So as we saw yesterday I’m a bit short on my plan to have my
mortgage gone in 5 years. In fact
I’m short to the tune of about $38,946.90. How to deal with this short
fall? There are a number of
different options let take a look.
A) Revise my goals and continue to pay $1,545.62 a month
towards my mortgage. That will
have me paid off in roughly two more years (depending on what my new interest
rate is.)
B) Use a portion of my retirement savings to pay off the
balance when it comes to renew my mortgage. This is a real option, especially if interest rates are
high. I would consider this an
interest free loan from myself and pay it back to my retirement savings as
quickly as possible.
C) Start looking for ways to make up the difference. All of my numbers yesterday assumed that
I won’t see a pay-raise in the next 5 years; I am kind of hoping that that is
not the case. If I see a 4%
increase each year (for cost of living) I’ll see $140 a month more from Nov
2013 – Nov 2014, then $150, then $155, then $160. If half of my pay-raises goes towards housing that would be
an extra $3,630 over a four year period.
Add to that I haven’t accounted for the Found Money that I hope to put against my mortgage.
From Nov to Jan this year I saw over $500 in found money, if I put $150
of found money a month against mortgage that is $8,550 by Nov 8th
2017.
That brings us down to a deficit of $26,766.90 (a bit less
actually because I will be paying less interest and more of my payments will go
towards principal, but those calculations get absurdly complicated.) One way to bring this down would be to
fund my masters with scholarship money, thus freeing up to $20,000 of the money
that I have earmarked for my continued education. Otherwise I will need to look for a way to bring in an
additional $560 a month over four years.
There are a lot of ways this could happen and I have started to explore
avenues (I swear my book is the next Harry Potter, now I just need a publisher
to realize that.)
All said paying off my mortgage in 5 years is not going to be easy. I was never under the impression that it would be. I'm still planning on making it a priority (most people who know me will vouch for my stubbornness, I have on occasion decided to will things into happening.) Fully paying off my mortgage will give me an incredible amount of freedom to pursue other goals and dreams while not having to worry about keeping a roof over my head.
I hope you follow along for the next 5 years!
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