On our Mortgage Freedom series today, we're going to interview someone who eliminated their mortgage on a single middle-class income in less than 8 years.
Jessi Fearon is a wife, mother to three little ones and during their nap time, she's a financial coach. Her inspiring story of complete debt freedom has been featured in The Huffington Post, Nerd Wallet and BuzzFeed. When Jessi's not crushing her debt and motivating others to do the same, she's singing Garth Brooks songs and spending time with her family.
Andy Hill: When did you buy your home?
Jessi Fearon: It was in May of 2011 and it was quite the foreclosure.
There were rats living in my house. I literally sat at the table signing the document looking next to my husband going, “What did you just convince me to do?! You expect me to move into this house that is destroyed and has rats living in it?!”
With rats and the fact that it was 2011, I'm assuming you got a good deal. Am I right?
We did. Thank God. Yes, it was a foreclosure.
And so even though the general economic recession was over in our area, it was still feeling the negative effects of that. We bought our house right at $89,000.
And I'm lucky enough to be married to a master craftsman. He's a professional remodeler. So I didn't have to pay for a lot of the labor that went into fixing my house including chasing off the rats because I wasn't doing that.
What kind of upgrades did you do to the house?
Well, we had to do all of the code upgrades because our home was built in 1979 so there was a lot of issues that had to be taken care of. We had to rip up all the flooring because it was installed incorrectly. Part of the reason that there were rats in the house is that apparently, the woman who lived here before was not the cleanest person ever.
There were a lot of things that had to be replaced especially the carpet. It was in our basement and there was mold everywhere. She had cats too. And if you've ever had cats you know what that smells like … so we had to fix all that.
So quite a bit of stuff went into fixing our house. Doing upgrades like granite countertops and the stack stone fireplace behind me (check out the video above); that's like that's the only thing that we paid labor on because my husband is not a mason.
And then throughout the ownership of our home, we've had to make upgrades to the windows because we had the single pane windows from 1979 which are terrible. We had to replace the roof because the roof was like 30 years old and leaking.
When did you decide you wanted to pay off your mortgage?
Well, it kind of happened after we paid off all of our consumer debt which was right in 2015 right before we had our third child. We had paid off just over $55,000 of consumer debt and so we were starting to build up our savings account.
I just kept looking at our mortgage and I was like, “You know we paid off more debt than this in two years. Why not just pay off the mortgage like this?”
It kind of didn't make sense because we're late to the retirement game. We broke the cardinal rule of finance and took out of my 401k years ago. You know you're not supposed to do that, right? We did that. You know we're paying for it now because we have to aggressively save for retirement.
But when we start looking at our net worth calculation, we realized that if we paid off our mortgage we could increase our net worth so much faster than just investing it. And then we could turn around and take our mortgage payment and invest it aggressively because we do live off of only my husband's income and so we don't have a whole bunch of disposable income to invest with.
How did you pay off $55,000 of debt on a single income?
Well, my husband will tell you that it was through a lot of meatless meals which my poor husband cannot stand. He was like, “Where's my meat?!” I was through a lot of bootstrapping and selling off things that we didn't need anymore. Also, picking up side jobs like walking dogs in our local neighborhood … Pick up dog poop for money.
But it was what I did so we could help pay off debt. We aggressively did that from there. And that included me giving up my really nice car that I had so we could pay cash for a more well loved used car.
How did the discussions go with your husband on the debt pay down process?
We started 2012 pregnant and ended it pregnant and that's what happens when you have Irish twins. So because of that, I was going through our budget. I was pregnant our second child trying to figure out, “Okay, what's money going to look like a once baby number two comes?”
And I realized that it was just getting tighter and tighter and tighter. My husband didn't grow up below the poverty line but he grew up in that like teetering position you know so for him it's always been a big deal to not struggle. And I realized that we were going to potentially be in that position so I brought it to his attention.
After that realization, we were both like, “Alright, we're done with it!” We cut up the credit cards right then and there and we made this plan to start aggressively attacking our debt until it was finally all gone. It was a very freeing and amazing feeling.
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What strategies did you use to pay off your mortgage?
Right at the beginning of 2017 (with $27,000 left to go on the principal) is when we got aggressive on trying to pay it off as fast as possible. Honestly, we applied every strategy that we used when it came to getting out of debt and building up our emergency fund.
We just supplied every additional penny that we had. We did the bare bones budget where everything was kind of bootstrapped and we took all the money we could from our budget threw it towards the mortgage … side jobs, side hustles and selling off stuff that we don't need.
And so we did all of that until we finally made it happen in January (2019). I was so excited.
How much were you making per month during this time?
It's just a little bit over $3,000 per month.
How did you celebrate this big day with your family?
We did a dance party with the whole family. Well, that's like our thing. We just do a big dance party.
My husband I had champagne I bought and a little sparkling grape juice for the kids. I let them have big fancy wine glasses because I don't want to break the really nice like crystal champagne flutes. They thought it was really fun.
That's how we celebrated paying off the house. We didn't do anything too crazy but we are taking three family vacations this year because we paid off the mortgage.
Besides vacations, what is your plan with the extra money now that you don't have a mortgage?
We are going to be investing as much as possible and of course, saving money because we do eventually plan to buy another piece of property with the intention of paying that mortgage off as fast as possible.
Eventually, my husband wants to build his own house from the ground up. That's a big goal of his but that's going to cause some working up towards. But that's the ultimate goal.
What advice would you give to someone looking to pay off their mortgage?
Make sure that you see your mortgage amount as debt. I moved out of my parent's house at 18 years old so I've been paying somebody, whether it's a landlord or a bank, a payment every month to live in a dwelling.
And so for so long I just was doing that habit of paying a payment every single month because I had to. But then the moment that I sat down and I saw our actual mortgage and I saw how much it was, I realized “Wait! We paid off more than that in two years. Why are we just making this small little minimum payment every month when we can actually pay it off more aggressively?”
Just look at your mortgage payment and see it as a debt. See it as the full number that it is and the weight that it actually carries. Then devise your plan of how are you going to attack it.
You know what extra money can you pull from your budget. You know you can do a side hustle and sell some stuff. Just go watch Tidying Up on Netflix and you'll be getting rid of everything that you practically own!