoy your holiday weekend! Now time for me to go watch some college football.
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Re: The 4-year mortgage payoff plan

Post by Bungo »

WolfpackFan wrote:I'm pleased to report that August was a success. We managed to stay within our $1,000 monthly allowance. We only had $3.42 left over! Whew. Last week we really had to "button it up" to stay on track. Specifically, we were able to drop an additional principle payment of $5,091 to the mortgage today which knocked off ~7 months and brings the total down to $149,184.13. Seeing those 7 months drop off the bottom of our amortization spreadsheet was nothing short of exhilarating, making our thrifty spending for the month worth while.
Very impressive and inspiring! Congratulations on your progress so far - that's gotta feel great seeing the balance drop so fast.

I bought a house early this year with a 30 year mortgage and have laid out a plan to pay it off in 15 through a combination of about 25% overpayment each month plus two lump sum principal payments per year, coinciding with stock plan vesting at work. I admit I could probably knock a few more years off that 15 if I were to put a strict budget regimen in place as you have done, but I don't know if I would have the fiscal discipline to stick to it. I admire your will power and hope you manage to pull it off!
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runner9
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Re: The 4-year mortgage payoff plan

Post by runner9 »

We just had closing on a refi on Tuesday so we don't have a Sept 1 or Oct 1 payment; first on new mortgage is Nov 1. Feels really wierd! We'll make up for it though, as Nov 1 we'll repay the Aug 1 payment that will be refunded by the prior mortgage company, as well as Sept, Oct and Nov. Should be $7 or more, depending on our total ER balance.

Keep up the good work!
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WolfpackFan
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Re: The 4-year mortgage payoff plan

Post by WolfpackFan »

October Update:
We were able to stay on track this month and came out $50 below our $1,000 non-bill budget. We paid an additional $3,861.60 of principle this month which knocked ~7 months of payments off. Remaining principle balance is now $144,567.

The aesthetically pleasing ascii progress chart, broken into 4 years. X=paid month
|XXX---------|------------|------------|------------|
mlipps
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Re: The 4-year mortgage payoff plan

Post by mlipps »

WolfpackFan wrote:October Update:
We were able to stay on track this month and came out $50 below our $1,000 non-bill budget. We paid an additional $3,861.60 of principle this month which knocked ~7 months of payments off. Remaining principle balance is now $144,567.

The aesthetically pleasing ascii progress chart, broken into 4 years. X=paid month
|XXX---------|------------|------------|------------|
Wolfpack, I'm doing the same kind of crazy payoff on my supposed-to-be-ten-year student loan. I love seeing other posts to keep me motivated! Good for you!
robocop
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Re: The 4-year mortgage payoff plan

Post by robocop »

mlipps wrote:
WolfpackFan wrote:October Update:
We were able to stay on track this month and came out $50 below our $1,000 non-bill budget. We paid an additional $3,861.60 of principle this month which knocked ~7 months of payments off. Remaining principle balance is now $144,567.

The aesthetically pleasing ascii progress chart, broken into 4 years. X=paid month
|XXX---------|------------|------------|------------|
Wolfpack, I'm doing the same kind of crazy payoff on my supposed-to-be-ten-year student loan. I love seeing other posts to keep me motivated! Good for you!
I concur. I love the posts and I especially love the aesthetically pleasing progress chart- I have always wanted something to keep me motivated, but never felt like I had enough talent to draw a thermometer to fill up as I made monthly payments. I may try something like this to help keep me motivated to pay off my student loans.

We just finished our year at work, and because of that I should be receiving a bonus in December that will give me enough extra money to pay off one of my student loans and part of another one. I think this brings my goal (all student loans except sub-3% loans paid off) as close as February 2013 if everything goes well. Wow does it feel exciting to say that- more than 3 years into the hard work of paring my life down to get rid of my high interest student debt! Keep it up Wolfpack- although it sometimes feels painful during the process, it feels so amazing to be so close to a big financial goal!

I'm sending you and your wife good vibes in the hopes it will help her survive any restructuring at her company.
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touchdowntodd
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Re: The 4-year mortgage payoff plan

Post by touchdowntodd »

im doing a similar things cutting back only on roth ira and family savings for the next 3 years to pay off. .. but i believe i can edge it out in 2 ... WORTH IT imho ...
tryin to do this right... thanks guys
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touchdowntodd
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Re: The 4-year mortgage payoff plan

Post by touchdowntodd »

if you dont mind, ill piggy back off your thread with my own plan ...

i in a 15 yr 4.75 rate mortgage, but being that im paying off in 3 more i dont see justification in paying to refi and couldnt find a free one ..

anyways .. i was at about $120k remaining when we really began the push 2 years ago... previously only paying $100-200 additional per month

today at $78,177.19 (Oct payment does not get drafted until the 15th)

i dont have the same level of income you have (just guessing based upon your payment amounts), but we push hard and this month we should be around $1400 additional to the principal .. im on track to pay that as a minimum monthly which will have me paid off Nov 2015 ...

i do have a classic car ill be selling in the spring which will give me enough to pay off December 2014 (going off of $1400/month unless i can swing more), but we will see if that happens ..

** the trickiest part i can think of so far is when we get to $20k or so and will possibly have the cash sitting to pay off if we desire (savign cash frrom car sale as id rather have it then dump it into the mortgage for now) ... do we then pay off and spend that savings? or just wait the extra 10 months or so and have the money when the mortgage is gone still? tricky, but a heck of an option to have.. no one in my family has ever owned a house outright**

how can i follow this thread? im not seeing options on the board
tryin to do this right... thanks guys
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Re: The 4-year mortgage payoff plan

Post by Default User BR »

touchdowntodd wrote:i in a 15 yr 4.75 rate mortgage, but being that im paying off in 3 more i dont see justification in paying to refi and couldnt find a free one ..
Penfed 5-year home-equity loan at 1.99% fixed, no costs unless an appraisal is needed.


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touchdowntodd
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Re: The 4-year mortgage payoff plan

Post by touchdowntodd »

hmm thats semi interesting ... thanks!
tryin to do this right... thanks guys
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Re: The 4-year mortgage payoff plan

Post by Grt2bOutdoors »

touchdowntodd wrote:hmm thats semi interesting ... thanks!
Keep the cash and pay off in 5 months with part of the balance. Liquidity is important to have. Those last 5 months will go quick.
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bdwilliams
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Re: The 4-year mortgage payoff plan

Post by bdwilliams »

That is amazing. I wish you and your wife the best of luck.
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Re: The 4-year mortgage payoff plan

Post by bargainhuntingking »

Another option to consider is to take the same regular payments that you would make to payoff the mortgage early and place them in a savings account (or equivalent). That way you have a buffer to use in case of an emergency, but if there is no emergency when your original planned early mortgage payoff date arrives, you have a nice lump sum to pay off your mortgage. The upside is that your are rewarded by an early mortgage payoff AND you have liquidity to use the cash just in case of emergency, the downside is that you'll pay more interest than you would have if you contribute directly to paying off the mortgage.

Over a year ago I refinanced to a 5 year ING Easy Orange at 2.9% on a house I bought 3 years ago. The ING mortgage only requires low biweekly payments which are amortized as if it were a 30 year mortgage, but I have been adding additional biweekly principal payments so that the loan is paid off in 5 years. I may cancel these extra payments but continue saving them in a savings account for the increased liquidity/flexibily as I mentioned above or to use as a lump sum payoff when the 5 year term ends.
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WolfpackFan
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Re: The 4-year mortgage payoff plan

Post by WolfpackFan »

Thanks for all the replies of support! It is refreshing to see other people are on the same journey us and have been able to make great progress as well.
Another option to consider is to take the same regular payments that you would make to payoff the mortgage early and place them in a savings account (or equivalent).
We did consider adding our extra principle payments to some kind of short term high grade bond fund, which would earn less than the 3.75% mortgage rate, but would have been a logical option to preserve our liquidity. However, with our ample cash emergency savings account we personally chose to forgo this option, but I'm glad you brought it up because it's a strategy that I think others could consider.
Last edited by WolfpackFan on Fri Oct 05, 2012 9:02 am, edited 1 time in total.
MP173
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Re: The 4-year mortgage payoff plan

Post by MP173 »

Today I am listing a rental house with the intent of using the proceeds to completely pay off our mortgage. We refinanced two years ago for 10 years/3.75% and have been making additional payments as our personal free cash flow permitted.

After a lousy experience with a renter, I decided to sell the house and use the proceeds. With our youngest entering college next year, the thought of being debt free is a great feeling.

Ed
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Re: The 4-year mortgage payoff plan

Post by Sunny Sarkar »

KLM14 wrote:No concern over losing this tax write-off?
DW likes to shop at Kohl's with her 30% OFF coupon.
The family bill pay clerk tries to remind her that it's actually 70% ON.
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porcupine
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Re: The 4-year mortgage payoff plan

Post by porcupine »

Sunny Sarkar wrote:
KLM14 wrote:No concern over losing this tax write-off?
DW likes to shop at Kohl's with her 30% OFF coupon.
The family bill pay clerk tries to remind her that it's actually 70% ON.
:sharebeer
Are you winning the battle? If so, you are probably losing the war. :oops:

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Re: The 4-year mortgage payoff plan

Post by travellight »

I am at the tail end of that refinance with the Penfed loan now. I tried to avoid the appraisal by saying I would take a loan amount that would be below the threshold to trigger the appraisal and they said no deal. Every loan requires an appraisal. Ah well, it's only $300.
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Re: The 4-year mortgage payoff plan

Post by stillsaving »

Mortgage-free is awesome. We got there this year. Very similar situation, $200K @ 4.75% 15-year refi 3 years ago, and NO mortgage today. I like your plan, but our plan was much simpler ... put every spare penny from a tight budget, every work bonus, the change from the couch cushions, you name it, toward the mortgage. :)

The last year, we put over $90K extra on principal. Bank tellers thought we were insane sometimes, as we made it a monthly ritual to walk in with our kids in tow and drop huge $5K - $10K checks on the desk (mortgage was held with a different bank than our primary checking). Insanity, but worth it, IMO. Wife and I are 37 and 38, respectively, and own a $300K home, free and clear. Go for it.
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Re: The 4-year mortgage payoff plan

Post by Default User BR »

stillsaving wrote:Mortgage-free is awesome.
Eh. I've been paid off since June. I don't feel different. Of course, that was a preliminary step to a home-equity loan from Penfed. I wish THAT was done with. Just dragging on.


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runner9
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Re: The 4-year mortgage payoff plan

Post by runner9 »

We decided on a good Emergency Fund amount. I started last month with adding up our savings/checking/CDs/ibonds and subtracting our two credit card bills and that EF amount; paying the difference to the mortgage.
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Re: The 4-year mortgage payoff plan

Post by Saving$ »

I'm totally in favor of all those paying off their mortgages.

The PenFed 1.99% no closing cost 5/5 HEL with what seems to be a $300 fee for appraisal seems like a great deal for those absolutely intent on paying off in 5 years or less. I certainly understand those that like option of having longer than 5 years to pay off if things unexpectedly go south.

What I don't think I understand is, why, if you plan to pay off in 5 years or less, and your current rate is over 2.75%, why would you not refi to the PenFed 5/5 with no closing costs. What am I missing?
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Re: The 4-year mortgage payoff plan

Post by runner9 »

Saving$ wrote:

What I don't think I understand is, why, if you plan to pay off in 5 years or less, and your current rate is over 2.75%, why would you not refi to the PenFed 5/5 with no closing costs. What am I missing?
Personally, we wanted some flexibility so we went with the PenFed 5/5 ARM with no closing. If we pay it off only a percent higher in interest (currently 2.75%) and if a job lose happens we can pay a far lower amount or somewhere in between and pay over a longer timeframe.
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Re: The 4-year mortgage payoff plan

Post by Saving$ »

runner9 wrote:Personally, we wanted some flexibility so we went with the PenFed 5/5 ARM with no closing. If we pay it off only a percent higher in interest (currently 2.75%) and if a job lose happens we can pay a far lower amount or somewhere in between and pay over a longer timeframe.
Agreed. So what is the logical reason that people are not refi'ing to the Pen Fed products with no closing costs?
snyder66
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Re: The 4-year mortgage payoff plan

Post by snyder66 »

Nice win yesterday! Good luck with your payoff. Can you send some good karma to the basketball team?
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Re: The 4-year mortgage payoff plan

Post by WorkToLive »

My logical reason is that I think I can pay mine off in a year and a half and PenFed makes you reimburse closing costs if you hold the loan less than two years (at least for the HELOC). I have a 3.25% rate at the moment so I am staying put.
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G-Money
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Re: The 4-year mortgage payoff plan

Post by G-Money »

WorkToLive wrote:My logical reason is that I think I can pay mine off in a year and a half and PenFed makes you reimburse closing costs if you hold the loan less than two years (at least for the HELOC). I have a 3.25% rate at the moment so I am staying put.
That's fine, but what about PenFed's 5 year HEL? It has the same 2-year rule, but the costs are much, much lower than the 5/5 ARM. If I pay my HEL off in less than 2 years, I'll owe PenFed less than $175 in reimbursed closing costs. I don't think I've seen anybody post a figure higher than $250.

With the spread in interest rates (your 3.25% - PenFed's 1.99% = 1.26%), if you maintain an AVERAGE balance of about $13,000 over the next 1.5 years, you'd break even with your current rate after reimbursing closing costs of $250. Of course, if your average balance is higher than that, you'd come out ahead. And, obviously, if it takes you 2 years to pay it back, you come out even further ahead than if you had kept your current loan.

Of course, the 5-year HEL would also entail a higher minimum monthly payment than your current loan, so it's still perfectly understandable if you're not interested. Just wanted to make sure you knew the reimbursement issue for PenFed's HELs is generally not very high.
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runner9
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Re: The 4-year mortgage payoff plan

Post by runner9 »

So, is there a November update? Maybe's it's delayed by Sandy power outages?
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WolfpackFan
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Re: The 4-year mortgage payoff plan

Post by WolfpackFan »

runner9 wrote:So, is there a November update? Maybe's it's delayed by Sandy power outages?
Yes there is a November update! And yes, I tried to post one earlier this week but the site was down :happy

So I've got quite the update for everyone who's been following along. It's a bit of very good news (at least from our perspective!) that I will share that I hadn't mentioned up until this post.

We are expecting our first child to arrive sometime in December! We are absolutely thrilled to be adding to our family, but at the same time scared and nervous about being parents! So this event will impact our plan, however at this time we're not going to adjust the outlook, we're going to keep the payoff target within the original 4 year span. Our income will be down the 1st 3 months of baby's life due to the wife being out of work for 3 months on maternity leave. Once she heads back to work our income will increase a bit, but we're adding the significant expense of day care. We've signed up for the FSA though to offset some of that cost. I'm sure there are other costs we won't expect either that will impact this plan.

Now on to the details of last months payoff:
Payed additional principal of $3672
New mortgage balance $140,325
Months reduced from mortgage term this month: ~5 months (iirc, i don't have my spreadsheet in front of me at the moment, will update later if incorrect)

The aesthetically pleasing ascii progress chart, broken into 4 years. X=paid month
|XXXX--------|------------|------------|------------|
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Re: The 4-year mortgage payoff plan

Post by usorry »

Congrats! Don't forget to look at the Childcare expense account too.
bungalow10
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Re: The 4-year mortgage payoff plan

Post by bungalow10 »

Saving$ wrote: Agreed. So what is the logical reason that people are not refi'ing to the Pen Fed products with no closing costs?
I considered the Penfed 5-year HEL (even started the application twice), but when a local credit union offered 2.375% for 15 years fixed I jumped on it. My closing costs were higher ($1600ish), but I think the flexibility is worth it to us. We will probably focus our efforts on paying off our investment property mortgage first.
An elephant for a dime is only a good deal if you need an elephant and have a dime.
scone
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Re: The 4-year mortgage payoff plan

Post by scone »

Congratulations for staying on track! We're paid off, and it's a very comfortable feeling indeed. And even though we had to "live like monks" to do it, I'd do it again in a heartbeat. :sharebeer
"My bond allocation is the amount of money that I cannot afford to lose." -- Taylor Larimore
travellight
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Re: The 4-year mortgage payoff plan

Post by travellight »

I am on track to wrap up that penfed loan; they are finally sending loan docs next Tuesday and I just have to sign/notarize and send back. It is definitely a monthly shark bite though; my payment goes from about 2K per month to 5900 per month. That 5 year amortization is rough.
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porcupine
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Re: The 4-year mortgage payoff plan

Post by porcupine »

Optimistic wrote:
G-Money wrote:[...]Also works for many HELs, including PenFed's. But I agree, for mortgages, this does not typically work.
Actually, I have a Home Equity Loan from PenFed and inquired about it. I was told by the member service representative it would not work.
I called my loan servicing representative at PenFed and the answer I got was that it would work. In other words, a payment of $1000 made on 11/15 would be more beneficial than if it is made on 11/30 (assuming that the payment is due on 12/1).

- Porcupine
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WolfpackFan
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Re: The 4-year mortgage payoff plan

Post by WolfpackFan »

December update: We paid an additional $3860 of principle this month, knocking 6 months off of the loan term, and bringing our balance down to $135,682. Wife will be out of work for at least the next three months on maternity leave, so we are not planning on paying anything additional during that period. Should be a fun and interesting next few months indeed. :D

Merry Christmas everyone.

The aesthetically pleasing ascii progress chart, broken into 4 years. X=paid month
|XXXXX-------|------------|------------|------------|

edit: oh yeah we need a slap on the hand, we didn't keep up with the monthly budget this month as keenly as past months and surely went over the $1,000. .. however the budget has been reset on December 1st. Back on the horse.
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runner9
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Re: The 4-year mortgage payoff plan

Post by runner9 »

I hope that all goes well with the delivery; later this month, correct? Please update when the new arrival gets here :D
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soaring
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Re: The 4-year mortgage payoff plan

Post by soaring »

Just do it! Good Luck.

Our first home in mid 80's was much less at 65K but @ 9.5%. Yes 9.5 and that was a very good rate in those days. We vowed to pay off ASAP and did so in 6.5 yrs. It felt very very good. Enjoy when the day comes and all those funds become available for investment.
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rr2
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Re: The 4-year mortgage payoff plan

Post by rr2 »

Good job.

Personally, I can't get myself to payoff the mortgage which is at an interest rate of 3.5% (30 year FRM). We are planning to pay this off in 15-20 years by the time we reach retirement.

Our retirement contributions are important as we don't have any pensions. We max out two Roth IRAs (10K) and two 403bs (34K). Plus, employer kicks in 10% irrespective of any employee contributions. In the 33% bracket (25% Federal + ~8% State), it seems a bit much to forego the tax deferral on $34K. The extra tax bill would be $11K combined federal and state.
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runner9
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Re: The 4-year mortgage payoff plan

Post by runner9 »

And so, for January.....?
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zebrafish
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Re: The 4-year mortgage payoff plan

Post by zebrafish »

I'm on the same plan but w/o the ASCII chart. Good luck!

We put ~20% of our income into retirement and ~30% of our income into extra mortgage payments in 2012. We're about 3 years away from being completely debt free.
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WolfpackFan
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Re: The 4-year mortgage payoff plan

Post by WolfpackFan »

runner9 wrote:And so, for January.....?
Thanks for bumping. I had been meaning to update this thread however our schedule has been a wee bit haphazard lately. Our little girl (our first child) was born right before the new year so we've had a new born ruling the house and consuming nearly all of our free time. Parenthood is pretty crazy!

So our update for January... we paid no extra principle to the mortgage this month due to the wife being out on maternity leave and not bringing in any income. This will probably be the case up until at least March, but this was factored in to the original 4 year plan so all is good on staying on schedule..... for now. Remaining principle balance on mortgage: $134,885.

Happy New Year all.

The aesthetically pleasing ascii progress chart, broken into 4 years. X=paid month
|XXXXXX------|------------|------------|------------|
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