Monday, August 19, 2013

Mortgage Payoff Plan - Take Two

The computer system went down at work today so that means you get more musings from me!  Yay!  Isn't that great?

My rental house mortgage was paid off in 3 years and 6 months from the time that I started accelerated payments. My first big payment was $20k when the balance was at $100K which brought it down to $75K. I continued to pay $1,200 approximately every month although I was renting that house out and my rental income was very unsteady. Some months I put no extra money towards the mortgage, like after I got rid of the druggies and had to renovate the house. Sometimes I paid more like when I sold my stock and when my renter got caught up on the rent. The mortgage payment (principle and interest) was $800 and the interest rate was 5.9%.  

Now, I owe $71,120 on my house. I don't have $20K to jump start my payoff plan but, hopefully, I can make steady over-payments of $1,200 a month. The monthly payment is $540 and the interest rate is 4.5%. 

There are many ways to increase my monthly contribution.

1. Selling stuff!!!! Yes, I say this all the time. I still have plenty of stuff to sell.

2. Selling $500 of old company stock. I didn't sell this stock when I sold my other stock because when I called to inquire about selling it, the woman told me that I didn't own any stock. Since then, I have received many letters indicating that I do still own some shares and I have even started receiving a tiny dividend check. Now I just need to talk to the right person to find out how to sell it.

3. Dog sitting. I made $100 last month for dog sitting for 2 weeks. I have plenty of room. I just need to get the word out that I am available.

4. Work on my web store. I've been neglecting it lately with everything going on. I plan to get back to working on my store soon and then I will work on promoting it.

5. Renting out my house. This is not something that I can do until I have a safe yard for my dogs at my mobile home property. But once I do have a safe place for my dogs and a reliable water supply, I would be willing to move out. I have been asked a few times if I know of a place to rent for 6 months for families with kids who are moving here and need a place to stay while they look around and find out where they would like to live. It would also be a good house for people with pets since pet friendly hotels are expensive and hard to find.

If I do those things then I am sure that I can payoff my mortgage in less than 4 years because 4 years is just too long!


Laura / Move to Portugal said...

Good luck Daizy! I'm sure you can do it in less than 4 years!

The Executioner said...

The timing of your original mortgage payoff coincided almost exactly with ours -- we started in Jan 2008 and finished in April 2011. It was fun following along with you back then. Good luck as you attack the second mortgage. It will be great when you own three properties free and clear.

Dave said...

Some of your options are one-shots (#1 and #2) while others are renewable (#3, #4, #5). Unless you can generate a lot of money from the one-shots, I'd concentrate on the renewables.

Don't be blinded by a 4-year "maximum" on your mortgage. If it takes 5 years that is fine, too. I took 9 years to pay off my only mortgage although I was 35 when I became debt-free on the way to my financial independence at 45, 5 years ago.

Daizy said...

Thanks, Laura! Last time was quite the roller coaster. Hopefully, this time has more ups than downs.

Daizy said...

Executioner, it looks like we are both on track to kill our full time jobs. I hope you can do it in 5 rather than 10. Or, since you started last year, it could only be 4 years from now. Maybe we should race.

Daizy said...

Dave, you were 45 when you became financially independent so I only have 4 years to match your success! My last mortgage payoff certainly had more drama than I would have liked. I hope I don't have as much but then, life is unpredictable. Plus, I have my parents and nephew in the picture. All sorts of things could happen. I'll try to stay focused.