Baby Step 6: Pay Off Home Early

While Donna and I are currently in Baby Step 2: Pay Off All Debt (Except House) With The Debt Snowball I really, really, really want to be at this step. You see Donna and I live in a wonderful house. We love 99.999% of the things about it. We bought the house brand new, we're in a nice growing neighborhood, we have nice neighbors, for the first time in our time together we actually park a car in the garage every single day. So what's not to love right?! Well we realize now we actually bought too much house or perhaps more accurately we made several stupid mistakes when buying this house. For example when we bought the list price for our house was $179,000 (never mind two weeks after we closed the company dropped the base price to $169,000 ouch!) Our final price for the house as $227,000. That's right we spent $48,000 in upgrades for the house. That's what happens when you get all wrapped up in the whole "We're buying a brand new house!" deal.

Originally our loan was at 6.5% and in the fall of last 2011 we refinanced it down to 4.5% 30 year fixed. I know now that Dave Ramsey would recommend only a 15 year fixed rate but we refinanced because it would lower our payment. By going with with a 15 year mortgage it would have increased our payment and we couldn't afford to do that. So here were sit in our dream home. We pay $1300 per month for our mortgage which includes a whopping $10.15 each month in extra prinicpal. It also includes escrow and all of the other stuff that you have to pay. Assuming we continue to pay as we are now our expected pay off date is sometime around September 2041. The biggest problem I have with that date is I'll turn 65 in 2026 and I'd really like to return then and don't want to have a mortgage when I retire. For kicks I put together the table below to show just how quickly we could pay off our mortgage if we added various extra payments to it. What I think we'll probably end up doing is paying an extra $700 per month to get it paid off in 2025.

So how about you? Do you make extra payments on your mortgage?

Payment	Pay Off Date	Term In Months	Reduction In Months	Additional Amount	Cost
$1,300.00	Sep 2041	360	0	0	0
$1,400.00	Feb 2037	305	55	$100.00	$30,500.00
$1,500.00	Nov 2033	256	104	$200.00	$51,200.00
$1,600.00	May 2031	232	128	$300.00	$69,600.00
$1,700.00	Jun 2029	213	147	$400.00	$85,200.00
$1,800.00	Nov 2027	194	166	$500.00	$97,000.00
$1,900.00	Jul 2026	178	182	$600.00	$106,800.00
$2,000.00	Jun 2025	165	195	$700.00	$115,500.00
$2,100.00	Jun 2024	153	207	$800.00	$122,400.00
$2,200.00	Aug 2023	143	217	$900.00	$128,700.00
$2,300.00	Dec 2022	135	225	$1,000.00	$135,000.00
$2,400.00	Apr 2022	127	233	$1,100.00	$139,700.00
$2,500.00	Sep 2021	120	240	$1,200.00	$144,000.00
$2,600.00	Mar 2021	114	246	$1,300.00	$148,200.00
$2,700.00	Oct 2020	109	251	$1,400.00	$152,600.00
$2,800.00	May 2020	104	256	$1,500.00	$156,000.00
$2,900.00	Dec 2019	99	261	$1,600.00	$158,400.00
$3,000.00	Aug 2019	95	265	$1,700.00	$161,500.00