Back in July, after living in a rented apartment for a little longer than a year, the wife and I decided to take the plunge and buy a house. You can read all the deets over here.
I know. I know. Buying real estate is unpopular with the millennials right now. But screw it. We found an affordable place in a town we’re looking to call home for a very long time.
Because Vanessa hates debt more than feminists hate mansplaining (that’s when men have the audacity to express their opinions on something), we have decided to pay off said loan in just 30 months. That would put us mortgage free by January 1st, 2019. And then the robots will revolt and kill us all. Nice. Real nice.
Let me remind you all of what we’ve accomplished so far:
- Purchase price: $195,000
- Down payment: $5,000
- Total owing on July 15th: $190,000
- Total owing on September 15th: $151,324.51
Let me remind y’all of a few details of our loan. It’s an open loan at Prime (2.7%) from a family member. I realize I could have done a little better if I would have gone to a bank, but I wanted the ability to make big prepayments. And besides, I didn’t want to have to go through the whole qualification process. So I’m pretty happy with the trade-off.
We made great progress in the first few months because we threw pretty much all of our available cash at our loan. We each drained our emergency funds (I use that term very loosely, much preferring to call any money in my accounts cash on hand), leaving just a small amount left over. I didn’t sweat this because a) we have credit cards with $15,000 worth of available space and b) I also have a little cash in my brokerage accounts.
I cautioned that paying off $40,000 in two months would not the the norm going forward.
How about today?
At this very minute our mortgage is currently down to…
$129,457.09. A decrease of $21,867.42.
That means we’ve paid back $60,542.91 in the first five months of having this loan. Our loan to value ratio decreased from 97.4% to 66.4%. We’re 33.6% towards paying off the loan, putting us well on pace to get it paid off by the beginning of 2019.
I have to give Vanessa credit for much of the progress this quarter. She pulled in more cash than expected from her job, and an unexpected scholarship helped out on the ol’ tuition front (Vanessa is studying to be a teacher). Those two factors alone accounted for close to $10,000 worth of mortgage payoff.
I contributed a bunch of cash I made working and also some cash flow from the private mortgage division of Nelson Enterprises. I also did a small top-up loan for an existing mortgage, or else my contribution would have been a little better.
Let’s throw up a couple of charts, since you kids asked for them last time.
As you can see we’re well on pace to get this bad boy paid off in 2.5 years. Look for my book titled Just Kidding, Like Hell I Would Write That.
Next quarter could even be better than this one. I should have a decent sized tax refund coming, work is going well for both of us, and investments are dripping cash flows in our accounts on a regular basis. We even feel flush enough to go on a trip to Las Vegas right before Christmas.
I just want to reiterate that what we’re doing isn’t rocket science. We both have decent-paying jobs. I’ve got plenty of cash flow from investments I’ve made for the past 15 years. And we both pick up extra work whenever possible.
We’re also pretty frugal, but not obsessively so. We go out to eat more than once a week. We drive a new car, although it is shared. I spend hundreds of dollars per month renting out space for an office. And our cat eats the fancy food because apparently we love it. If needed, we could cut at least five hundred bucks a month from our fixed expenses. Maybe even more.
It’s all about the top line. We’ve done a nice job with that. It’s the whole reason why we’re able to make such great progress on our mortgage. Frugality can only go so far.