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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's exactly how we did it.
|| THREAD ||
In July 2019, we paid it off.
ONLY 282 DAYS with a mortgage!
Here's exactly how we did it.
|| THREAD ||
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's 76% down.
Leaving ONLY a $65,000 mortgage.
"Now how the ^%$# did you manage that?!"
Well...
(con't)
*WELL* below.
The bank approved us for a $700,000 house.
We bought a $270,000 house.
With a $205,000 downpayment.
That's 76% down.
Leaving ONLY a $65,000 mortgage.
"Now how the ^%$# did you manage that?!"
Well...
(con'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'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't)
Second, we bought the house we NEEDED.
NOT the house we WANTED.
We could have gone bigger, but we didn'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't)
NOT the house we WANTED.
We could have gone bigger, but we didn'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'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'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'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 #'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 #'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.
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.
Pay less interest.
5. We Saved.
Every 2 weeks we'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.
Every 2 weeks we'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
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
This is the blueprint.It will lead you to greatness.
@TheCalmNCents
