Denali Northern Expenditure

The Mortgage is DEAD!

8 days ago we paid off the mortgage. The moment itself was completely anticlimactic. I had anticipated paying it off Friday afternoon after receiving my paycheck and when I had my family around me. I would get off the phone, pop the Martinelli’s and we’d party. Instead, on Thursday, I called the bank to verify the amount due, noticed I had enough in my Escrow account to cover the last of the mortgage, and asked about it. He said: “Oh yeah. We can use that. Do you want me take care of that right now?” And just like that, the mortgage was paid off. And I was alone in the house on the Thursday. I message Mr. T at work. I called my sister. I called my parents. And my family popped the Martinelli’s while I was at a meeting that night. Yawn.

As soon as he “took care of it” and paid my mortgage, the banker, in the very same breath, offered me a home equity loan. I’ve never flipped anyone off in my entire life. But at that moment, that felt like the very best reaction. Because I was on the phone, I did not actually flip him off. I politely declined like a good citizen, but it really ruined the moment.

I’ve had all the feels in the past week. I had to figure out how to move my taxes and insurance into my name. In the process, I discovered that for the past ten years, we haven’t had the residential exemption applied to our property tax bill which means we’ve been overpaying our property taxes by a third for 9 years! ANGER. I think I solved that for 2019 anyway. Hilariously, I’m so happy that the house is totally paid off that I can’t even be that mad about this. I’m trying. But the house is MINE. We are DEBT FREE!

It has felt so. dang. good. Also, I’m totally counting that we paid it off in December 2018 because I didn’t actually pay a dime toward it this month. WINNING! In the past 8 days, I have had so much fun figuring out where to send all of our money. An advance copy of Tanja’s new book, Work Optional, came this week as well (perfect timing). I’m still neck deep in new spreadsheets, calculations, and possibilities. It. is. glorious.

Does is Make Sense to Pay off the Mortgage Early?

There are fairly sound economic arguments that say no. However, I work in behavioral economics which takes into account that people are irrational beings. We aren’t good with following strict economic principles because FEELS. Ultimately, the answer of whether or not to pay it off early is entirely based on your own emotions. If your mortgage doesn’t bother you at all and you’ve locked in a good interest rate, don’t even worry about.

Here are the 3 things that have changed the most for me with the mortgage payoff:

  1. My Savings: It’s been 8 whole days and already my savings rate is up (I immediately changed my 401k contributions to 50% of my pay). I learned a couple of years ago that I am a terrible financial multi-tasker. If I wanted to accomplish more than the average, I had to go all in. So I decided to kill the mortgage. Now that we’ve done that, it’s time to go all in on savings!
  2. My Peace of Mind: At least a couple times every single day since paying off the mortgage, I take a deep breath and think: it’s mine. No more payments to any bank. My money is MINE.
  3. My Risk Tolerance: With that peace of mind comes possibilities. As I mentioned in my 2018 recap post, I hired a couple of designers last year. When one of them offered to design for me nearly full time for $200/month, I immediately jumped on it. If I still had a mortgage to pay off, I’m not sure I would have risked it. Who knows if we’re able to turn that $200/month into way more profit, but if it doesn’t work out, a whole year of hiring her was the equivalent risk of less than one mortgage payment! In those terms, it was totally worth the risk! Especially since growing our business is something we’re actively trying to do in 2019.

What Happens Now?

Full disclaimer: we may have another mortgage sometime in the future. This house is fabulous and we absolutely love it, but it really isn’t conducive to teenagers. There’s no place for teens to hang out without us more than 5 feet away. And even if we’re there, we can only fit like 2 other teens comfortably. Our housing future is entirely uncertain. It could go either way: stay here forever or buy a different house (I vacillate daily).

What we do know: we are going to enjoy no mortgage payments for awhile and take advantage of that time to increase our savings significantly. I don’t regret paying it off early at all. It still feels so good!

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2018: Year in Review

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13 Comments

  1. Congratulations!! That’s awesome! And as far as the “makes sense on paper” arguments for paying it off or not paying it off. This is what makes personal finance personal. Your decision and what sits well with you won’t be the same for me or anyone else, because it’s you.
    In the end, if it helps you sleep better at night or feel better about your finances then why not?

    Congrats again! Big accomplishment!

  2. steveark

    I’m no lawyer but I believe in most states you can get property tax refunds for the previous three years if you overpaid. It might be worth checking? When we paid off our mortgage it was kind of anticlimactic too. It’s like there is no piece of paper to burn and no concrete final action. But it sure feels good from then on. I clearly recall my dad’s elation when he paid off our home early when I was just a youngster. It is a family tradition that I hope my kids maintain

    • MaggieBanks

      Unfortuntely, I checked and I’m out of luck for overpaid refunds. Alas. Oh well. At least it will be cheaper this year!

  3. Abigail @ipickuppennies.net

    Congratulations! I anticipate that paying my mortgage off will be a tad anticlimactic. But it’s what comes afterward that makes it worthwhile. The sense of peace, like you described. Anyway, my payoff isn’t for at least another 7-10 years, but it’s on the radar.

  4. Maria

    Woo hoo! that’s so amazing. It must be such a great feeling.
    And yeah, here’s hoping you can get a rebate on your overpaid taxes

    • MaggieBanks

      Unfortunately, no luck on the back payments. Onward and upward, right?!;)

  5. Woohoo amazing stuff guys!

  6. Congrats! Being completely debt free must feel amazing. Enjoy it!

  7. I think we should celebrate this all month long. ALL MONTH. I’m still SO excited for you and it makes me more excited to work on our mortgage and other goals.

    Even if we don’t end up paying off our mortgage in the next ten years, which would be so nice but we don’t know if that’s what we really need in those ten years generally, I’m still motivated to keep chipping away at those long term goals.

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