Can Mortgage Be Paid Off In Five To Seven Years?

Discussion in Mortgage & House Payments started by EditorsRHumansToo! • Jun 4, 2015.

  1. EditorsRHumansToo!

    EditorsRHumansToo!Member

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    Financial independence and security is a pursuit of all hard-working people. Our ultimate goal to purchasing a home must be paid off. Life-time repayments yokes around the neck. However easy as possible our financial institutions draw up our contracts in paying the longest possible time in order to maximize their profits, their motives are at our expense. That's business.

    But we had drawn up our finances the way that fits our one-income earner family. Because we wanted to become home-owners as our family grew.

    We chose a place in the country. We have paid off our house within seven years. We saved up. We paid cash. We planned our family holidays. We had one company leased car/van. We practically stretched our every dollar further.
     
  2. ExpertAdvice

    ExpertAdviceActive Member

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    Yes! a mortgage can definitely be paid off in five to seven years! However, I know that the shorter your mortgage period, is the more that you will be required to pay per month- instead of a lesser amount should you extend the redemption period. Also, If you make your mortgage period so short, I suppose that you wouldn't be able to access a lot of money because, again, to pay off your mortgage, it requires that you match the premiums plus interest to your payments! so, you see where I'm going...
     
  3. BrandonScooterman

    BrandonScootermanActive Member

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    I think it can as well. But like you said it takes real guts in shying away from over consumption. Unless you make a lot of money.
    I think it's a realistic goal for any middle class family with discipline.
    I plan to pay my first house off in <10 years by living very frugally.
    I am already doing it now while I rent and wipe out my student debt (end of this year at the latest!)
    Then save for a good down payment.
    I figure once I'm living with my partner then we can live off one 30k income and put the other 30k income towards the house. 150k-200k house should be ours and paid for well before 10 years!
     
  4. Corzhens

    CorzhensWell-Known Member

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    Our house mortgage started with my husband's bank loan. It was a benefit of his employment so we took advantage of it. The mortgage was for 11 years. After 2 years of paying, our office had our own housing loan privilege. And when I transferred the mortgage from my husband's bank into my bank, we had saved a lot in lower interest so instead of the 9 more years of installments, we had it for 7. Now there are only a few years left in that mortgage payments.
     
  5. Rosyrain

    RosyrainActive Member

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    It would be very expensive to do in the short term, but it can be done. You would essentially need to make double or triple payments to bring down the balance quickly. You also need to make sure there are no prepayment penalties.
     
  6. Pat

    PatWell-Known Member

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    The above statement is correct, you have to make additional payments, larger payments to bring the principal down and make sure there is no prepayment penality on the loan. One thought, if you are looking at the interest you pay on the mortage as a tax deduction, once you pay off the house loan you would not have that deduction any longer so weight your choices.
     
  7. Corzhens

    CorzhensWell-Known Member

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    I got a notice from the bank that our house mortgage will end this year. Gee, that's added money to our budget because the installment on our mortgage is 11,000 or around $300. I'm really glad to receive the news because aside from the money that would be saved, the house would be completely ours.
     
  8. GemmaRowlands

    GemmaRowlandsActive Member

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    You can definitely do it, however you need to think about whether it would be worth spending every penny and missing out on quality of life to some extent while you're paying the mortgage off. Some people would say that it was more than worth it, so if it is something that you would like to do then I see no reason that you shouldn't. You would certainly be thankful that you had done it at the end, when everything is paid off and you are ready to enjoy life and the money that you no longer have to spend on your house.
     
  9. BrandonScooterman

    BrandonScootermanActive Member

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    Quality of life doesn't have to be expensive. It's all frame of reference.
    Driving a 45K gas guzzler at 6% interest doesn't make your life any better then driving a 10k economy car.
    Drinking take-away coffee and eating take away food is worst for your body then making things at home, won't make you any better off.
    Buying luxury items on credit won't make you any happier, only poorer.
    I don't know anyone who consumes a lot of cigarettes, booze and gambles who would say it contributes to their quality of life.

    Most of the things people in modern western societies spend their money on has zero impact on quality of life.
    You know what a quality life looks like? One that has financial Independence.
     
  10. Lushlala

    LushlalaWell-Known Member

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    Wow, congratulations on having done that! Clearly, if you and other people can do it, it's possible. I mean, obviously it's all relative, based on so many different variables. As long as it didn't mean having to live solely on beans on toast for that whole time, I'd be quite willing to try this approach. I can imagine it must feel great not to owe anything on your house, almost like you've won the lottery. Kudos to you.
     
  11. Onionman

    OnionmanActive Member

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    That's a great approach to personal finance. Congratulations! It may not be one for everyone, as some people would prefer to rely on other people's money (i.e. the mortgage) to give them space to reinvest capital to get a decent return elsewhere.

    But that's simply one person's strategy and it really should be about what strategy works for you and then applying it. As you say, this is about freedom and it will certainly help you achieve it based on how you define that.
     
  12. missbishi

    missbishiWell-Known Member

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    So those seven years of frugality have led to a certain a mount of financial freedom. All that saving was definitely worth it. What are your plans now? Are you continuing with your frugal habits in order to save for something else or have you loosened the grip slightly?
     
  13. EditorsRHumansToo!

    EditorsRHumansToo!Member

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    Yes, I understand where you're coming from with finances. As a large family, we've been there, done that. But we made it--paid our house fully. But as the years get by, the children grow up and all our money goes to school tuition, basic needs, and bills. Even through years of wear-and-tear, now is time to allot money for home improvements and enjoyment of the freedom of home ownership and developments.

    Older children have gone out of home now-- married, and work and university. We're thinking of ways to improve the house to increase its value in the future. Trying to live frugally with other younger children's schooling, and home improvements and for retirement.

    True. We had bought a small house which we considered the mortgage to be payable within our target years of paying off our house. At the end of seven years, my husband accepted a redundancy package wnich we thought was the answer to our being debt-free. And sought employment elsewhere afterwards.
     
    #13Oct 28, 2015
    Last edited by a moderator: Oct 29, 2015
  14. Gavin

    GavinMember

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    Yes you are able to pay off a Mortgage as quickly as you wish, the important thing to remember is that any money you send over the minimum attacks the principal directly. There are a number of calculators online that can help you with this effort but I submit a simple solution to think about. Without worrying about what you usually send per month, lets say you want to pay off the house in 5 years. This means that you're looking roughly at 20,000 as a principal payment per year or an extra 1667 per month. While this math is NO way perfect because it doesn't account the minimum payment, you're able to get an idea that if you took 1,667 and subtract what gets put onto your principal by the minimum payment you'd have a mostly accurate number.

    Too long didn't read kind of thing. My house is worth 125,000 and I want to pay it off in 7 years. I would need to send roughly 2556 per month to the principal. My minimum payment tacks 600 off my principal so I will need to add 1,956 per month to my home payment to succeed at my goal. Simple, mostly accurate, just pay it off!
     
  15. xTinx

    xTinxWell-Known Member

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    If you plan out your budget and regularly set aside money for your monthly mortgage bills, it's very possible to pay off your mortgage in seven years or less. Financial discipline, strict budgeting and a mindset that prioritizes cost-efficiency will help you avoid the common mistakes most borrowers make. If you want to override the interest, then you should pay on time and more than the monthly minimum required payment.
     
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