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Annoying Letter Means WE PAID OFF OUR FIRST MORTGAGE!!!

On April 2, 2013 I wired $22,200 to Chase to pay off the mortgage on our first home – what is now our rent house.  I held off on writing the happy post about it since I wanted to receive something official that would confirm we indeed own our first home 100%.  Well, here is a letter we received yesterday:

We are writing to tell you about a change in your status in the Mortgage Cash Back Program.

We want to let you know that you are no longer enrolled in the program because your mortgage has been paid off prior to maturity.  You may be able to enroll in the program in the future if you decide to refinance your mortgage with Chase.

Note:  Any rewards that you may have earned before cancellation of the program have been forfeited.

If you have any questions, please call us at one of the telephone numbers listed below.

So I forfeited $48 in cash back to save $60 in interest for the rest of April.  I’m okay with that.  :-D

WE PAID OFF A MORTGAGE!!!

So even though we don’t have a deed in hand yet, I am super happy to say that we have officially PAID OFF the mortgage on our first home purchase ever!!!  We officially own a 1750 square foot, 3 bedroom, 2 1/2 bath home outright!!!  Woot!!!  And the $505 mortgage payment that was usually drafted from our account the 9th of every month didn’t happen!  Yay to an extra $500 a month!!!

Okay, I’ll lay off the exclamation points.  I’m just super happy.  :-)

Our Rent House is now 100% Ours!!!

We own this baby outright!!! Yay!!!

 

The Process

Just so you know, I was a little worried about the process of paying off the mortgage since I hadn’t done it before.  It ended up being pretty easy:

  1. I called the number I found online to use an automated system to receive a mailed payoff quote.
  2. I moved the $22,200 over from CapitalOne 360 to Chase (our brick and mortar bank and the one who had this mortgage).
  3. Once I received the quote a week later, I wired the payoff amount along with all of the info they asked me to include in the “Memo” section of the wire.
  4. I then saw that they charged me a $25 wiring fee (I was too excited to pay attention to that little note before).
  5. I emailed them asking them to waive the fee since I was a long-time customer and the money went from them to them.
  6. They waived the fee.

And there you have it – 3 steps to pay off a mortgage and 6 to do it and get a fee waived, lol.  ;-)

What This Means Now

Now we own one home outright that we use for rental income.  We still have a $205,000 mortgage left on our current home, so we are definitely not completely debt free yet, but that is the last debt left.  And we really love our current home and being landlords, so we are not regretting our decision to move last year at all.  Overall, we’re exuberant.

Based on our last budget update, we needed about $8000 a month for just bills plus taxes.  Now that is at $7500.  Still way too high in my opinion, but $500 a month is $6000 a year.  I’ll take it.  :-)

Retirement

This also means that real estate has truly become a part of our current income and our future retirement plans.  Even taking into account annual property taxes, annual home insurance, and all repairs/maintenance items, we should be netting about $10,000 a year from our rent house.  We haven’t had any super expensive repairs yet, but I am budgeting high for those since all appliances will break eventually and probably all at once since that is how it always happens, right?

The rest of our retirement plans are sort of up in the air.  We max out Roth IRA’s every year and that’s about it right now.  So now that the mortgage is paid off, we need to look into all of our options and make a plan.  We know we want to invest in the stock market and are leaning towards opening a SEP IRA since I can’t contribute to my old 401k anymore.  We could even look into more rental property.

When we hit our golden years, we’ll need to look at how we will take distributions.  Really though, the more immediate decisions need to be figured out first.  We will probably start small with SEP IRA contributions and more stock market investments.  It’ll take a year or two before we will probably look any further into real estate…we’ll see…

Mortgage Payoff Race

Finally, I am happy to say, we also won the mortgage payoff race!  Jason from Live Real, Now and I made a bet at the Financial Blogger Conference last year about who would pay off their mortgage first.  Sorry Jason, but you will be expected to visit “hell” (as you put it) sometime soon.  I’ll provide the sunscreen.  :-)  And don’t worry, we have air conditioning.  This may have worked out for the best since I forgot you owned a cat and I would have had asthma attacks the whole time I was in the frozen tundra that you call home, LOL.

Are you debt free or working on it?  Own a home outright?  On track to?  What do you think?

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