On our Mortgage Freedom series today, we’re going to interview someone who eliminated their mortgage on a single middle-class income in less than 8 years.
Jessi Fearon is a wife, mother to three little ones and during their nap time, she’s a financial coach. Her inspiring story of complete debt freedom has been featured in The Huffington Post, Nerd Wallet and BuzzFeed. When Jessi’s not crushing her debt and motivating others to do the same, she’s singing Garth Brooks songs and spending time with her family.
What would it feel like to never make a mortgage payment ever again?
For our Mortgage Freedom series, we’re interviewing Colin Murphy who eliminated his mortgage in less than five years. Colin is a father, a husband, and a Chicago native. He’s going to let us peek inside and see how he made this monumental feat happen.
One fall night in 2010, my wife Nicole and I were watching the Suze Orman Show. (Yes, I used to DVR it). There was this fun segment where someone would call in and Suze would analyze that person’s financial health and give them a grade. It was called How Am I Doing?
One term that we kept seeing over and over again on this segment was “Net Worth”. Since we were personal finance newbies, we had no idea what this meant. Nicole and I were making a combined six-figure income together so we figured our net worth must be HUGE.
After the show was over, we decided to see how rich we really were. There was no doubt in our mind that we’d be better off than most of the jokers that call in to the show and get an “F” grade from Suze!
We walked upstairs and started to write down all of our numbers on a big white board. By separating our “assets” (what we owned) and our liabilities (what we owed) into two big columns, we started to discover that we weren’t rich.
Our first question of the month comes in from Nick from Tampa who responded to a blog post I wrote about paying off our mortgage (here’s the article):
I love this blog post. As a former Dave Ramsey groupie myself, I’m really excited for y’all! Would love to hear about your perspective one year later. I’m curious where you’re at with this? Have you followed through on your plans to allocate your savings like you say at the end of the post?
Have you invested in other opportunities?
How have the vacations gone?
Do you regret paying the mortgage off or do you still feel it was a smart decision?
When we paid off our mortgage early, it was one of the happiest days of my life. The major reduction in our overall annual expenses and my stress level was immediate. We celebrated with the whole family (check out our epic celebration here).
Little did I know though that one of the best days of my life would lead to one of the largest disagreements I’ve ever had with my wife of 8 years. We were really good at paying off the mortgage together, but we were not prepared for what we’d do with the money afterward.
We both had different ideas of what we should do with the money, but we didn’t communicate them to each other very effectively. (Well, I really didn’t).
To help remedy the situation, we decided to attend marriage counseling sessions after they were recommended by a good friend. It was one of the best decisions we’ve ever made as a couple.
Eliminating the largest debt in your life … Owning your home outright.
If you’re reading this and you’re thinking, “Well … you always have a mortgage. That’s just something you need to pay forever. No one pays off their mortgage.”
Well, I have a guest today that completely disagrees with that statement.
Talaat McNeely joins me today on the show to discuss how he and his wife, Tai, paid off their $330,000 mortgage in just 5 years. Not only did they complete this impressive feat incredibly fast, but they did it on a single income.
Our question of the month comes in from Luke from Indiana:
I was reading on your blog that you recently paid off your mortgage early. Congratulations!
I’m a Dave Ramsey guy like you and we’re getting close to baby step 6. I’m considering going heavy into paying off my mortgage like you did, but I’m also thinking it might be smarter for me to invest more for my retirement or just simply invest in the market. I also know market returns are unpredictable and we’re near all-time highs.
I have a 15-year mortgage at around 4% and the principal sits around $200,000. My wife and I are both working – we like what we do and combined we make around $200,000 per year. I feel like we could throw $50k per year at the mortgage and we’d be done in 4 years or less.
That could also be a good amount to throw at our retirement each year too.
What would you suggest for us? Should we pay off our mortgage or invest the money?
So you’re ready to pay off your mortgage?! Congratulations!
There are some important hoops you have to jump through to make this momentous occasion official. After all that hard work in paying your monster loan, let’s make sure you cross all your “T’s” and dot your “I’s”.
The beautiful fall day outside of my office windows made it tough to concentrate that day. Not only were the leaves on the trees changing, our family’s financial situation was about to change as well.
Eventually, I made my way out of the office for the day and into the crisp autumn air. I took a deep breath to appreciate the moment and said to myself, “THIS is going to be a life changing day for our family.”
Last week, Nicole and I made a really FUN phone call. We reached out to our mortgage company and said that we’re ready to pay off our 15-year loan. It was awesome!
I honestly can’t believe we’re here! After 4 years of extra payments and me repeatedly telling my patient wife the monthly balance … our day has come!
On the call with the mortgage company I was thinking, “They’re going to tell me that I can’t pay it off for some reason. There’s going to be some sort of legal fine print that I didn’t read correctly.” Nope, it was a very nice woman who walked us through the process.