Paying off the mortgage fast.

I’m not the brightest when it comes to finances, business, and legal jibber jabber…but I’m about to educate myself big time!

Every month I pay my mortgage.  It’s small, I don’t question it.  I get online and put in those numbers in my online payment through my bank.  I don’t open the bill when it comes and I don’t see how much it’s going down.  Until the other night.

When we purchased this home the lender made a comment about “you don’t even want to see what you pay in interest over the years, it’s too depressing.”  At the time I just wanted the keys to my newborn home and I ignored her comment.  But now I get it.

When my little brain figured out that Principal is a fancy term for the mortgage I was shocked that out of $918.02 only $173.83 is actually going toward the mortgage and $499.44 is going to the bank for interest.  No wonder the banks are thrilled with the rising prices in the housing market.  They laugh heartily all the way to their banks.

How do they get all those sheep to buy homes for outrageous prices that they can never pay off?  I’ll tell you how. They announce a housing shortage!  That gets everyone freak out and willing to pay whatever the price to get some housing security.

Well, the joke is on us.  I see people with huge homes that cost a pretty penny and they don’t even live in the homes.  The homes are empty, cold, neglected, with chipping and peeling happening because there is no love or living happening in the home.  The yards are barren and lifeless, maybe a dead plant.  Where are the humans that live there?  They are at work.  All of them are out working 50 to 60 hour weeks and then commuting another 10 plus hours.  The house is a huge shelter to sleep in and that is about it.

If I’m paying more than half my mortgage just in interest, insurance, and tax, what is someone paying on a 500K house?  And we are now at pre-crash levels from 2008 housing market.  The forecast is another 2 years of going strong on housing prices rising and plenty of fools to pay the price.  Wow, foreclosure city here we come!!

So, what to do with all this new thought?  First, stop being a fool.  Stop playing this game that only gets the banks and realtors and brokers rich.  You are a pawn.

Either wait for a crash…oh yes, it will come.  It takes a couple years of the sheep paying the mortgage just barely for them to become frustrated and figure out they have been dupped.  Then the meltdowns start happening and the bankruptcies and foreclosures.

Wait for it and swoop in when it’s all crashed and homes are cheap.  Buy a foreclosure, HUD, or short sale.  Buy a double-wide trailer.  By a cheap modular.  By an old fixer-upper in a decent neighborhood.  Get it as cheap as humanly possible.  Move to a dusty town that is still cheap.  Be creative.  It’s amazing what you can do with a run-down home with just a good scrub, paint and tons of planting green things.  I know.

Then get that mortgage paid off fast.  The faster the less that you waist making the bank fatter.  Here is a breakdown and then some tips.

This is from Dave Ramsey’s site:

A 15 year nonadjustable vs a 30 year nonadjustable mortgage.  This was the example used and shortened by me.

Say you have a $225,000 mortgage at 6% = $1349 monthly payment.  At the end of the 30 years, you will pay $486,000.

If you do 15 years it would be a monthly payment of  $1899, however, at the end of 15 years, you would pay $342,000.

You would save $144,000.  Wowie zowie!

Tips for paying a 15 year even faster.

  • Pay an extra $100 a month.  Saves 10’s of thousands in the end.
  • Pay a double payment quarterly and if you can’t do that try to pay an extra payment at the end of the year.

How to make extra money without all the commute full-timetime hardship:

  • If you are a homemaker, see about some work from home, babysitting, starting a daycare, blogging, writing, and other little jobs to make the extra cash.
  • Get a little part time job.  Clean houses, walk dogs.

How to save like a pro:

  • Learn to live super duper frugal and thrifty.
  • Go on a no spend year but tailor it to your families needs.
  • Cook from scratch, brown bag it, buy in bulk, coffee to-go from home.
  • Thrift stores, the library, and free stuff on Craigslist or free swaps will be your default setting.
  • Down size, declutter, learn to live simply and with much less.
  • Grow your own food.
  • Hang the clothes out.
  • Drink your water with a Brita filter.  No buying water.
  • Learn to live the old fashioned way.
  • Pay off that debt and you’ll have so much more money.
  • Watch Dave Ramsey.
  • Get The Complete Tightwad Gazette and my book The Homemade Housewife.
  • Watch my YouTube Channel Dirt Poor and Lovin’ It! and many other frugal people.  Learn from them.

I’m right there with you and I’m doing a no spend year.  I’ve reduced our budget to $2,000 a month with an increased payment on the mortgage.  I will be switching our mortgage to a 15 year and make that extra payment yearly.  We are living hardcore frugal and it’s turning out very fun.  We are being pushed to get smart and I feel more creative than ever.  My husband and I are more productive than ever and our family time and work on the mini-city farm has increased in quality.

Good Luck!!

 

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16 comments

  1. I’m betting you will have it paid in 7 years. My mom’s #1 tip for saving money on healthy food was “make soup”. If I write a book I think that will be the title 😜
    It is also an easy way to make healthy vegan food for a busy Mom (or Dad or anyone).

    Liked by 2 people

  2. I agree with your aim to get the mortgage paid off fast…five years before we retired, we still owed $50,000 on our mortgage. My goal was to pay it off in five years, so we adjusted our spending and put all our extra on the mortgage, I could see paying it down $25,000 with all our expense cuts, but the other $25k was just a plug…but over five years, that extra money arrived from all sorts of different sources, unexpected bonuses, selling things etc. really was a miracle, so aim high! The universe will support you!

    Liked by 1 person

  3. Hi Kate!
    If I have understood all my playing around with mortgage calculators correctly (I use HSH Mortgage Calculator), you don’t necessarily need to switch to a 15 year mortgage. Just faithfully pay the higher amount that that would be required with a 15 year, but keep your 30 year. The hard part is just being faithful to do it. The one benefit of actually switching is you would be forced to pay the higher amount and couldn’t back out and use the money for something else.

    Liked by 1 person

    • Thank you for that advice and this will be great for others to read. I wrote this post so long ago and did more research after to find out what you just explained. We did not switch and that saved us another closing cost. It is hard to pay more though, when you don’t have to.

      Liked by 1 person

  4. One more thing….you would LOVE “The Prudent Homemaker” blog (maybe you already read it). She shares the amazing ways she stretches her food budget to feed her 8 children for pennies.

    Liked by 2 people

    • Sorry…change that…the Prudent Homemaker is great for food budget, but for overall lifestyle, I think you would really love the Down to Earth blog. It has a similar feel to your blog…she so appreciates the coziness of home, grows backyard food, an uses homemaking skills for a more frugal lifestyle (in Australia)

      Liked by 1 person

      • You have my style pegged!:) I have spent 45 minutes enjoying both blogs but Down to Earth is by far my cup of tea. I did get some ideas from the Prudent Homemaker. She makes me think harder about my pantry and stocking up. I feel like hard times are on the way as well (she says that in one of her stories) and I like being prepared. But her yard is not my style. I’m more funky and she puts me to shame. Both these women are amazing and make me feel like a fraud. I know nothing!

        Liked by 1 person

  5. Good morning, I’m in Southern California for a few days just a short vacation. If you were in this part of CA, I would of tried to see if we could meet. This is a cash-flow trip that we planned months for.
    Back to mortgages, YES- do whatever you can to pay extra and pay it off. We worked hard to pay off our mortgage early before husband retired and it was actually fun and like a game to see what we could cut and how much we could throw at that mortgage each month.
    Now, we are tired of vehicle payments and are planning to pay them off. Even on vacation, I’ve been writing down and plotting out numbers for a monthly budget.

    About the prudent homemaker, have you read her posts on how to eat beans everyday? It might be helpful to your in veggie lifestyle.

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  6. You are getting wiser everyday!! When we bought our last house, we financed for only 15 years, but we hope to pay it off early, too. When you see those finance charges, it’s ridiculous to know we end up paying THAT much for the house! We think we recoup the costs when we sell it, but we never do, I don’t think. That’s why I sometimes think that renting is just fine… either way we throw away a lot of money. However, I do love owning our home and never having to deal with a landlord!

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    • I was shocked when I realized how little we pay on the principle! I didn’t even know what the heck the principle was. It’s the landlord thing I’m so grateful for not having to deal with although we always had good ones. And increased rent.

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