Paying Off My House Early: Can It Be Done?

Paying Off My Home Early

I have wanted to be debt free for a long time, but I’ve only been serious about it for the last year. Still, I am saddled with debt, and at 38 years old, it’s not a pretty picture for me as far as financial independence goes. I am still about $37,000 in personal debt, which will be paid off by minimum payments in six years. I plan on snowballing the debt, though, so once the first loan is paid off in 2020, I will decrease the amount of time it takes me to pay through the rest of the debt.

My debts are as follows:

Student Loan $14,397.30

Car Loan $14,905.64

Personal Loan $8,531.51

I also owe $156,000 on my home with 28 years left on the mortgage. The thing is, I don’t want to wait 28 years to pay off my house. Actually, if I had magic wishes, it would be paid off today. Since I don’t have magic wishes to pay off the home, I did a little bit of work with an amortization calculator and found that if I were to pay an additional $275 per month, I would have my home paid off in 17 years which would put me at age 55, my current goal retirement age. Doing this would save $48,000 in interest and reduce the term of my loan by 11 years.

Why I Want To Pay Off My House Early

I’ve been doing a little thinking about why I want to pay the house off early, and I am not sure that I have any good reasons to do so. I know that it is recommended to put the money into a retirement account instead of paying off the home early, but the idea of not having a mortgage payment is incredibly alluring to me. My mortgage is my biggest monthly expense, and if it were to be taken care of by the time I was 55, it would make early retirement much simpler. I think there is a security factor as well. There is something very comforting about the thought of owning a home free and clear.

Will I Actually Do It?

As of today, I don’t think I am in a position to begin paying extra on my mortgage. As much as I want to and as excited as I am at the prospect of having a paid-off house, I think that the smart thing to do is to continue to build my emergency fund and save for taxes. Once the emergency fund is built up to $5000, and I have saved enough to cover next year’s tax bill (I am expecting to owe $6000), I will begin putting extra money toward my debt every month. Once the debts are taken care of, I will begin saving for retirement, including putting extra money towards the house. As tempting as it is to put the $275 a month into the house beginning next month, I don’t think that it is the right choice. I can still pay the home off by 55 by contributing more than $275 at a later date, and when the debts are free and clear, this will be much less of a strain to do. My tax bill shouldn’t be as high as it is. I mean, I am not complaining about tax rates, though I think I pay too much, but I just shouldn’t owe as much as I do at the end of the year. I have tried to rectify this by having additional withholdings every month, but I didn’t start early enough this year to cover what I will owe. Not having to manage that money every year will also make things easier for me financially because it is tempting to spend what I am saving for taxes when an opportunity arises or when I am bedazzled by a shiny object or a burrito. 

One Comment Add yours

  1. It is hard to tell without understanding your complete expenses. Also, if your interest rate on your mortgage is lower, pay off the student and other debt that might have higher interest rates. Lastly, take a look at all your expenses to see what other expenses you can reduce.

    A suggestion on your real estate taxes – protest the valuation every year. We live in Texas and home owners have the right to protest tax valuations annually. I do this EVERY year. Some years we knock the tax value down significantly, other years not so much. If you don’t know how, there are companies that you can pay to protest and lower your taxes.

    Best wishes

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