Paying Off a House Sure Takes Time…

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Are you focusing on being completely debt free like me? If you’ve taken care of your credit card, student loan, and car loan debts, then you are probably trying to take a bit out of the biggie: the home loan. Fortunately, I didn’t take out a large loan for this house since it was a fixer-upper, but $70,000 is still a lot debt to try to get rid of.

I was incredibly motivated at first, putting $2k toward the loan each month, but then the divorce happened… That was almost a year ago now. Suddenly, instead of putting my money toward the house loan, it was going to my ex. Now I’m trying to get focused again, but it sure isn’t easy, but I’m sure you already know that.

Most of you know that I have a goal to pay off my house loan by the end of 2014. This means that I’ll have to reduce my mortgage to $40,000 in the next 3 months to even have a chance at paying it off next year. And, in order to get my loan balance down to $40k, I’ll have to do something miraculous. Here is how my house payoff has gone so far (tracking back to its purchase in 2011).

20130929 - mortgage graph

My Old Plan For Paying Down the Mortgage

Because of my not-so-awesome circumstances, my payoff has really planed out. But, it’s time to make that all change! If I just continued to make my normal payment of about $700 a month, my mortgage balance would be at about $54,500 by the end of this year. If you recall from a couple of months ago, I had a plan to pay this amount down substantially. It consisted of:

  1. Saving my regular income aggressively
  2. Flipping two cars for a profit
  3. Starting 10 new websites and selling them (for at least $5k total)

While this was a pretty solid plan, I just haven’t gotten around to creating those sites, and quite honestly, I’m not so sure if Google will ever be doing a PR update again, which would make it very difficult to sell. As for the cars, I have been looking around for some to flip, but ideally I would drive this car while I was selling it, which means that I would most likely be getting much worse gas mileage than my 37 mpg that I’m getting right now. So, is it really worth it to do this? Only if I find a super amazing deal, and I’m not so sure this is going to happen in the next month. So that leaves me with paying down my mortgage with my regular income and my website profits.

My New Plan For Paying Down the Mortgage

To be completely honest, my new plan is not air tight. I’m not so sure if I can get my mortgage down to $40k by the end of December, but if I’m close, that will still be an accomplishment, right? Here’s the breakdown of the new plan.

  1. Save my regular income aggressively
  2. Increase my current website income

Haha. Pretty elaborate plan huh? 😉 Well, so far it has enabled me to save about $5,000 already that I could put toward the house, and with some conservative estimates, I could save another $6,000 in the next three months. That would get me down to about $43,000. If I do find an amazing car flip, then that would get me amazingly close to the $40k goal.

How Will I Increase My Web Income?

Now that is a good question. Currently, my site load time is pretty poor, and I feel like Google is penalizing me for it. I have worked very hard in the past couple days to speed it up, and within the next week I plan to get on a dedicated server with my iPage web host. This should not only attract repeat visits from my readers, but it will put me higher in the ranks of the Google Search.

Weekly Round-Up

As usual, thanks for visiting and spending time here on my site! If you’re looking to learn more about personal finance, perhaps you’d like to read these posts from my PF friends!

How to Build Passive Income For Financial Independence at Financial Samurai

Does $1 Million Dollars Make You Rich at Eyes on the Dollar

Do You Plan or Plan to Fail at Krant Cents

Fall Finance Tip: Improve Yourself at Making Sense of Cents

Why You Should Track Cash Flow at Free Money Finance

Negotiating for Non-Negotiators at Average Joe’s Money Blog

The Great Lengths Scammers Will Go to Screw You at Stumble Forward

6 Flea Market Shopping Tips That Will Save You Big at Frugal Rules

When I Grow Up I Wanna Be Average at Cash Cow Couple

Housing Money Mortgage Payoff

AUTHOR Derek

My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

26 Comments

  1. I’m also hoping to increase my site’s income. Great plan Derek!

    • Well let me know if you need any help Mark. I have made plenty of mistakes through the years and have quite a bit of knowledge! Best of luck to you and your site!

  2. Derek, thanks for the update on your mortgage payment goal. We refinanced to a 15 year loan 11 months ago and have a goal to pay off the mortgage years before the end of the original loan and have already paid an additional $1400 toward the principal. Where is the “ticker” that you previously had showing what % of your mortgage was paid? I think you were at about 20% when I saw it last. That encouraged me to keep a running % of how much we have paid on ours. Best of luck to you on achieving your goal.

    • Ha, you are right! I did have a mortgage payoff percentage. Unfortunately, the widget started interfering with some other tools on my site, so I had to remove it. I’ll have to find another one so I can get it back up there. Right now, I’m at 22%. 🙂

  3. I like your determination even when life and Google get in your way. We were all set to have our house paid off in 4-6 years (owe about $155K), but now we might go ahead with a rental purchase if we find a good one at the right price. I guess we are hoarding money right now until we decide, and it sucks that it isn’t earning much interest, but it’s a good problem to have. Thanks for the mention.

    • That would be amazing if you could pay off your mortgage so quickly! Do you currently have it on a 10 year note? That might motivate you to pay off more over the long-term as well.

  4. Thanks for the links, I am in good company. Although I admire your efforts to pay off your mortgage, I would consider other investments that are yielding more.

    • Yes, I understand your mentality krantcents, but just keep in mind that I am investing in other areas as well as paying off my house. I just know that when I pay extra on my house loan, it’s a sure thing that I’m saving some cash. I like that.

  5. Even though it seems like a disappointment, taking an extra year to pay off your house isn’t all that bad. I’m sure that your day job income will continue to rise over the next few years and hopefully website income will stay steady, if not increase. If it’s any consolation, I’m working on saving the 20% down payment in order to buy a house. My guess is you will own your house outright before I even buy one (now that would be an interesting challenge…) 🙂

    • Very true Corey. I will continue to press forward on paying off this mortgage, even if it is a little slower than normal. Ha! I like your challenge idea. We might just have to do that to keep us both motivated. 🙂

  6. Paying off the mortgage can take years upon years although it doesn’t have to. I can see why you stopped when you were getting a divorce but I think you should have no problem getting it down to 40k by the end of the year if that is the goal you set out. Like others mentioned adding an extra year based on circumstances is not a big deal at all. Keep focused and you will get there.
    Cheers mate.

    • Thanks for the kind words CBB! I will definitely do my best to get my mortgage down to 40k by the end of this year.

  7. Ah, to only owe $50K on my mortgage. Definitely looking forward to that day, just another few hundred thousand to go…

    The nice thing about a mortgage is the interest deduction. Between paying down the principal, and getting the massive deduction every year, it’s almost worth it. But I’m certainly looking forward to paying it off.

    Good plan, and way to stay focused in difficult times.

    • Haha. Yeah, it is nice to owe so little, but it still seems like it takes forever to pay off! I just don’t want to be one of these people that finally gets their house paid off when they’re 60 years old. To have a mortgage for that long…? No thank you.

  8. I like your new plan Derek, I’ve come to the same conclusion myself that it’s easier to just work on one site than try and build several sites all at once. It also keeps your sanity as well.

    • Yep. If all else fails, I still might be tempted to build one or two, but I still do have the option to write some more articles for people at $20 a pop.

  9. These are great links you shared. Some of them I already read but some not yet so I’m clicking on those to read in a while. Thanks for updating us on the progress of your mortgage payment. The new plan seems to be working great!

    • Glad you liked the links Marissa! They were definitely great reads.

    • You’re welcome Vanessa, and thanks!

  10. Many years ago, a friend of mine went through a divorce. He said it was the most difficult thing he ever went through. I think it was also the most expensive. I have three brothers and they all have been through a divorce. Sorry to hear you have as well. It’s easy to see how that affected your finances in the mortgage balance bar graph. It sounds like you are back on track, though, and have a good plan now. Good luck.

    • I sure hope so, and I also hope I never have to go through anything like that ever again. The finances were only 5% of the difficulty in my opinion…but that might be a story for another blog. Thanks for the encouragement Bryce!

  11. You know what, if you cannot make it until the set deadline, it’s still OK. It would be great to finish your payments in the time you planned to do it, but I don’t think it’s such a huge tragedy if it will take you few more months. You are VERY determined to succeed and this is what matters. You are close to the finish line and, from what I see, you’ll will be able to get rid of this debt pretty soon. Keeping our fingers crossed for you and hoping the plan will work out 🙂

    • Thanks dojo! Yes, if I don’t pay the mortgage off right on time, it’s not a huge tragedy. But, the beautiful thing about it (as you mentioned) is that I’ll be extremely close and will pay it off only a few months late. If I had no plan at all, I wouldn’t have this thing paid off until 2026, and that would suck big time…

  12. Hi Derek! Your article caught my eye because I’m also trying to payoff my mortgage early. You’re right that paying off a house takes time! Since it’s a long term goal, I think it’s great that you decided to re-evaluate how you’ll get more money to pay off the mortgage.

    You made a comment that I found very interesting. Why do you think that Google isn’t updating the PR?

    Best of luck to you!

    • About the Google PR. They have been trying to downplay the PR for a couple of years now and have slowly gotten away from updating it. They recently had an algorithm change, but PRs did not update. To me, this says they may not ever update them again.


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