At the time of the bet, Mr. BFS and I had about $24,500 left on the mortgage on our rental house. Jason had a similar amount left on his home loan. The rules on my end were that I needed to pay for our closing costs for the new house, save up $20,000 of padding again, and then pay off the first mortgage without touching any of that padding. Jason is going to pay off a vehicle loan and then attack his. Whoever loses will visit the other person’s place…me in “hell” or him in “the frozen arctic”. 🙂
Mortgage Payoff Race Update
Well, we saved up the $20,000 in padding by the end of last October. Yay! But things sort of slowed down from there. With two house payments and two sets of property taxes, our cost of living has nearly doubled. You can see our budget here – with taxes, we need to bring in $8000 a month. We bring in way more rental income too ($2300 per month), but generally, our self employment income has settled at just above what we need to pay for taxes, basic bills, very basic savings, and our little lifestyle luxuries like lawn care. Basically, we only save the rental income for the mortgage payoff.
From October 2012 to now, we have set aside $15,000 in a savings account for the mortgage payoff. We have $22,000 left to pay. If things continue as they are now, we should be able to make our last payment ever sometime between August and October of this year. But here is the deal…
Life’s priorities don’t just stay the same forever, right? Well, ours don’t at least. Last year, taking on a huge, new mortgage made us want to pay off the remaining part of our old one SO badly. Now we have tasted rental income and wonder if we rather refinance our huge mortgage and start saving for another rental property. Or invest more in the stock market. Or just keep cash on hand for a new-to-us vehicle since mine has been slowly dying for the last 8 years since the Chevy Aveo sucks and hubby’s Toyota Prius has hit 110,000 miles and we don’t know what to expect. Overall, we wonder if we should use the $20,000+ in cash that we will have saved up within the next few months to pay off a 4.5% mortgage.
I do hate debt. I would love to be completely mortgage-free within the next 10 years or less. But I also would love to have some more rental property since it makes so much sense in our area. $125,000-$150,000 homes that rent for $500 per month or more than what their mortgages and property taxes cost is just hard to pass up. We might try to do both since I am a fan of having your cake and eating it too (what’s the point otherwise, right?) BUT I wanted to throw it out there that we may go a different way. Nothing is decided yet, we are still saving, and we are on track…just don’t know if we will stay on this specific track all the way through…
Do your goals change like this too? How often do you think your priorities seem to switch? What do you think about our situation?
FYI: I worked at a dead end cubicle job from 2005-2011 for about $30,000 per year. I went self-employed in July 2011 and make between $80,000-$100,000 through blogging, professional pet sitting, hubby's reffing, and our rental home. If you’d like to start your own site (link to my free step-by-step guide), I highly suggest checking out Bluehost (my referral link with a nice discount for you, PLUS a free custom header banner from me!). I even have all of my favorite tools on a resource page - I hope they help you too. Please contact me any time at budgetingfunstuff*at*gmail*dot*com with questions or just to brainstorm! I’d love to help!