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I Am Debt Free, My Mortgage Countdown #1 – Equilibrium

At Equilibrium

We’re Debt Free!  We don’t have credit card, car, mortgage or any other type of debt!

Two weeks ago, on the Wells Fargo Website, we chose the send “Payoff form” option for our last mortgage payment.

My wife filled it out, and we sat on it, waiting for Wells Fargo to pay our real estate taxes from our escrow.  Now that they did that, we still have to pay our house insurance at the beginning of March, but… We sent in our last official mortgage payment!

Actually the check is sitting on our kitchen counter downstairs, waiting for me to put it in the mailbox!  Tomorrow, I will drop it off at the post office, and then we are finished with it!!!  (Booyah)

We ended up paying off our house in a little over 10 years.

So how did we do it?

Well, first we created an excellent excel spreadsheet (later converted to open office) to do some analysis on our amortization schedule.

Primarily, we used primarily 2 sheets in our House Payments spreadsheet:

  • The actual payment that was recorded sheet.  This sheet was the real deal!  As soon as I made a payment on the house, it was recorded in this sheet.  Not much to this one, pretty cut and dry.  At the top, I calculated the reduction in interest paid by pre-paying, the shorting of the life of the years of the mortgage by prepaying, and the total cost of the initial mortgage plus the interest.
  • The “What If” analysis sheet, was the same as the first sheet, but I copied the formula that referenced the payment amount all the way to point the mortgage would be paid off.  This was my play sheet!  I used this sheet soooo many times to calculation my payment schedule!  It was truly great.

Next for the first year of the mortgage, we made double payments on the mortgage amount, with the excess going toward paying down the principal.  Then later after our son was born (and my wife quit working), we lessened the payment amount to only 1.5 times the original payment amount.

I’m still in disbelief!  I’m at a point of balance and having an “equilibrium moment”, so to speak!

As of this point forward, we will be solidly marching  on a wealth building path (or at least I hope, life sometimes throws some wild pitches at you…).

As the last phase of this final numbness wears off, I’ll tell you what it feels like being debt-free in a future post!

-MR

Update:  An equilibrium moment is when something is in perfect balance!  I don’t owe any debt anymore and nothing is owed to me either!  With the “debt phase“, I’m in perfect equilibrium.  This phase is over!  I don’t plan on ever going into debt that I can’t pay in a month’s time again!

Here are some links to former post in the Countdown series

20 Responses to I Am Debt Free, My Mortgage Countdown #1 – Equilibrium

  1. Congrats man! Time to buy a new Porsche 911 Turbo?!
    .-= Financial Samurai´s last blog ..How To Get Your Super Motivated Boyfriend to Marry You =-.

  2. Thanks :)

    Well, if I save for a few months, I think I can afford a used picture of a Porsche 911 Turbo…

    It is a nice feeling, it’s just taking a while to sink in. The payoff was overshadowed by my sister having her first baby this past weekend.

    She always did have to be the center of attention!

  3. Evolution Of Wealth says:

    I’m interested to see what you are going to do with the money that use to be your mortgage payment. Making 1.5 times your payment must be a pretty big chunk of money that is now free every month. Do you treat yourself to something nice first? Or are you just going to save all that money? If so, where are you saving it to?
    .-= Evolution Of Wealth´s last blog ..Why Your Finanical Planner is Like a Buffet =-.

    • MoneyReasons says:

      @Evolution Of Wealth

      Welcome to my site!

      Most likely, I’ll put the money in stocks (and later bonds) that have a fair dividend/yield. Ideally, I’d like to have the stocks and bonds provide a decent amount of passive income.

      I’m still playing around with ideas…

      When I do get enough of them, and they produce a decent enough payout, I think I’m going to go somewhere big for vacation (or at least for me big). Some place like Hawaii or Europe…

  4. Congratulations!! This is such an awesome achievement.. you and your family deserve a celebration. When I buy a home, I hope I can pay off my mortgage earlier too.

    • MoneyReasons says:

      Thanks WellHeeled!

      Blogging about it for the last few months made it seem to last forever… I started feeling like a kid in back of a car on a trip asking “Are we there yet? Are we there yet?” over and over :)

      Paying of our house made sense at the time, with rates so low, I don’t know if I would do it again.

  5. Sunday Link Rodeo 19 – Special Monday Edition says:

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  6. LeanLifeCoach says:

    And I thought I was having a great day? This totally rocks… Congratulations!

    12 years of a mortgage to go or less and I’ll be joining you!

    More power to you!!!!
    .-= LeanLifeCoach´s last blog ..Combat The Closing Techniques – The Puppy Dog Close =-.

    • MoneyReasons says:

      Thanks Coach!

      It goes fast that’s for sure! Honestly, I think is just a phobia of debt that I have. My wife initially though that I was crazy to try and pay off the house early, but with the way the markets turned out, I think it will work to my advantage. Especially if I start really jumping into the market now…

      It’s an exciting new adventure for me… Hopefully, in a few years I’ll be vacationing where Sam was this past week (or at least on the same island…) :)

  7. MoneyReasons says:

    @Sam @WellHeeled @Coach

    Congratulations to all three of you for your nominations for the Plutus Awards!

    Very well deserved! (virtual clapping goes here :) )

  8. moneyhoneysf says:

    Congratulations MR. MR!

    It must be a great feeling not having ANY sort or type of debt. Unbelievable! So all the earnings every payday is free to be used on anything?

    DH and I are making extra payments as well on our 30 year mortgage. We hope by doing this, we’ll have it paid off in 20 years or so.

    I’ll be keeping post to hear what you’ll be doing with your money from this point out.

    Any hints of an expensive splurge on the horizon for you?

    http://moneyhoneysf.blogspot.com/
    .-= moneyhoneysf´s last blog ..Prize: a $2,000,000 house =-.

  9. MoneyReasons says:

    Thanks MoneyHoney!

    Yep, I can use the money for anything, but most likely it will be used for a lovely basket of investment vehicles… Most likely stocks, mutual funds, etfs and bonds…

    I created a spreadsheet to do “what if” analysis with the payments. I knew exactly when it would be paid off, and how much interesting I would shave off of the cost of the house… Worked out great!!!

    After I buy that Porsche 911 that SAM mentioned above (lol), After a few years of savings, I’m thinking a vacation overseas, Hawaii, Alaska or Gotham City…

    I’m still in Debt-Free shock, I’m floundering a bit now… Hopefully I’ll have a better plan of attack after a few months! :)

  10. MoneyReasons says:

    @Stay at Home Mom CFO
    lol, yeah, it was 10 years in the making. I personally know people that did it in 5 and 1 guy that has never had a mortgage… he/they paid for both of their houses outright. (Grrr, erh I mean great!)

    I see you got a new website, in addition to your current one! Very nice!

    Thanks for visiting!

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  16. Edward Culligan says:

    It must be a great feeling not having ANY sort or type of debt. Unbelievable! So all the earnings every payday is free to be used on anything? What a great feeling. Great Site!

  17. This is a wonderful milestone to achieve. I noticed that your family enjoyed some great vacations since this posting. The memories of swimming with the porpoises will last a lifetime.