How one woman paid off her mortgage 20 years early

When Jenna Rose began her hunt for a home in 2004, she had two things on her mind: A small mortgage, and paying off her new home fast.

With those two things at the forefront, Rose, who is now 49, began looking for the right home for her and her daughter in New Haven, Connecticut.

Now, 10 years later, Rose can proudly say that she is mortgage-free. Here’s how she paid off her mortgage in 10 years.

Getting an Affordable Mortgage

When she started her house hunt in 2004, Rose worked as an elementary teacher in New Haven, where she earned a salary of just over $48,000 per year.

“Although that’s a very decent salary, I did have a nine-year-old kid, and kids are always expensive, especially when you’re a single mom!” explains Rose, who adds that her daughter was one of the reasons she decided to buy a home in the first place.

“I went through a very tough divorce and lived in three different rental homes over a period of two years,” Rose says. “It was difficult for my daughter, Avery, and I wanted to give her some stability.”

But before Rose could give her daughter the stability she wanted, she first needed to make sure that she could afford a home. That meant finding a mortgage lender that could help her with the process.

“I called around and asked friends for recommendations, but in the end I met with a lender that advertised himself as ‘family friendly,” Rose says. “Turned out my instincts were right.”

Why? Because Rose says she knew her credit score wasn’t outstanding and she needed a lender who would work with her to make things happen. “The marriage and divorce left me with a credit score of just 630,” Rose explains. “That’s barely over the minimum of 620 that most lenders require to even consider you for a loan.”

With the help of her lender, and the fact that she was successfully paying down her student loans and other bills on time for the previous two years, Rose was able to get pre-approved for a loan.

“It showed the lender I was being responsible with my money,” she explains.

Rose was pre-approved for an $80,000 loan, which she adds was on the low side for her location on New Haven. “It’s an expensive city and back then houses often sold for upwards of $150,000,” Rose explains. “I was worried $80,000 would get me nothing.”

Finding a Home within a Low Budget

Rose’s low budget did prove to be somewhat problematic, as it took over five months for her to find a home.

“I knew I would have to go with a ‘less-than-perfect’ house, but as a single mom with no DIY experience, I didn’t want something that required a lot of work and time,” she says.

And that’s exactly the way Rose felt when she saw a $74,900 home with 1,109 square feet of space, two bedrooms and one full bath. The house required a significant amount of updating, as the house came with a cracked counter backsplash, scratched cabinets, and old carpet, among other things.

“However, the house had no structural damage,” Rose says. “So none of the changes required were affecting my quality of life.”

What’s more, in addition to the low price, the house had another major advantage: It was close to major roadways and parks, so it would be easy to get around and get some fresh air on weekends if she didn’t feel like driving far.

Once she took all that into consideration, Rose decided to take the plunge on the house. She signed for a 30-year fixed mortgage loan on September 4th, 2004.

“I ended up with an interest rate of 6.29 percent, which was just slightly higher than the average at the time,” Rose explains. “The lender accepted a 10 percent down, so I ended up spending almost $11,000 to get the house, including almost $7,500 down payment, closing costs and some taxes I had to pay in advance.”

Once private mortgage insurance (PMI) was added, her monthly mortgage payments ended up being $848 per month. “That was a lot of money for me at the time and I really had to stretch to pay it every month.”

Paying Down Her Mortgage

Rose wanted to get rid of her mortgage as fast as she could, so she attempted to add extra to her payment every month.

“Some months it was an extra $20, some months an extra $100,” she explains. “A good friend once gave me a scratch-off lottery card as a joke and I ended up winning $400 and putting the money towards the mortgage.” She added extra payments from bonuses at work, selling her car and buying an older one, and even reselling some old, unused electronics she owned.

After four years of making extra payments, however, Rose says she still owed around $62,000 on her loan. “I was disappointed and thought it would take me forever to pay the house off.”

Her solution? She decided to refinance in December 2008.

“By then, my credit score was up and I could afford to switch to a 15-year fixed mortgage loan,” she explains. The new loan was for $62,000 at an interest rate of 4.31, which made a huge difference: Her monthly payments went down to $662 per month.

Because Rose was already used to paying over $848 a month, she decided to keep paying at least that amount every month. “Most months I paid $1000, simply because I realized coming up with the extra $150 a month wasn’t that difficult,” she explains. “I gave up my cable, which cost me a ridiculous $90 a month, and got my daughter movies from the local library instead.” Eventually, she signed up with Netflix and started streaming instead.

Rose admits she caught a break a year later when she was promoted to vice principal at her school and her salary went up almost $9,000 per year. “I thought long and hard about it and in the end I decided to invest a percentage of it and put the rest towards the loan principal,” she says. “I knew a lot of people would have chosen to invest all of their money instead, but I didn’t have any other debt except some old credit card debt I paid off during the first year and I wanted to focus on my mortgage.”

Because Rose continued to pay extra money towards the principal, she actually finished paying off her loan in October 2014, just 10 years after she originally signed for it. “That’s technically 20 years faster than I thought it would happen,” says Rose.

Was it easy? Definitely not, Rose says. “I gave up a lot of things to pay off the mortgage,” she explains. “It took me two years to repaint the house and a couple more to replace those old cabinets and carpet.”

Plus, she adds that the house could use other updates, like new windows and a nicer fence.

“The good news is that now I can afford to focus on that because I don’t have a mortgage anymore,” she explains. “And since I’ve learned to live on a smaller salary, I can now focus on investing more and saving more for retirement.”

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