I came up with the idea to focus on the second mortgage, and realized yesterday, I can actually extend that to paying off our Seattle house, with a larger time horizon. Basically, if I set a target to pay off our entire mortgage (focusing first on our second mortgage, paid off on a one year schedule), I can consider an aggressive schedule for the rest of the mortgage. What will this get us? Well, if we can pay off our Seattle house, it will put us in a better financial position by creating a passive income stream (from the rent), minimize monthly cash outflow, and at the time I think we will be able to pay it off, our kids will be out of elementary school, and we might have a broader range of locations available to consider buying. Right now, we want to stay with the same elementary school, which puts us in a very tight location grid for buying.
So, first goal remains - pay off our second mortgage by May of next year!
Next big goal (and, it's a monster!) - pay off our first mortgage by December 31st, 2018. At that point, both of our kids will be out of elementary school (can't even believe that!) Current amount owing = $492,300.
Here are the sources of funding that I'm considering:
- Once the second mortgage is paid off next May, funnel all of those payments to the first mortgage.
- Standard monthly payments.
- Additional monthly payments, based on the beach house selling & additional cash flow from that.
- My bonuses at work.
- My stock options at work.
- The difference between our rent and our mortgage payment each month, save for an emergency fund we'll create for additional expenses on the Seattle house.
As you can see, I've left out M's bonuses & stock options, as he's not sure he'll be at his current employer beyond the initial year. The most exciting part of all? If I can hold out in my current career until the end of 2018, paying off the Seattle house means (drumroll. . . . ) I can move to a much more flexible job and/or reduce my hours! Hurrah! Now, that is a goal I can get behind and actively work towards achieving.
I'm so excited to have a more concrete plan for the future, as well as a horizon with which I can see a future that doesn't involve me working in this industry or these hours. I feel so very motivated to do this. It's going to be a huge challenge for us, but I think we can do it!
Dream big! Do you have any big goals on the horizon? What's holding you back from setting them?