The financial wizard also shared a few tips people could take into account while paying their own mortgages.
Editor’s note: This article was originally published on October 26, 2022. It has since been updated.
Paying back any kind of loan or mortgage is a nightmare, turning into a swinging blade that has the potential to go wrong very quickly. For Liz Gendreau and her husband, Todd Gwiazdowski, it was the same. After a terrible surgery that sent Gwiazdowski into a septic shock, nearly killing him and losing his job in 2009 because of the recession, their family decided to take up matters in their own hands and realized that things can be much better. "We learned the hard way that when bad things happen the last thing you want to worry about is money," Gendreau said. This became one very important tip in paying back mortgages quickly.
The couple realized that having something like this hang over their head was exceedingly problematic. In times of emergency, it could very well prove to be terrible that there were no savings or extra money to keep a family of five afloat.
They had bought their house in 2006 for $345,000, putting 20% down, as per Business Insider. In 2013, they refinanced to a 15-year mortgage with a lower rate of 2.75%. This cut their mortgage down to 15 years, but they knew they could pay it down even faster. Realizing what kind of capability we have in paying our mortgage is very important to avoid losing savings in the future.
Additionally, Gendreau kept a single-minded focus on paying back the mortgage. She was the sole income earner in their household and while her husband worked part-time, she was the one making all the mortgage payments. Her lesson was to persevere through all the setbacks. "The biggest lesson was that although the goal may seem impossible at first, if you keep going, you'll get there," the mother-of-three said. "Not having a mortgage isn't as good as people say it is—it's better."
To really move in the fast track, they invested in a high-yielding savings account. Additionally, they used extra paychecks, bonuses, and tax refunds to help them meet their early payoff goal. They decided to use this technique so that the interest on their savings account wouldn't change or go up and down with the market. After saving up a lump-sum of money, they paid off their mortgage all at once.
They made one last payment of $183,000 from their savings to be mortgage-free in 2019. Instead of making extra mortgage payments, Gendreau decided to put her money in the savings account so that the money isn't locked in the house and she can retrieve that money when there is some health expense in the family. After they made this payment and became mortgage-free, they decided to take a massive breather. "We paid off the house in March 2019 and I took the family on a dream trip to Japan that summer to celebrate," Gendreau said. When the pandemic came, they were happy to not have any mortgage payments left during that trying time. "Living mortgage-free through the COVID-19 pandemic has been a blessing," she added.
After this boss move, she made sure they had something to follow, which is another advice she gives. "Make sure you have your financial basics covered first, and don't ignore your retirement or other financial goals for the sake of mortgage freedom. You need to find a balance that works for you," Gendreau said.
Representative Cover Image Source: Getty Images | Witthaya Prasongsin