Couple Shares 5 Tips On How To Pay Off Your Mortgage In 5 Years
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Andy and Nicole Hill bought their dream home at the end of 2013. Andy was traveling for work at the time when his wife checked out the house.
“This home had everything she was looking for,” remembers Andy, “including an attached garage, open floor plan, updated kitchen, walk-in closet, and a big backyard on a half-acre lot. She told me that this was THE ONE.”
Andy wanted to give his wife the home of her dreams but was a little gunshy. Andy took a bath on a home purchase in 2009 and owed more on the house than it was worth.
The husband and wife decided this time around. If they were going to buy a home, they were going to do things much differently. The couple agreed to work hard to pay off the house in five years.
The Hills are now the hosts of the popular podcast “The Marriage, Kids and Money” and explained in this article how they accomplished this feat.
“Given my history with mortgages and feeling overwhelmed by the realities of homeownership, I had some ideas that would help us to pay off our mortgage in 5 years. That way, Nicole would get the house of her dreams, and I would get the mortgage-free life.”
Here are the 5 steps the Hills took to pay off the mortgage in just half a decade.
Get a 15-Year Mortgage
“Looking back, the 15-year mortgage was one of the best decisions we’ve made so far,” explains Hill.
“When we bought our new house in 2013, the rates were at an all-time low. We worked with LendingTree and got hooked up with a $195,000 15-year mortgage at a 3% interest rate with no points. This 15-year mortgage had higher monthly payments of around $1,900 (including taxes and insurance), but the bulk of it was going to the principal every month instead of our mortgage company’s pockets.”
Make Additional Monthly Payments
The Hills cut corners and stopped wasting money on going out to dinner, cable, dialing back the grocery bills, and saying no to family friends if it involved spending more money.
“Although these sacrifices felt difficult, we had a healthy income between $160,000-$180,000 during the mortgage payoff process. So it wasn’t that much sacrifice really, it was more just us getting used to the ‘new normal.'”
Hosting A Monthly Budget Party
The Hills ordered pizza once a month, sat down with a glass of wine, and went over their spending and bills.
“The monthly party consisted of pizza, a glass of wine, and us developing a zero-based budget through Mint where every dollar we earn each month is committed. This way, we were controlling our money instead of our money controlling us.”
This is an odd suggestion considering the couple cut out unnecessary expenses, but Andy stresses that the pair still wanted to live a life while saving money to pay off the mortgage.
“The last thing we wanted to be was ‘house rich and life poor.’ I can accurately say we still had fun during the mortgage payoff process. I think Nicole would agree. Everyone defines fun differently. For us, it meant things like: Having themed birthday parties for our kids, spending time together for a date night, and going to Detroit Lions games (more torture than fun, really).”
Dream Big Dreams
Finally, the Hills set goals for what they would do after paying off the house. This motivated them to stay on track.
“In order to stay motivated and excited about paying off the mortgage, we constantly reminded ourselves why we were doing this. When we paid off our 15-year mortgage, we would: go on more family vacations, help our kids graduate student debt-free, buy a rental property, and give to more charities.”
If you’re interested in exactly how the Hills paid off the mortgage, here’s a year-to-year breakdown for the home plus the money the couple put towards the house to reach their goal.
[via Marriage Money and Kids]