We would have enjoyed living in the spacious half million dollar home with granite countertops and Brazilian cherry floors with walnut inlays, but we wanted a home we could pay off in half the time. I've heard a lot of people say they couldn't afford a 15-year mortgage so they had to choose a 30-year mortgage. I looked at it a different way when I was shopping for homes. My husband and I didn't even consider homes we couldn't afford to pay off in 15 years. Now that we have been living in our home for 9 years, we are glad we made the choice to go for a more affordable home. According to an article on DaveRamsey.com, 97.3 percent of people do not systematically pay down their mortgages. Although I did pay extra on my mortgage, it took being underwater to motivate me to consistently tackle my mortgage debt.
Starting with a 30-year mortgage
My husband and I started with a 30-year fixed mortgage the new home we purchased for $183,000. We figured we would just "pretend" we had a 15-year mortgage, paying the extra money ourselves every month. In reality, we spent money on furniture, hardwood oak floors and accessories. When the government offered a free refinance during the Great Recession, we made the switch to a 15-year fixed rate mortgage. Having a new, lower interest rate made up some of the savings we missed out on by waiting to pay down our mortgage.
Becoming a serial refinancer
One of the reasons some experts advise against refinancing is because people tend to start the clock all over again at 30 years. We refinanced a second time only because the rates hit 2.75 percent on a 15-year fixed mortgage. Because we shorted the length of our original loan and paid extra, we only had to refinance $100,000. We refinanced the second time 8 years after we first bought our home. If we just paid the minimum on our new 15-year loan, we'd have it paid off after 23 years of living in our home.
Learning from our mistakes
I learned that it's human nature to think I would pay off my 15-year mortgage early even though most people don't. According to an article by Consumerism Commentary, setting up automatic payments to pay down the mortgage is better than relying on pure will power. After our second refinance, I set it up to automatically pay an extra $250 toward our mortgage each month. By paying that extra amount, we will have our mortgage paid off 15 years after we moved into our home.
We have already knocked 8 years off our mortgage and plan to erase another 7 years with our automated extra payments. Paying extra on our mortgage hasn't been a financial burden because we didn't buy a home with payments that were only manageable with a 30-year term. Scoring lower interest rates through the years has only made it easier to afford our home. We have more peace of mind knowing we can afford our mortgage on one income. But the best thing becoming mortgage free by the time I'm 50 so I have a shot at early retirement. I can also choose to keep working to pay for the upgrades to our homes, but I doubt exotic wood floors or a gourmet kitchen will be a priority.
Starting with a 30-year mortgage
My husband and I started with a 30-year fixed mortgage the new home we purchased for $183,000. We figured we would just "pretend" we had a 15-year mortgage, paying the extra money ourselves every month. In reality, we spent money on furniture, hardwood oak floors and accessories. When the government offered a free refinance during the Great Recession, we made the switch to a 15-year fixed rate mortgage. Having a new, lower interest rate made up some of the savings we missed out on by waiting to pay down our mortgage.
Becoming a serial refinancer
One of the reasons some experts advise against refinancing is because people tend to start the clock all over again at 30 years. We refinanced a second time only because the rates hit 2.75 percent on a 15-year fixed mortgage. Because we shorted the length of our original loan and paid extra, we only had to refinance $100,000. We refinanced the second time 8 years after we first bought our home. If we just paid the minimum on our new 15-year loan, we'd have it paid off after 23 years of living in our home.
Learning from our mistakes
I learned that it's human nature to think I would pay off my 15-year mortgage early even though most people don't. According to an article by Consumerism Commentary, setting up automatic payments to pay down the mortgage is better than relying on pure will power. After our second refinance, I set it up to automatically pay an extra $250 toward our mortgage each month. By paying that extra amount, we will have our mortgage paid off 15 years after we moved into our home.
We have already knocked 8 years off our mortgage and plan to erase another 7 years with our automated extra payments. Paying extra on our mortgage hasn't been a financial burden because we didn't buy a home with payments that were only manageable with a 30-year term. Scoring lower interest rates through the years has only made it easier to afford our home. We have more peace of mind knowing we can afford our mortgage on one income. But the best thing becoming mortgage free by the time I'm 50 so I have a shot at early retirement. I can also choose to keep working to pay for the upgrades to our homes, but I doubt exotic wood floors or a gourmet kitchen will be a priority.
