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In September 2018, we bought our first house.
In July 2019, we paid it off.
ONLY 282 DAYS with a mortgage!
Here& #39;s exactly how we did it.
https://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten">
|| THREAD ||
In July 2019, we paid it off.
ONLY 282 DAYS with a mortgage!
Here& #39;s exactly how we did it.
|| THREAD ||
|| THREAD ||" title="In September 2018, we bought our first house.In July 2019, we paid it off.ONLY 282 DAYS with a mortgage!Here& #39;s exactly how we did it.https://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten">|| THREAD ||" class="img-responsive" style="max-width:100%;"/>
1. We Saved a LARGE Downpayment.
We knew we wanted to own our first house ASAP and be mortgage-free.
The first step: A large downpayment.
So we started saving and grew it from $40,000 to $205,000 in 3 years on ONLY 9-to-5s.
A solid start.
We knew we wanted to own our first house ASAP and be mortgage-free.
The first step: A large downpayment.
So we started saving and grew it from $40,000 to $205,000 in 3 years on ONLY 9-to-5s.
A solid start.
2. We Bought Below Our Means.
*WELL* below.
The bank approved us for a $700,000 house.
We bought a $270,000 house.
With a $205,000 downpayment.
That& #39;s 76% down.
Leaving ONLY a $65,000 mortgage.
"Now how the ^%$# did you manage that?!"
Well...
(con& #39;t)
*WELL* below.
The bank approved us for a $700,000 house.
We bought a $270,000 house.
With a $205,000 downpayment.
That& #39;s 76% down.
Leaving ONLY a $65,000 mortgage.
"Now how the ^%$# did you manage that?!"
Well...
(con& #39;t)
First, we decided to buy in a small town.
My wife works in the city.
I work(ed) in a small town 45 minutes away.
Real estate in the small town was ~30% cheaper for the same house.
And one of us would be commuting regardless.
Easy decision.
(con& #39;t)
My wife works in the city.
I work(ed) in a small town 45 minutes away.
Real estate in the small town was ~30% cheaper for the same house.
And one of us would be commuting regardless.
Easy decision.
(con& #39;t)
Second, we bought the house we NEEDED.
NOT the house we WANTED.
We could have gone bigger, but we didn& #39;t need to.
We found a great open concept 2+1 bed, 1.5 bath on a dead-end street, recently upgraded.
~900-1000 sq ft.
$270,000 instead of $400,000 in the city.
(con& #39;t)
NOT the house we WANTED.
We could have gone bigger, but we didn& #39;t need to.
We found a great open concept 2+1 bed, 1.5 bath on a dead-end street, recently upgraded.
~900-1000 sq ft.
$270,000 instead of $400,000 in the city.
(con& #39;t)
The rule in Canada is no more than 30% of your gross income should go to housing costs.
This means:
- Mortgage (principal and interest)
- Utilities
- Property Taxes
We came in at 8%.
This meant we& #39;d have AMPLE cashflow to fund a lump-sum payout while still living comfortably.
This means:
- Mortgage (principal and interest)
- Utilities
- Property Taxes
We came in at 8%.
This meant we& #39;d have AMPLE cashflow to fund a lump-sum payout while still living comfortably.
3. We Ran The Numbers.
Every house we saw, we ran #& #39;s on the mortgage size, interest payable, payback timeline, etc.
We saw 126.
So when we closed on this house, we had a gameplan for HOW to tackle a fast paydown on:
- A $65,000 mortgage
- 3.49% interest rate
- 15-year amort
Every house we saw, we ran #& #39;s on the mortgage size, interest payable, payback timeline, etc.
We saw 126.
So when we closed on this house, we had a gameplan for HOW to tackle a fast paydown on:
- A $65,000 mortgage
- 3.49% interest rate
- 15-year amort
4. We Took Advantage of Pre-Payment Options.
One of our mortgage pre-payment options was:
- Pre-pay 15% of the principal/year, interest-free.
Two weeks after buying the house, $9,750 went to the principal.
That lowered the interest for future payments.
https://abs.twimg.com/emoji/v2/... draggable="false" alt="✅" title="Fettes weißes Häkchen" aria-label="Emoji: Fettes weißes Häkchen">Pay less interest.
One of our mortgage pre-payment options was:
- Pre-pay 15% of the principal/year, interest-free.
Two weeks after buying the house, $9,750 went to the principal.
That lowered the interest for future payments.
5. We Saved.
Every 2 weeks we& #39;d check the remaining principal.
We turned our savings account into the House fund and pumped it every week with money from our 9-to-5s.https://abs.twimg.com/emoji/v2/... draggable="false" alt="💵" title="Banknote mit Dollar-Zeichen" aria-label="Emoji: Banknote mit Dollar-Zeichen">
Once we were ~2 weeks from having saved the remaining principal, we contacted the bank to arrange a payout.
Every 2 weeks we& #39;d check the remaining principal.
We turned our savings account into the House fund and pumped it every week with money from our 9-to-5s.
Once we were ~2 weeks from having saved the remaining principal, we contacted the bank to arrange a payout.
6. We Celebrated.
July 5, 2019.
282 days after we closed, the mortgage was toast.
We were COMPLETELY debt-free once more.
We had canned a $65,000 mortgage in ~9 months.
And incurred a paltry $2,269 in interest and prepayment penalties.
We celebrated lavishly! .. with pizza.
July 5, 2019.
282 days after we closed, the mortgage was toast.
We were COMPLETELY debt-free once more.
We had canned a $65,000 mortgage in ~9 months.
And incurred a paltry $2,269 in interest and prepayment penalties.
We celebrated lavishly! .. with pizza.
7. To Close...
We succeeded because we
- Had a goal of being mortgage-free
- Had a plan to save a downpayment
- Bought below our means
- Knew the numbers and prepayment options
- Had a plan for pay-off
https://abs.twimg.com/emoji/v2/... draggable="false" alt="☝️" title="Zeigefinger nach oben" aria-label="Emoji: Zeigefinger nach oben">This is the blueprint.
It will lead you to greatness.
@TheCalmNCents
We succeeded because we
- Had a goal of being mortgage-free
- Had a plan to save a downpayment
- Bought below our means
- Knew the numbers and prepayment options
- Had a plan for pay-off
It will lead you to greatness.
@TheCalmNCents
