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


  • Jackie Beck and her husband bought their house in Tempe, Arizona in 2008 with a mortgage of $ 99,600.
  • Once they paid off their credit cards, student loans, and car debt, they focused on their home.
  • By regularly making additional payments and refinancing at a lower rate, they paid it off in 2012.
  • Read more stories from Personal Finance Insider.

Buying a home is the most expensive purchase most of us will ever make in our lifetime. And while most of us have been tied to a mortgage for decades, we probably would all like to cancel our mortgage payments sooner.

This is what Jackie Beck and her husband managed to do. By 2008, they bought a house together and finished paying off their credit cards, student loans, and car loans. They then had a crazy thought: what if they also paid for their house?

“We knew how great it was to be free of student loans, car payments and credit card debt,” says Beck, personal finance blogger at JackieBeck.com. “I kept thinking about how great it would be to be completely debt free. We wanted to make it happen so we had the freedom to do more of the things we love.”

Even though they weren’t sure exactly how to go about it, they were determined to find out. Fast forward a little over three years, and Beck and her husband had depleted their mortgage balance – just over $ 99,000 – on their home in Tempe, Arizona. Here’s how they did it.

1. They made additional payments on their principal

To cut back on the principal, they started by sending an additional $ 35 per month. As they got used to paying a little more each month, they gradually increased that amount over time. Beck also didn’t wait until the end of the month to make an additional payment.

“When we got the extra money, we sent it to the manager,” says Beck, who is in his 50s and currently lives in western Michigan. Some months they sent up to eight additional payments.

Before the couple decided to make any additional payments, they sifted through their mortgage contract to make sure they could make as many payments as they wanted, as often as they wanted, at no cost. nor penalty.

2. They found ways to earn extra money

To raise money for these extra payments, Beck and her husband worked as hard as they could to earn extra money. At the time, Beck was working as a web content administrator and her husband was a quality assurance analyst. In addition to earning income from their day jobs, they worked odd jobs like doing $ 5 surveys. On top of that, Beck worked almost full time on his side business.

Beck remembers depositing $ 5 checks while doing online surveys, and the cashier was laughing. “I always thought, ‘Laugh if you want, but we’re going to have a paid house! “I would say every little bit counts, especially when you make paying off your home a priority and want to stay focused on your goal.”

3. They refinanced themselves at a lower rate

When they decided to take the plunge and pay off their mortgage ASAP, their 15-year mortgage had a balance of $ 99,600 with a minimum monthly payment of $ 768.31. The interest rate was 4.625%. After paying off almost half of the balance, they refinanced the remaining $ 49,500 into a 3.250% 30-year mortgage. This brought their monthly payment down to a very low amount of $ 215.43.

Here’s the problem: Even though the Becks only needed to pay $ 200 a month, they continued to pay the old minimum monthly amount, plus a premium. The additional amount varied a lot and ranged from $ 31.69 to almost $ 13,500 last month. (They dipped into their savings for that final payment.) “The closer we get to the end of the mortgage, the more we sent on average,” Beck says.

4. They don’t go into debt

If she and her husband had racked up debts while they focused on paying off their mortgage, it would have been more difficult for them to make additional payments.

While paying off their mortgage, the Becks made a point of not getting into debt by joining four simple rules: only spend the money you already have; think about the tradeoffs of a certain purchase and whether it is worth it to you personally; ask yourself if you wanted or needed something before hearing about it in an advertisement; and wait at least 24 hours before making an unexpected purchase.

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

a ranch style home in Tempe, Arizona stands against a blue sky

The Becks’ former home in Tempe, Arizona.

Courtesy of Jackie Beck

Do not get discouraged

For those who would like to aggressively cancel their mortgages, Beck says don’t be discouraged if you live in a part of the country with a higher cost of living. “If you think you might also be able to pay off your mortgage sooner if you owed less than $ 100,000 on it, or that doesn’t apply because you live in an area with a high cost of living? , you are missing the point, ”she said. said. “Maybe you can’t do it that fast, but that doesn’t mean you can’t do it. You can still improve.”

At the end of the day, she adds, it’s not about how much you owe. It’s about what you do with your money. “Make it a priority and keep working on it until you’re done,” says Beck. “It doesn’t have to be the same amount every month, or it doesn’t have to be any schedule. Just keep sending extras! Every little bit counts.”

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