There’s only one step left before you can start building some serious wealth…Paying off your house. Can you imagine sitting on your back porch drinking a beer on a nice spring day knowing that you are the ACTUAL owner of your house? Not the bank, YOU! What would it be like to not have a mortgage payment anymore? How much money could you save if all of that money wasn’t going to the bank anymore? YOU WILL NEVER BE WITHOUT A HOME! It doesn’t matter if you lose your job or have a medical emergency, the stress of having to come up with the monthly payment is gone! What a great feeling…
So What Do I Do?
Now that you’ve built your foundation and are investing 15% of your income into your retirement account, you can throw the rest of the available money at your mortgage principal. Make sure it goes to the principal! When you start doing this your balance will start falling faster than you expect.
Another method you may want to consider is refinancing if you have a 30 year mortgage. Refinancing to a 15 year mortgage will guarantee that your mortgage will be paid of in 15 years and it’ll save you 10’s of thousands of dollars in interest. It’s worth looking into, especially if you’ll save over 1% on your interest rate.
Downsizing is also an option to not having a house payment anymore. If your mortgage is eating up a significant portion of your monthly budget you may want to downsize! I recommend not having a mortgage payment that makes up more than 25% of your budget. Anything over this amount will leave you in danger of being house poor and without the ability to have any fun or build wealth.
How Long Will It Take?
This is completely up to you and how much debt you are in with your house. If you have a $340,000 home, it may take the full 15 years that you’ve refinanced your mortgage to or you may have a $100,000 home that you pay off in 5 years. There is no guaranteed timeframe for this step, it’s completely up to you. But remember, paying off your home is a long road…stay intense and find ways to have fun along the way!
*Leave a comment to let us know how you plan on paying off your house! Do you have ideas other than what is listed here?
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