Friday, 18 September 2015

How I paid off my mortgage! (Part #2)

After determining that we were not fans of renting and finally buying the property I talked about in "How I paid off my mortgage! Part #1", we then realized how much we did not enjoy paying interest, and due to this we finally got our financial feet under us. We started to quickly pay off the principal on house #1 and had gotten it down to roughly owing $100 000. That's when the priorities needed to be adjusted.

An Easier Life


The discussion about having children turned from a discussion to a "soon". My wife and I both worked full time jobs and we travelled a lot with our jobs. With that being said we decided the relative remoteness of the property from neighbours and hospitals was more than we were willing to deal with so we decided to sell and move to the city. 

We called a realtor to make the sale and purchase. Our appraisal for the house we were selling came in at around $250 000. The property value increased by just over $100 000 in 4 years.

(Mistake #3) Like the majority of people we had chosen to move up in houses. That is, getting bigger and better. We had paid off a good portion of our principal on our first house and now also had an extra $100 000 in equity. We bought a beautiful 2600 Sq ft raised bungalow for $305 000.00 after selling our first home for $245 000 That left us with a $160 000 mortgage. Now we realized that if we had just traded properties for one of the same price we would have had a $100 000 mortgage like we did in house #1 and would have been satisfied with our location.

If you are keeping tabs, I have mentioned that we made three costly significant mistakes in the first four years of home ownership. At this point in time we could have been much further ahead financially but through either financial ignorance or just plain greed we had made these choices and as it turns out they still weren't that bad.

We again did significant work on this house #2. We completely finished the large basement and finished the yard. Most of the work was done through sweat equity. Our first child was born a year and a half after moving to house#2 and so the prophecy was fulfilled.

Changing the Game


We were continued to pay down our mortgage as fast as possible  but were also putting some money aside for investments. In 2009 we saw an opportunity to purchase a unit in a building that was undergoing a condo conversion. We had the down payment, jumped in with both feet and became landlords. I will go into this in detail in a different post and talk about our passive income streams and income properties.


The Only Constant Is Change


In the summer of 2010 our company transferred us from Edmonton to Toronto. What a change that was and again the priorities were changing and once again our priorities needed to be adjusted.



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