4 steps a couple took to pay off their mortgage in 3 years



  • Jackie Beck and her husband bought a house in Tempe, Arizona in 2008 with a $ 99,600 mortgage.
  • After they paid off their credit card, student loans, and car debts, they focused on their home.
  • By regularly making surcharges and refinancing at a lower rate, they paid them back by 2012.
  • Read more stories from Personal Finance Insider.

Buying a home is the most expensive purchase most of us will make in our lives. And while most of us have been tied to mortgages for decades, we probably would all like to pay off our home loan payments early.

This is what Jackie Beck and her husband managed to do. Back in 2008 they had bought a house together and finished repay your credit cards, student loans and car loans. Then they had a wild thought: what if they also pay for their house?

“We knew how great it was to no longer have a student loan, car pay, and credit card debt,” says Beck, a personal finance blogger at JackieBeck.com. “I just kept thinking about how great it would be to get out of debt completely. We wanted this to happen, so we had the freedom to do more of what we love. ”

Although they didn’t know exactly how to do it, they were determined to find out. Fast forward a little over three years, and Beck and her husband knocked out their mortgage balance – just over $ 99,000 – at their home in Tempe, Arizona. Here’s how they did it.

1. They have made additional payments against their principal.

TO relinquish a principalThey started by sending an extra $ 35 a month. As they used to pay a little more each month, they gradually increased this amount. Beck also didn’t wait until the end of the month to pay the extra fee.

“When we got the extra money, we sent it to the director,” says Beck, who is in her 50s and currently lives in Western Michigan. In some months, they sent up to eight additional payments.

Before the couple decided to make additional payments, they combed through their mortgage agreement to make sure they can make as many payments as they want, as often as they want, without any fees or penalties.

2. They found ways to make extra money.

To raise cash for these extra payments, Beck and her husband worked hard to earn the extra dollar. At the time, Beck was working as a web content administrator and her husband was a quality assurance analyst. In addition to income from their main job, they also earned odd jobs, for example, they conducted surveys for $ 5. On top of that, Beck worked almost full time on her side business.

Beck recalls investing $ 5 checks in online surveys and the cashier laughed. “I always thought, ‘Laugh if you like, but we will have a paid home! “I would say that every little thing helps, especially when you make paying for the house your priority and want to focus on your goal.”

3. They refinanced at a lower rate.

When they decided to take the plunge and pay off their mortgage as quickly as possible, their 15-year mortgage had a balance of $ 99,600 for a minimum monthly payment of $ 768.31. The interest rate was 4.625%. After they paid off nearly half of the balance, they refinanced the remaining $ 49,500 into a 30-year mortgage at 3.250%. This brought their monthly payment down to an ultra-low $ 215.43.

Here’s the thing: Even though the Becks only had to pay $ 200 a month, they continued to pay the same minimum monthly amount plus additional ones. The incremental costs ranged from $ 31.69 to nearly $ 13,500 in the last month. (They pulled that last payment out of their savings.) “The closer we got to finishing the mortgage, the more we sent on average,” Beck says.

4. They didn’t get into debt.

If she and her husband had accumulated any debt while they were focused on paying off their mortgage, it would be more difficult for them to make the additional payments.

By paying off the mortgage, Becky made a commitment to avoid debt by sticking to four simple rules: spend only the money you already have; Think about the trade-offs of a particular purchase and whether it is worth it for you personally; ask yourself if you wanted something or needed something before you found out about it from advertising; and wait at least 24 hours before making an unplanned purchase.

By adhering to these simple rules, they avoided making too many impulsive purchases or spending money on things they didn’t really need and don’t need.

Ranch-style house in Tempe, Arizona, against a backdrop of blue sky

Former Beck home in Tempe, Arizona.

Courtesy of Jackie Beck

Dont be upset

For those who wish aggressively knock out their mortgagesBeck advises not to get upset if you live in a part of the country with a higher cost of living. “If you think you can pay off your mortgage early if you owe less than $ 100,000 on it, or that it doesn’t apply because you live in an area with a high cost of living, you’re missing the point,” she says. “Maybe you can’t do it that fast, but that doesn’t mean you can’t do it. You can still make progress. ”

After all, she adds, it’s not about how much you owe. The point is what you do with your money. “Make it a priority and keep giving it up until you’re done,” Beck says. “It doesn’t have to be the same amount every month or be on any schedule. Just keep submitting more!


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