I've been working on paying off my mortgage for some time now. I wish I'd started sooner because I would have made more progress with less work, but alas... better late than never!
For anyone who doesn't know this about mortgages, when you first start to pay it off, the vast majority of your payment goes toward interest, and only a tiny percentage goes toward principal reduction.
But with each payment that you make, the percentages shift ever so slightly so you're paying off more and more principal as you go.
To make it even more complicated, the number of payments you have left is calculated by the amount of remaining principal, so if you make extra principal payments at the beginning of a mortgage, you can really take a huge bite out of the length of the loan with very small extra principal payments.
I'm not sure I did a great job of explaining that, but suffice it to say that I could have gotten here quicker if I'd started sooner. But I guess that's the case with all things.
Anyhow, that's my circuitous introduction to my announcement that I only have 5 payments left to make on my mortgage. Woo Hoo!
Of course, my mortgage was never that big to begin with. When I bought my house, I spent over a year looking. I didn't have much money (I was only making about $14k/year at the time) which meant that qualifying for a loan was gonna be a challenge.
Fortunately, there were two wonderful women taking lessons at the music school where I worked who helped me out. One was a realtor and the other a loan broker, so with their help, and the gift of a down payment from my parents I ended up settling in a working class neighborhood on the west side of Denver.
Anyhow, I bought my house in 1995 for $63K and with the big down payment my loan was only $50K to begin with. Still, it was a big deal when I first moved in. I went from paying $285/month rent - which included utilities, to around $650/month all told (principal, interest, insurance, taxes & utilities.)
Interest rates were 9% back then - my how times have changed! I refinanced once to 6.25%, and thought about trying to refinance again when the rates really fell, but by that point the loan was so small that nobody would touch it.
So at that point I got really aggressive about paying it off by making extra principal payments each month as well as cashing in a few CDs to make some big lump sum principal payments. I figured there was no point keeping my money in CDs that were earning less than one percent interest when it could go toward paying off a 6.25% interest loan!
My parents, who hate debt even more than I do, got into the act, and for the past few years they've given me money to help pay it down further in lieu of Christmas and birthday presents.
I'll still have to pay taxes, insurance and utilities, but all told I'll be saving about $450/month.
I'm not sure what I'll do with the extra cash... probably just replenish my savings accounts for the moment. But it sure feels nice to know that very soon I'll have one less albatross hanging around my neck!