Got a Mortgage?

I have spent most of my working life as a pastor and that has made a difference in how our housing needs have been met.

When my wife and I were first married, we assumed a contract on a small home in Des Moines. When I accepted a call to be the pastor of a church in small Iowa town, we were able to sell our home quickly.

The church we moved to provided us with a parsonage. That parsonage was our home for over 20 years and the place where we raised our son and daughter.

When we finally left that church, we took out a mortgage on a home in Waterloo, Iowa. After six years there, we decided to retire and move to Minnesota where our son and daughter had settled after graduating from a college located in a suburb of the Twin Cities. Our house in Waterloo sold quickly and at a significant increase in price over what we had paid for it.

I was 63 years old when we took out our current mortgage on a new home in Brooklyn Park, Minnesota, a northern suburb of the Twin Cities. Actually, we took out two mortgages: one was a 30 year fixed mortgage at 5.3% and one was an adjustable rate mortgage. Knowing that the interest rate could change on the adjustable rate mortgage, we worked hard and got it paid off in two years.

We then turned our attention to the 30-year fixed mortgage. We hope to get it paid off in the next three to five years. How have we gotten to that point? Here are a few simple tips.

First, before you do anything else, set aside some easily accessible cash that can get you by for several months. Your comfort level will determine how much you need.

Second, be willing to postpone other major purchases until you have the mortgage paid off or at least significantlyreduced. We have an old car we would like to replace, but have decided that a different car can wait until the mortgage is paid off. Our financial adviser has strongly urged us to put first things first and eliminate our mortgage. Not only does it make good business sense, it is also the right thing to do for your family. We don't know how long we'll still be around, but we don't like the idea of saddling our children with the responsibility of having to deal with an unpaid mortgage when we die, especially given the current housing market. Ideally, we would like to leave a paid-for house.

Third, think through the implications of the interest rate on your mortgage and the interest rate on other debts. Rather than putting more money into savings at the horrendously low rates that savings accounts are receiving, it makes more sense to pay off a mortgage that is costing you a higher rate than you could earn from a savings account...or a certificate of deposit. Again, your comfort level must determine how much you put aside and how much you pay on the mortgage. We had the same decision to make when we bought a new van a few years ago. Do we pay it off quickly or set aside money in savings. The interest on the van was over 8%. It was easy to decide where to put our money.

Fourth, if you have credit cards, pay the balances off completely every month if at all possible. Credit card interest rates can eat up your money if you're not careful. The money "wasted" on credit card interest can be applied to the mortgage. Making only the minimum payments can be an invitation to financial disaster.

Fifth, be diligent in spending every extra dollar possible to pay off the mortgage. Tax refunds, part-time job earnings, etc., can be applied to the mortgage. My wife and I are basically retired. My wife has an part-time job at our church. A large part of her earnings go toward the mortgage. Every year for the past few years, my wife and I have worked as registrars at flu shot clinics. The money we earn goes toward the mortgage. This year I will be doing some work helping the government prepare for the 2010 census. My earnings will go toward the mortgage.

Sixth, check your bank balance at the end of each month and see if there is something left over that can be applied to your mortgage.

Let me caution you about something: Don't let the process of paying off your mortgage early rob you of havingfun, eating out, and taking trips. We still try to maintain a normal lifestyle. Last summer we took a one-month vacation trip to the Pacific Northwest. We eat out occasionally. We have fun times with our family. We tithe to our church. We do, however, keep our intention of paying off the mortgage early as one of the main focuses of our lives.

For us, to enjoy life includes getting out from under the burden of the mortgage.