How We Paid Off A Mortgage Against All Odds

Terror set in as I sat in a conference room at work early last year when I heard about a plan for the company that could potentially impact future job security. My future job security. I wasn’t mentally prepared for it. I wasn’t mentally prepared for change.

My husband and I had solid financial footing thanks for being big advocates in the personal finance space since 2015, but we still weren’t ready to deal with any dramatic shifts in our personal or financial plans. Fortunately, the announcement at work was made a bit prematurely and well in advance of any actual change that could take place. Even though it seemed a bit premature, at least for the moment, it was enough to rattle my cage and prompt an obsession to create a contingency plan that would yield me a decent income without requiring an enormous amount of work or travel. 

Job Security Is An Illusion

I always knew that statement to be true but there’s an unavoidable level of complacency that inevitably sets in when you work for the same employer and in the same industry for your entire adult career. I had been lucky to pick a professional path that paid well with solid benefits. Lucky because, let’s face it, I certainly didn’t put any effort into researching salary potentials when I checked the box to indicate my major as a freshman college student. 

As a first-generation college student, I paid really close attention to my professors and anyone I perceived to have been successful in their career and with money. I latched onto the common belief that there is no job security, only career security. This sounded plausible to me and as I have been extremely grateful my entire career knowing that even if my specific job was eliminated I would easily be able to go to another company and land a comparable position. Of course, this sounds good in theory but doesn’t look too great when you’re staring it down in reality after 14 years with the same company.  I repeat, job security is an illusion.

The Next Chapter

After 14 years with the same company and 20 in the industry, I knew that if I did eventually need to change jobs and I wanted to continue earning money at my current rate with good benefits it would likely mean commuting at least 60 minutes one way. Ugh. Who wants to do that? Certainly not me. I know how awful a work commute can be having done it before in my 20s. I used to commute 53 miles one way, which amounted to 1 hour and 15 minutes tacked onto my workday on each end. And if I wanted to beat traffic, I need to leave around 5:30 AM. Now that was okay in my 20s before I had a family, but at this point in my life, there is no way I want to sign up for such a time commitment. After all, my family runs better when I’m physically present. 

So I hatched what I thought was a perfect plan. I looked into taking evening and weekend classes and clinicals to become a nurse. This way I could maintain a relatively high income with benefits, have flexible hours, and not have to commute.

I know all of the nurses out there are probably shaking their heads right now. And I can’t blame you. The fact that I thought I could just “become a nurse” is really funny in hindsight. Nevertheless, at the time, I was in self-preservation mode and I thought it was a perfect plan. I even met with the Director of Nursing at my local college and confirmed that I could skip a good chunk of coursework since I already had the classes and worked in a related industry for the past 20 years. That left about 3 years (including summers) of classes and clinicals to the tune of about $10,000 total.

This plan was perfect until it wasn’t. After having had many discussions with actual nurses about the coursework and time commitment, it seemed less and less of an option for someone who was trying to work full-time and maintain a family. I mean, what’s the difference between a long commute and having to attend classes and clinicals most evenings and on the weekends? The answer is stress. I lose time with both options but with the latter, I gain stress. 

In the end, we decided this was not a viable course of action for the next few years. We would need to spend $10,000 and I would lose an enormous amount of time and increase my stress levels. Next.

The Next Best Thing 

After many discussions, we thought the next best thing would be to continue on our path to financial independence by working to pay down debt and investing with hyperfocus to get there faster. A little bit ago we decided to stop chasing FIRE and start taking our time. Well, we’re back to chasing FI in order to maintain our lifestyle with as few interruptions as possible. Let’s face it, I didn’t want to go back to school as much as I didn’t want to change jobs in the first place. So we decided to re-focus on energies on paying off our mortgages – the only debt we had. We have the mortgage on our primary home and we also had two rentals for a grand total of three mortgages. We bounced back and forth over the years over whether or not to pay them down or invest the extra cash. We were half-heartedly putting extra on the principal from time to time but nothing that ever really made a huge dent on the balance sheet. 

This time was different. We were faced with the possibility of me having to change jobs or even careers. With that came the uncertainty of not knowing if I would make as much money as I was currently making. And since my job has a steady income with benefits, not knowing if that would be sustainable in the long term made reducing monthly obligations a priority. If we could reduce or eliminate the rental mortgages, the income would more than cover the mortgage on our primary home.   

At best guess, I had at least a few years before my job could be affected, so in February of last year, we set our sights on eliminating our rental mortgages. That way, even if I did have to eventually find a different job, I would have the freedom of reduced financial obligations and the luxury of finding employment locally or even changing careers altogether. For the first time in weeks, I felt a sense of real direction and peace. We had a solid plan and knew how to execute it. We would live entirely off of my steady income to cover our primary mortgage and routine expenses and we would use any income my husband produced to plow through the rental mortgages. Easy peasy, right? Well, not so fast. 

Related:

• Why We Stopped Chasing Early Retirement For A Happier Life
• 5 Reasons Ditching FIRE For FIOR Might Be Your Best Financial Move
• The New FI: Forget Financial Independence, Achieve Financial Improvement First
• Growing Up Poor Was My Single Biggest Financial Motivator

The One-Two Punch

A few weeks into our new plan, everything changed. We were still reeling from the possibility of me having to eventually change jobs and all that that entails when the entire world came to a screeching halt. The WHO announced that we were solidly planted in the midst of a global pandemic. Before we knew it, everyone was speaking a new language, and using words like asymptomatic, clusters, and antigen. COVID hit hard. Italy was in lockdown and the US didn’t seem far behind. Businesses started to shutter and lay people off and many were facing significant financial hardships that they never faced before. You were considered lucky to be able to put food on the table. Paying your mortgage or rent was a luxury. As you might’ve guessed, this is where that second gut-punch came into play.

Managing Leveraged Rental Properties

A leveraged rental property is a fantastic way to build wealth by letting someone else (read: the tenant) buy an asset for you. Many financial experts believe your extra cash would be better spent investing in something that will likely yield a higher return than paying down a low-interest rate mortgage. And for the most part, I understand that rationale which is why we have bounced back and forth between the two philosophies in the past.  

It all changed when COVID was stacked on top of that unexpected work announcement. Leveraged rental properties are great until they’re not. Another round of sleepless nights struck without warning. Suddenly, the “maybe someday” idea of me having to “possibly” find a new job was a speck in the rearview mirror. What had me tossing and turning this time was our leveraged rentals. Sure, we could’ve covered all three mortgages if our tenants couldn’t pay, but it certainly wouldn’t have been a breeze. We could’ve also pulled money from our emergency fund or even investments, but again, that would’ve been a last resort as well. 

My husband and I immediately started thinking about revising our just revised financial plan. What could we do? We could get out of the fast lane and into the lightning lane. Every spare cent was going to be applied to the rental mortgage with the highest interest rate of 3.99% I know that’s still a fairly low-interest rate, but what we were chasing at that moment was peace of mind. Eliminate the rental mortgages and it wouldn’t matter (nearly as much, anyway) if a virus or another future catastrophe rattled the entire economic infrastructure. 

Different Career Strokes for Different Folks

I touched on this a bit before but let me reiterate the point. I have a steady income with benefits. My husband does not. My husband has followed his passion into a creative career. He loves it more than anything and would work for free – and sometimes he has. That said, this could not prove to be one of those times. There was a project he had slated to start shortly after the pandemic hit. It was canceled. Not only was that project canceled, but all other prospects were pulled from the lineup as well. In fact, his manager actually told him the industry was dead and that he should think about a different career. Needless to say, that was not what we needed to hear. 

Some personalities refuse to take no for an answer. My husband has that personality. He refused to believe he couldn’t continue producing creatively in his independent film career. So he hustled, and hustled, and hustled. He made endless calls and emails until he heard… YES. Despite the naysayers and the economic climate, he saved the project and took on the challenge of pre-production in the middle of a pandemic. Shooting mostly outdoors and following all the safety protocols allowed him to accomplish the impossible. He made a really good film and no one caught COVID.

How We Paid Off The Mortgage

We took every last cent of the payment he received from the film and applied it directly to the first rental property and eliminated the mortgage. Eight months after the announcement and start of the pandemic our accelerated financial plan was achieved in reality. We felt an immediate sense of relief. I mean the kind of relief that makes you sigh out loud. You know what I’m talking about. Not only did we reduce our monthly financial obligations but we also increased our monthly income. 

Oh, and just in case you were wondering. We owed a high-ish five-figure amount on the mortgage. So it wasn’t like we paid off $5,000 or anything. 

No, we didn’t need to pay off that rental mortgage to be in a good financial position. Ironically, our tenants didn’t miss a beat and continued to pay the rent on time every month. And other than my husband losing a few planned projects at the beginning, he was able to salvage one almost immediately through his award-winning hustling skills and has since been able to line up a few more for the future. Our emotions were the only things affected during the last year, but that was enough to change our entire financial plan and course of action.

It all started with a plan that was followed by action. Nothing is impossible.