Our Mortgage History In Brief

The American dream.....homeownership. I remember the joy and the anxiety mixed together on the day we signed the papers for our first house. I was thrilled to be able to have a permanent place that was considered ours, and yet, I realized that there was a great deal of responsibility heading our way. Now looking back, I also realize that I was really ignorant about the financial aspect of owning a home.
We went the typical route when we applied for our 1st mortgage, a conventional, 30 year loan. We didn't have enough cash saved to foot the 20% down bill, so we took out PMI insurance. After living in our house for 2 1/2 years, we were able to drop the PMI coverage. It wasn't until then, that I even realized the difference it made to not have to pay that extra money every month.
So, when we went to take out a loan for our next home (we had outgrown our starter house after our second child was born), PMI insurance was just not an option. My husband figured out a way to avoid paying it by taking out a second loan to cover the amount we were short for our 20% down payment. We still had to pay the extra money every month, but we didn't have to go through the hassle of dealing with getting rid of the PMI insurance.
This may sound crazy, but that second loan ended up being a godsend for us. We ended up only paying on this loan for 9 months due to a small inheritance that we came into. However, the best part about it was that it forced us to live on less for that short period of time. Chad calculated the difference it would be for us to switch to a 15 year loan and it happened to be the same amount we had been paying for the 1st and 2nd mortgage each month. We figured if we did it for 9 months, then we could do it for 15 years or hopefully even less.
By the way, not everyone thought that switching to a 15 year mortgage was such a good idea. Some people questioned the rationality of paying off a mortgage in half the time when it could be used as a tax right off for so many years. Others thought it was a bad idea because if something happened to my husband's job, than it would be more difficult to pay the higher monthly mortgage than if we stuck with the less costly 30 year.
Believe me, it would have been so much easier to have an extra $400 in our pockets every month if we would've stayed with the 30 year loan. However, we looked at the big picture on this one. Down the road we saw a paid for house and a much larger amount of cash we would have every month for the rest of our lives, if we could only get through a few tight years.
This was our "a-ha" moment. We finally figured out that if we could have no debt what so ever, than we could live a life free of financial worries. We decided together that we were going to make it our priority to pay off our mortgage as soon as possible.
Our goal was and still is to pay off our mortgage before our 40th birthday. We made that goal when we were 31 years old and now we have only 41/2 years left in our timeline to pay it off. We think we can, we think we can.