Paid off!!! It's officially ours!!

[bgn]

Back in the day when I had a mortgage with a printed amortization sheet, I used to love making extra payments on the principal. Early in the mortgage, one extra payment would let me scratch an entire year off the 30 year amortization schedule. That's how powerful extra payments are.

On the other hand, someone could argue with some validity that I was actually hurting myself, because every year (if there is serious inflation), the payments were less and less real money in real terms (because the money was cheaper).

This is basically why I haven't paid mine off. Can't beat 0% for 36 months.

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[stoptothink]

This is basically why I haven't paid mine off. Can't beat 0% for 36 months.

Yup, feel stupid now for paying off a 2.75% mortgage when VMFXX 7-day yields have been >5% for a while and even I-bond rates have been 4%-9%. I'm trying to make up for it (in my head) by churning credit cards with 12-18 month 0% APR.

 

[Fibrepunk]

Not making sense at all, I would assume OP had 0% interest looking at the time of the order/delivery. Why would OP pays off on the Mav before paying off the Mach-E(if it has higher interest on the loan) or why not pay down the mortgage with the extra $ and just stick to the minimum monthly payment for the Maverick to keep that 0% interest going as long as possible?

 

[stoptothink]

Not making sense at all, I would assume OP had 0% interest looking at the time of the order/delivery. Why would OP pays off on the Mav before paying off the Mach-E(if it has higher interest on the loan) or why not pay down the mortgage with the extra $ and just stick to the minimum monthly payment for the Maverick to keep that 0% interest going as long as possible?

Don't assume, some dealers made you choose between incentives. Mine would not allow us to take both the Ford financing 0% offer and the farm bureau rebate. They did offer another $500 rebate to finance through whatever bank was giving them a kickback (don't remember). Maybe I could have called their bluff, but best case scenario for them was for me to walk away so they could sell it for $10k more (I was a June '21 order, this was May '22). So I played the game, took the financing from their bank (like 6% for 48 months) and just paid for it in full before the first payment was due.

 

[K5Blazer]

Paid mine off two weeks ago.
Dont even know what my interest rate was, I only made 3 payments including the balance. The rate was probably pretty high being Ford Credit!

What really surprised me was how fast I got my title after the last payment, took less than a week.

 

[Gray Goose]

Paying off anything early is not wise unless there is enough financial discipline to put that payment into investment accounts or paying off more debt. Paying off early to buy more stuff is counter productive. IMHO

 

[Jman79]

Back in the day when I had a mortgage with a printed amortization sheet, I used to love making extra payments on the principal. Early in the mortgage, one extra payment would let me scratch an entire year off the 30 year amortization schedule. That's how powerful extra payments are.

On the other hand, someone could argue with some validity that I was actually hurting myself, because every year (if there is serious inflation), the payments were less and less real money in real terms (because the money was cheaper).

People will often say this type of stuff but it rarely turns out that carrying debt is beneficial. 99.9% of the time you're better paying it off. It puts you in a better position in general.

I would often hear things like I have a great mortgage and make more with my extra $$$ in the market. In general though not many are making it work like that, it's just a mental trap to carry more debt and make bigger unnecessary purchases.

 

[JennyJoannSuebeeMcNash]

Congratulations! What an awesome feeling!

Hoping to do the same. Debating paying Maverick off vs. continuing to put money away to pay the house off in the next couple of years.

 

[K5Blazer]

Paying off anything early is not wise unless there is enough financial discipline to put that payment into investment accounts or paying off more debt. Paying off early to buy more stuff is counter productive. IMHO

Who said anything about buying more stuff? I certainly didn’t.
Being debt free is very wise. You’ve got it backwards.

 

[BradnChristine]

Each individual situation is unique. 15-20-25 years ago when mortgage rates were anywhere from 8-18% - making an additional payment annually was a huge deal and made great financial sense.

Today, I have a 2.49% fixed rate 30 year mortgage that I won't pay a penny off early. I have a 4.15% high yield savings account at minimum, or a CD, treasury bill, note, or even bonds that pay above that. It is more wise for me to invest in something else than to pay extra on my mortgage.

Agreed. My 3.375% mortgage is getting no extra; neither is my 4.74% Maverick loan. Primis Bank pays OVER 5% for a checking account with no minimum balance, and several credit untions are paying 5.65%-5.75% for 3 month to 12 month CDs. Wish I had back some of the extra mortgage payments I made in 2021!

 

[Ozarkbeard]

It is a great feeling when you pay something off

It is a great feeling when everything is paid off.

 

[bbhaag]

Who said anything about buying more stuff? I certainly didn’t.
Being debt free is very wise. You’ve got it backwards.

Yep not going to buy more stuff just paying off more debt. Maverick payment is being rolled right into the Mach-E payment so we won't even miss it. Once the Mach-E is paid off both vehicle payments get rolled right into the mortgage payment so we won't even miss it.

Once the mortgage is paid off the vehicle payments and mortgage payment get rolled right into the Vanguard account. Can't put them in the IRA or SEP since those get maxed out every year already.

Anyway, thanks for all the encouragement everyone! Much appreciated!

 

[Bob The Builder]

House and Jeep paid off. Maverick? Well, no, but we will always be above water on the loan due to the down payment and how these trucks will hold their value for some time to come even with the coming recession.

I'm 74 now and bought more than a few vehicles over the years and my Mav will be my first that actually will appreciate in value by 13% driving it off the lot. Source: KBB. These are strange days indeed.

 

[Gray Goose]

Who said anything about buying more stuff? I certainly didn’t.
Being debt free is very wise. You’ve got it backwards.

My comment was not directed at you. I saw at least 2 other posts that were paying off early to trade for something newer. I completely agree with being debt free. I have been debt free since 2005 that includes a paid off mortgage.

 

[Chicolini]

Agreed. My 3.375% mortgage is getting no extra; neither is my 4.74% Maverick loan. Primis Bank pays OVER 5% for a checking account with no minimum balance, and several credit untions are paying 5.65%-5.75% for 3 month to 12 month CDs. Wish I had back some of the extra mortgage payments I made in 2021!

This logic only works if you don't pay income tax. Most of us get a Form 1099-INT for the interest earned on the CD and can't deduct the interest expense on a personal vehicle. If that is the case, you should do better paying off the loan.

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