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Couple pays off mortgage in 5 years; expert says you can too

Posted: 3:23 PM, Feb 20, 2019
Updated: 2019-02-20 16:49:26-05
Couple pays off mortgage in 5 years; expert says you can too

If you feel your monthly mortgage payments are never-ending, there are ways to pay if off faster. One YouTube vlogger is making it her mission to help others with just that.

The YouTube channel called “Free to Family” was created by a woman, known as Kim, as a way to share lifestyle advice.

Recently, Kim started posting videos featuring financial tips and shared her personal success stories with her nearly 50,000 YouTube subscribers. One of those success stories included Kim and her husband paying off their mortgage in just five years.

“We had this common goal. We want to retire early. We want to have financial independence. We want to be here for our kids,” Kim says. “We want to travel when they're 9 and 10. We don't want to have to wait till we retire.”

When the market crashed in 2008, the couple bought a home by short sale at a price they could afford if either of them lost their job.

“I was like let's just try to see if we can challenge ourselves to live on one income,” she recalls. “And we weren't making a lot.”

For the next five years, the couple saved and sacrificed.

“We worked opposite shifts for many years, which allowed our children to not be in daycare,” Kim says.

They also prepared their own meals and never ate out.

Their sacrifices paid off. The family saved more than $100,000 and paid off their mortgage.

What if you want to do the same?

Mortgage broker Ray Williams says it's possible with planning. Williams says even if you can’t pay off your mortgage in five years, a few changes can help you shave years off.

"If you budgeted down to one twelfth of your payment and add that every month, you can pay off your loan in four and a half years faster," Williams says.

He says you can also recast your mortgage by paying what amounts to an additional down payment on the principal, which reduces your monthly payments and interest rates.

"You could call your servicer and engage with them through that process and have them recalculate your principal and interest without refinancing and taking on the costs of refinancing, and then pay it off faster," he explains.

Still, there are things to consider.

"If you're still in a peak earning years of your life, you know you may lose that potential tax deduction, so consult your CPA,” Williams says. “Then, you know could you be reinvesting that money elsewhere to earn a return."