Hey everyone! Thank you for stopping by today.
So recently we shared on our social media accounts that we paid off our home. It took us 2 years to pay the remaining balance, but we had the mortgage for 9 years overall.
It took us longer than anticipated because we accumulated other debts before and after having a mortgage. Just to give you an idea, here is a list of all the debts we had to pay off; 3 credit cards, 2 student loans, 2 car loans, and medical bills (they did not go into collections, but we owed on them). I wrote articles about how we paid these debts here, here, and here.
To be honest with you, we weren’t even thinking about paying off our home early during those times because we had other payments we had to make each month including daycare. So what we did was pay the smallest debt balance first and move on to the bigger. We didn’t even care about the interest rates. This was before knowing about Dave Ramsey. A while back, we heard of him but didn’t do our research about what he taught. It’s like hearing about quantum physics but not taking the time to learn the topic. Every time we eliminated a debt, we didn’t add that money to the next debt, we saved a little and added a little to the next debt. We did this for emergency purposes or for a rainy day.
As our savings grew more and more, we looked at what debt we could pay in full. Sometimes it was only one debt, sometimes it was multiple depending on how small or big they were.
Once we heard about the baby steps and having at least $1K saved, we started going gazelle intense (meaning that we were throwing everything at the debt like bonuses and tax returns). We still saved, but not as much as before. Instead, we focused on paying everything down. We finally paid our last car payment in 2016.
So why is it important to pay off your other debts before tackling the mortgage? Imagine if you had an extra $850 a month to add to your mortgage from all the debts you paid off. Would you do it? I’m giving you a hypothetical number, but I encourage you to do find the sum total of every debt you currently have and imagine they were all gone or paid for. Not only would you get an instant raise, but you’d have a lot more money to manage for your goals. I’ve added a link here so you can see how many years extra payments can shave off your mortgage.
Also, no one wants to hit a brick wall. It’s best to knock that wall down. How can one pay off a home faster if one keeps acquiring debt?
I know when it comes to homes, every case is different. It may not be your forever home and you probably don’t want to pay it off. My suggestion would be to save the extra cash you have from eliminating your debts for a down payment on your new home and rent the property out when you leave. The first property is still being paid down and you may get extra income towards your new home. You can also sell it.
All in all, if we can do it, so can you! You got this! If you are in your forever home, please consider this first step to paying off your home quickly. Do you have plans to pay off your home in less than 30 years?