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Achieved Goal of no debt other than mortgage How I did it.

October 20th, 2007 at 03:24 am

I have been working on this goal since July 2006 long before I started this blog. If you read my background information you will know that a few years ago I refinanced my home and paid off all my credit cards and other obligations. Last July I bought a residential lot with an interest only loan for seventy thousand dollars. I hired a contractor to build me a house based on a set of plans I found last year on a house plans website. To finance the construction, I obtained a construction loan that paid off my residential lot loan and allowed me to start construction. To qualify for the construction loan, I agreed to let the bank place a lien on my current home with the stipulation that it be removed when I sell it. I know this was a gamble, but I have lived in a hot market since Katrina caused so many people to move around. I was able to sell my old home after a few months for close to my asking price.

The sale eliminated all my home and home equity debt while at the same time making a profit of fifty thousand dollars. In one swoop all my debt was gone and I had a good size cash cushion. I decided to put thirty thousand toward the new construction leaving me with a smaller cash cushion but also a smaller mortgage and monthly note.

A couple of weeks ago I moved into my new home and have converted the construction loan to a permanent mortgage. My first goal will be complete.