Debt Free!

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Debt Free!

(except the over half a million dollar mortgage!)

Ryan, Dave Ramsey would NOT be happy … he would want you to pay that l’il ol’ mortgage off. But, what do you want to do? What do our readers think you SHOULD do?

I would also like to know more about the mortgage (interest rate; fixed/variable; etc.)


A short time ago I was deep in debt, and constantly stressed and worried about it. I wasn’t (and my wife definitely wasn’t either!) going to live like that anymore. So I took action to aggressively pay down all my debt and find a job that paid significantly more than I was making at the time.

Since that time (about five years ago) I have paid off all of my debt (including student loans, credit cards, and cars totaling around $60,000) except our house.

Granted the mortgage on our house is $665,000 and our home is worth around $600,000, so technically that puts us about $65,000 in the hole. We don’t, however, plan on selling anytime soon, so that loss is not yet (and hopefully won’t ever be) realized.

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Reader Comments

Great job so far Ryan! Time to grow at light speed now 😉

Looks like your well positioned Ryan.

@Scott- Thanks!

@ AJC – My mortgage is broken into a 1st and a HELOC (we used the HELOC to avoid PMI as we did not put 20% down). The 1st is for $548,000 @ 6.25% locked for 30 years. The HELOC is for $117,000 and is adjustable tied to prime. It’s currently @ 4.5%.

Your home price will go up eventually, don’t worry

a 665K mortage is not considering you have the type of income to handle it

@ Ryan – At some stage you may want to consider a refi (if you can get one) to lock in that rate on the HELOC; I wonder if that would also lower the cost on your mortgage a little?

Were you able to get the HELOC at the same time as you took out the mortgage? Or did you originally have the PMI and then later got the HELOC to “remove” the PMI?

@ Moneymonk – That’s what I keep telling myself! What do you personally use as a projected rate of appreciation going forward? I know many people say that RE appreciates on average @ 6%/year, but that doesn’t take into account that:

A) they use median home prices to determine that 6% figure and homes have been getting bigger (in other words are people just paying more $ for more home)

B) The obvious turmoil in the current market

@ AJC – I just assumed we wouldn’t be able to refi b/c we are upside down, but it is definitely worth looking into.

@ Debbie – We got both mortgages at the same time. Why do you ask?

@ Josh – Thanks, now I just need to stop being on defense and take some serious action towards my number.

That is wonderful to hear you aggressively paid down all that debt. I know that it is not easy to be aggressive for that amount of time. Any tips for keeping the goal and the motivation in sight?

@ Money Funk – I think if you are in need of motivation, the debt snowball works well to actually see liabilities be eliminated off your balance sheet and help you realize you are making real progress.

As for the goal part, I did a lot of research on setting goals and spent all of my free time immersed in financial books and personal growth stuff to the point where I transformed myself to a different person as far as money is concerned.

I now had the mindset of a wealthy person, and my actions and decisions rapidly changed to fit my new persona. Debt never felt good, but now it repulsed me and felt so foreign to me that I needed to remove it as quickly as physically possible.

Thank you for that. I especially love the last part of that message, “I now had the mindet of a wealthy person…”. You couldn’t have said it better. 🙂