Hi everyone! Thank you so much for reading. I've gotten a ton of kind words from the blogging community since I launched and I'm very excited to continue sharing my mortgage payoff journey with everyone.
Marc from VitalDollar.com was kind enough to do an interview with me about his paid off mortgage. Enjoy!
What was the most influential factor in deciding to pay off your mortgage?
The biggest factor for us was the unpredictability of our income. We bought the house in 2010, and at the time we both had full-time jobs and we had no kids. In 2012, our daughter was born and my wife left her job to be a stay-at-home mom. So we went from a family of two living on two incomes, to a family of three living on one income.
I’ve been self-employed since 2008, so my income is unpredictable. Overall, it’s been good, but we’ve always felt like there are no guarantees for the future.
Originally, our plan was to pay off the mortgage in 30 years by just making he standard monthly payment and prioritize saving and investing for retirement. In 2013 and 2014 we received some lump sums from a website that I sold. We got 80% of the money at the time of the sale in 2013 and we invested as much as we were able to.
In 2014, when we got the final 20% we talked about whether we should invest it or use it to pay off the mortgage. Ultimately, we decided to pay off the mortgage (4 years after we bought the house), but we did have to take some money out of savings because the final lump sum payment wasn’t quite enough.
We felt that with an unpredictable income, the added peace of mind from having the mortgage paid off was important. In 2015 we had our second child, a son. Having two young kids to provide for really changed my perspective. It’s nice to know that we don’t have to worry about being able to make a mortgage payment.
Was your significant other on the same page or did it take some back and forth to decide to tackle it?
Yes, we were on the same page. We talked through the decision and we were both open to considering our options. In the end, we both felt the same way.
Another big decision came a few years later. In 2016 (two years after we paid off the mortgage) we decided to move to get more privacy and a bigger property. After being mortgage-free for two years we didn’t want to go back to having a mortgage. We had to spend more money to get the bigger property, but we decided to pay cash for the house rather than going back to a mortgage. We were both in agreement on that decision as well.
Did you make any sacrifices when paying off the mortgage? Do you regret any of them?
The biggest sacrifice was not being able to invest the money that we used to pay off the mortgage. I would have liked to invest it, but we felt like we already had a good start on our retirement savings (I was 35 and my wife was 33 at the time).
Did you celebrate paying off the mortgage? If so, how?
No, not really. We may have gone out to dinner, but that would have been the most we did, and honestly, I can’t even remember if we did that. We told our parents about it because we wanted to tell someone, but we didn’t tell other family or friends (although it has come up in conversation with a few people since then).
How did it feel waking up with no mortgage? Did anything feel different? What surprised you the most?
It didn’t feel significantly different, but I do feel a little bit less stress knowing that it’s one less thing to worry about.
For me, paying off the mortgage wasn’t really about preparing for retirement or progressing towards financial independence (although those things are important to me). To me, it was really all about increasing the odds that I’ll be able to provide for my family for several years to come, which has been on my mind a lot since having kids.
The thing that surprised me was that nothing really happened. I called the bank to get our mortgage payoff and then I did a wire transfer to make sure they got the right amount by the right date, and then nothing really happened. I don’t know what I expected, but I guess I thought there would be some documentation sent in the mail to prove that it had been paid off, but that didn’t happen. I could login online and see that the balance was down to $0, but that was about it.
Any other random thoughts on paying off mortgage, being completely debt free, etc?
Although we’re debt free and have no mortgage to pay every month, there are still plenty of living expenses related to owning a home. Our property taxes are on the higher side for a rural area (almost $9,000 per year) and there’s always maintenance and upkeep related to the house and the property. Owning a home still isn’t cheap, even without the mortgage (but it’s definitely better).
Want to know more about Marc's mortgage-free life? Check out his blog post:
Many thanks to Marc for answering my mortgage questions! Here are some followup thoughts I had about his responses.
Marc's Why: His Family
Marc's top reason for paying off the mortgage (unpredictable finances) makes a ton of sense to me. I have always worked at startups (first at tech startups and now at my own retail/manufacturing startup) and I think we all know that startups are risky business. Even the biggest startups I worked for were fraught with instability (departments getting laid off, c-level executives moving to other companies, etc). I loved them though--startups offer an opportunity to actually make a difference in the company and as a work at home programmer I usually got the benefit of a flexible schedule. I was getting a steady employee paycheck, but it still never felt safe to me. I got the mortgage based on this income, but was it really a safe bet for 15 years? If it wasn't, would I be able to find a new job that paid a similar amount? What if I got in an accident and my mental faculties were affected? I have a little more control now that I am a business owner, but my income is still unpredictable.
"Having two young kids to provide for really changed my perspective. It’s nice to know that we don’t have to worry about being able to make a mortgage payment." -Marc from Vital Dollar
I don't have kids, so this isn't something I've thought about, but it's such a good point! If someone has kids and they lose a job or a source of income, their mortgage or rent is usually the most expensive and important bill they face. Making it easier to keep a roof over your kids head (no matter the opportunity cost of investing) seems like a fantastic thing to do as a parent.
Marc And His Wife Deserve A Trophy
Not only did they pay off their mortgage, they PAID WITH CASH when they moved to a new house 🙌! These are #lifegoals, people!
That is exactly what I plan to do if I ever buy more property. I am impressed and excited to know that other people have successfully done this.
On Investing Regret
Marc's biggest regret was not investing the money he used to pay off his mortgage, but this was alleviated a bit by already having some retirement savings. I can definitely relate to this. I am focusing on paying off my house as my #1 priority, but I already have a solid foundation of retirement savings and I'm still contributing monthly to retirement. If those two things weren't true, I would definitely think twice about making prepayments on my mortgage.