(The following is a transcription from a video Linda and I recorded. Please excuse any typos or errors.)
We paid off our house in 35 months. That is just under 3 years.
And so Linda and I decided we wanted to sit down and analyze how we did it and what the keys were to reaching this incredible milestone in such a short amount of time.
Just a few years earlier I never dreamed that we would be able to pay off our mortgage early at all, let alone this fast.
We always wanted to live a mortgage-free life, but honestly did not know if it was possible not to have a mortgage.
And by God’s grace, we paid our house off in just under 3 years. In this article we’ll discuss the things that we did that helped make it happen.
Below, you’ll find the transcript from our discussion. But if you’d rather watch our video on this very subject, you can do so here:
All right, let’s get started! Here are the 6 things we did to pay off our home in 3 years… and we hope this is an encouragement for you too!
1. Believe It’s Possible
Bob Lotich: I always wanted to have a paid off house. How long have you wanted to have a paid off house?
Linda Lotich: Well, honestly, I didn’t know that we could.
Bob Lotich: I don’t know if I knew that you could either, but I always wanted to. If it was possible, I wanted to and I didn’t want to wait until I was 65 to do it. Somewhere along the lines, since we’ve been married, we began to believe that it was possible, which I kind of think is the first step and the first key. Don’t you think?
Linda Lotich: Yeah, because not only it is actually possible. I think your old neighbors, I think they paid off their house and I remember your family talking about it like, “Yeah, oh, they have a paid off house.”
Bob Lotich: Yeah, it’s a big deal where I come from.
Linda Lotich: It is. It’s a huge deal. I knew that there was this, oh yeah, there’s just some of those people who either lived there for a really long time or whatever and they have a paid off house.
Bob Lotich: They’re really smart with their money. I don’t know.
Linda Lotich: But then we started realizing, wait a second. Not only is it possible, financially, but then with God’s grace-
Bob Lotich: Yeah, it’s actually-
Linda Lotich: … kind of the wind at your back, it’s like it’s not…
Bob Lotich: … It’s not nearly as difficult as we always imagined.
Linda Lotich: Yeah. It took the impossibility out of it.
Bob Lotich: Yeah, so much of it is to this point of believing that it’s possible because once you believe that it’s possible, then you start thinking, “All right, well what do I need to do to make that happen?” You begin making different decisions, whereas if you just think it’s an impossibility and you never even think about it, you’re never going to try and, therefore, it kind of is an impossibility.
Linda Lotich: Right.
Bob Lotich: That’s just really the first step.
2. God’s Grace
Bob Lotich: In our case, I think the absolute biggest factor at all in helping us accomplish this is God’s grace. There’s just no way we can talk about this without saying that. There’s just no way because there were just so many factors that caused us to get the thing paid off that-
Linda Lotich: It shouldn’t have worked.
Bob Lotich: … Yeah, it just shouldn’t have happened. Mathematically, it shouldn’t have happened, but we saw that as we started going after this goal and doing what we could do in our strength, God came through and just, like you said, like wind at our back, just pushed us forward, propelled us forward so much faster through this process than we could’ve imagined.
Linda Lotich: I don’t know if this is on the list or not, but one of the things we did was we started giving to the Lord with that goal in mind. No doubt, I feel like-
Bob Lotich: Which doesn’t make sense.
Linda Lotich: … It doesn’t make sense.
Bob Lotich: You’re trying to pay down this massive debt, so let’s give more money away so you have less to spend.
Linda Lotich: But it does make sense in the law of the Kingdom, which is that when you sow, you reap. When you plant seeds, something comes up. We learned that all in preschool, kindergarten, where you plant the grass seeds and then you watch it grow, but it seemed to work that way for us.
4. Put Down 20%
Bob Lotich: On a really practical note, one thing that we did was we put down 20% when we bought our house. Now, that was a challenge in and of itself, coming up with that kind of down payment, and that had its own series of miracles in it to allow us to do that, but if you can put down 20% it does a couple things for you. The first one is that you now only have 80% left to pay on your house.
Linda Lotich: Simple math.
Bob Lotich: You just chopped off a big chunk of what you would have to pay, just by putting down a 20% down payment. That’s kind of obvious, but the other factor here is private mortgage insurance.
If You Don’t Put Down 20%
Bob Lotich: If you don’t put down 20%, almost every lender is going to charge you PMI, or private mortgage insurance, because you’re more likely to default if you don’t put down 20%. That fee, what that’s going to cost, sometimes might be $100 a month that you have to pay extra every single month for this insurance because the lender thinks you might not end up paying your bills.
By avoiding that, you now have an extra $100 a month that you can put towards your mortgage. That $100 a month goes a long way. That’ll shave years off a 30-year mortgage, just by paying that consistently.
Linda Lotich: It’s crazy.
Bob Lotich: Being able to do 20% was definitely part of this equation.
5. SeeSaw Principle
The next thing was the seesaw principle. We’ve done seesaw challenges before, you and I, right?
Linda Lotich: Why is seesaw sounding really funny?
Bob Lotich: Who weighs more? I have another video about the seesaw principle where I go into depth about this and you can check that out for more information, but the idea, the goal is, is that you are constantly trying to free up margin so you have more cash so you can put towards your mortgage. It’s the same idea as the debt snowball. Each debt you get paid off, you now have more cash that you can put towards the next one.
Expand That Gap
Just like that thing, but the goal here is how can you continue to expand that gap, increase that distance between your expenses and your earnings so that you have more and more and more to put towards the mortgage.
Just by focusing on that and continuing to work towards increasing that gap, widening that gap, it just puts you in a really good position to really make progress on your mortgage super fast, like it did for us.
Linda Lotich: So, you would just do that by making more money.
Bob Lotich: Making more money.
Linda Lotich: Which sounds really like, oh, just make more money.
Bob Lotich: Yeah, picking up a side hustle.
Linda Lotich: Anybody can do that.
Bob Lotich: Yeah, that’s the thing though. It’s easier now than it’s ever been.
Linda Lotich: True.
Bob Lotich: There’s so many side hustles and ways to make some extra cash on the side. It’s insane. We have a whole bunch of videos about that too.
Linda Lotich: Okay. So that, or-
Bob Lotich: Or reducing expenses.
Linda Lotich: … start cutting back what you’re spending.
Bob Lotich: Yeah, you have two sides of the equation.
Linda Lotich: Quit going to Starbucks every day.
Bob Lotich: You either increase it or you decrease it, but both of them are going to expand that gap so you have more money to put down towards your mortgage.
The Incentive To Paying Off Your House
Linda Lotich: Okay. Can we just remind them the incentive for this would be to pay off your freaking house?
Bob Lotich: Yeah, man. It is so good. One of the best feelings of my life, I think, when we got that mortgage paid off.
Linda Lotich: Oh, my gosh.
Bob Lotich: Don’t you think?
Linda Lotich: Yeah, it was pretty awesome.
Bob Lotich: Don’t get me wrong, I know that there are mathematical benefits to having a mortgage and there are people that argue that and that’s completely fine. I’m not disputing that, I’m just saying the peace-
Linda Lotich: The feeling, yeah.
Bob Lotich: … that comes from owning your house outright is all it’s cracked up to be. It’s really good. It’s really nice. So, if you’re not sure about whether you want to chase that goal, it’s a goal worth chasing.
Linda Lotich: For sure. I think you don’t know what it’s going to feel like until you get there really because I think it just doesn’t compute a lot of times, what it feels like to be completely debt-free and how-
Bob Lotich: Yeah, I think when we paid off that first car-
Linda Lotich: … you feel lighter.
Our First Time Paying Something Off
Bob Lotich: … Yeah, when we paid off our first car, that was amazing. Do you remember that?
Linda Lotich: Yes.
Bob Lotich: We paid off your gold Mazda.
Linda Lotich: Yeah, it’s was a bronze Mazda 626.
Bob Lotich: Whatever color it was. Any way, when we first got that paid off, that was thrilling. I remember walking out of the bank. Didn’t we have the title? I think in that state they handed to you.
Linda Lotich: I don’t remember.
Bob Lotich: Any way, I just remember this is amazing. I own this car. They can’t take it from me. Any way, not that I ever had a car repossessed, but it just felt really, really good. Then, the house was just a whole other level.
Linda Lotich: Yeah.
Bob Lotich: It’s good.
Worthwhile Temporary Sacrifices
Linda Lotich: If you’re going to be reducing your expenses, making sacrifices-
Bob Lotich: It’s a worthwhile, temporary sacrifice to make.
Linda Lotich: … it’s so worthwhile. Don’t get discouraged by, oh man, I’m going to have to just not have Starbucks every single morning or four times a day or whatever. Don’t get caught up in that and look at the goal of what is it going to feel like with a paid off house and how much more money will I have? Honestly, you have so much more money.
Bob Lotich: Yeah, there’s more money to spend.
Linda Lotich: You can get 12 Starbucks a day.
Our Biggest Monthly Expense Being Mortgage-Free
Bob Lotich: Yeah, that’s one of my favorite things about having… Like I always said, before we had it paid off, it was just the idea of knowing that the biggest bill that I have each month is my electric bill. The biggest monthly expenditure. Now, it’s definitely groceries, but you get the point. It’s just really nice knowing that I could go get a job at Starbucks and provide enough income for our family because we have the mortgage paid off.
Linda Lotich: Was it just the two of us at that time?
Bob Lotich: I don’t know.
Linda Lotich: I can’t remember if Alden was around.
Bob Lotich: I don’t either. All right.
Linda Lotich: Doesn’t matter. Yeah, once Alden came around, the grocery bill went from… it pretty much doubled once Alden started eating. No joke, that kid can eat.
All right, now for the last thing that helped us pay of four mortgage in 3 years.
6. Starting A Business
Bob Lotich: The last one on our list for us was starting a business. I used to have a mentor who he told me that the fastest way to build wealth, or to increase your earning potential, is to start a business.
I always thought, “Hmm. Well, there’s some people who have jobs who make really good money.” I think there’s some truth to that, but once I became a business owner, I quickly realized that it’s a whole different ballgame because, as a business owner, I’ve had years where our revenue’s doubled from one year to the next.
As an employee, my best year as an employee, if I got a promotion or something, it might have been a 15%, maybe 20% increase in earnings and most years were maybe just a 3% to 5% raise, if that. It’s just a very different thing, in terms of earning potential, when you’re running your own business.
Starting A Business Isn’t For Everyone
Bob Lotich: Now, obviously there’s plenty of risks involved.
Linda Lotich: Yeah. This isn’t for everybody.
Bob Lotich: Yeah, it’s absolutely not for everybody. There are some people that shouldn’t be doing this. I happen to be somebody who’s wired for it.
Linda Lotich: Find out your Enneagram type and then decide if you should do this.
Starting A Business Speeds Up The Process
Bob Lotich: There you go. But the point is is that there’s no doubt that that helped us speed up the process so we could get our house paid off and do it in three years.
Linda Lotich: Yeah, no joke.
Bob Lotich: The business was a big part of that, just because our earning potential was so much different than my old job. I have no doubt we would’ve paid off our house early in my old job, but it was definitely amplified by the business. There’s definitely some benefit to it if you go that route.
Linda Lotich: And not to mention, you had control of the finances of the businesses. You know what I mean?
Bob Lotich: Mm-hmm (affirmative).
Linda Lotich: It’s not just crazy business expenses and money just flying out the window on stuff that’s not completely necessary, but other people might think that it’s necessary. It just makes a lot of sense. You just have a lot more control.
Have You Paid Off Your House? Do You Want To?
Bob Lotich: If you’ve paid off your house, or if you want to pay off your house early, let us know in the comments or something. We’ll cheer you on. We’ll give you a big hurrah.
Linda Lotich: We’ll pray for you.
Bob Lotich: Yeah, and we’ll just pray with you that God moves you through that process so much faster than you can imagine. We made a plan. We did our part and we started down that path and we just watched God come in and just move things so much faster than we could’ve thought.
Linda Lotich: Yeah, it was amazing.
Bob Lotich: I knew it was going to take this many years and God just did something completely different. So, just pray that He does that for you as well. Any way, that’s all. Be blessed, be a blessing, and we’ll see you next time.
My goal is to pay our house off in 5 years or less! We recently paid off $224k of consumer debt in 22 months. God has been most gracious as we have learned to steward the gifts that He has given us! Please keep us in your prayers on this next leg of the journey. Thank you.
Tent Depot says
Nice post! Thanks for sharing with us.
Ridzi Arora says
Great post. I appreciate your Hard Work.
Nancy McGinnis says
Thank you Bob and Linda. Wonderful advice. Appreciate your emails. God bless you always.
Good post! I agree with you, paying off your house feels life-changing. We were able to do it by putting down 30%, and then making our mortgage into a 15 year instead of 30 year and then paying an extra hundred dollars every month. So our mortgage was paid off in 12 years. We also started her own business, that gives you so many great ways to have write offs. And like you said when you have a good year you make a lot more. Thanks for your ministry.