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Mortgage-Free by 31: My Journey from Student to First-Time Homeowner

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The following article is a guest post by Sean Cooper who blogs about personal finance at Sean Cooper Writer.



When I bought my house a little over two years ago I was happy just to call myself a homeowner. It took me almost three years of house hunting buy a house. I purchased a beautifully-renovated three bedroom bungalow in Toronto east for $425,000. Not only was a first-time homebuyer, I took on the added responsibility of being a first-time landlord.

According to a poll by CIBC, the average homeowner won’t pay off their mortgage until right before retirement – age 58. When I bought my house, I started with a mortgage of $255,000 – that’s a lot of debt for one person  to handle! I knew I didn’t want six figures out debt hanging over my head until retirement. Right then and there I set the ambitious goal of being mortgage-free in four years – by age 31.

I recently wrote an article in the Globe and Mail, I’m on track to be mortgage-free by 31, about my stretch goal. Reaching mortgage freedom at such a young age isn’t easy – here are the sacrifices I’ve made to get to where I am today, and how you can follow in my footsteps.


Graduating Debt-Free From University

Graduating without a penny of student-debt helped me get ahead financially. The average student debt  after a four year degree is $37,000, according to the Canadian Federation of Students. I managed to avoid student debt by working hard and living frugally. Instead of living on campus, I stayed at home with my parents. I cycled and took transit, brown bagged my lunch, and purchased textbooks second hand. While my friends went on five-star vacations during spring break, I was busy studying and saving my money. School kept me plenty busy, but I still managed to hold down several part-time jobs and work full-time during the summer. I was able to pay for my tuition in cash without incurring a penny of debt. In fact, when I graduated I had already managed to save a down payment of $70,000.


Living Like a Student After Graduation

In only three short years I managed to save a down payment of $170,000. How did I manage to save such a sizable down payment? By landing a well-paying job straight out of university and continuing to live like a student after graduation. I didn’t buy a fancy car or go away on a cruise to the Bahamas to celebrate – instead I saved towards my goal of homeownership. I continued to cycle and take transit, pack my lunch and save my money. I contributed $5,000 to my tax-free savings account every year. To avoid the temptation to overspend, I paid myself first by setting by saving $250 from every pay cheque.


Becoming a First-Time Homeowner and Landlord

After three long years of house hunting, I finally purchased my dream home. While looking for a house, I became a regular viewer of HGTV. My favourite show was Income Property. I was inspired by Scott McGillivray who lived in the basement of his first house for nine years to get ahead financially. Living in Toronto, Canada’s second most expensive housing market, I knew it was going to be tough to pay off my mortgage anytime soon. Instead of living upstairs, I decided to live in the basement and rent out the upstairs. Renting the upstairs allowed me to bring in enough rent to cover the mortgage, utilities and put myself in a positive cash flow position.

To bring in extra money, I continued to work part-time and started working as a financial journalist. I started writing for a variety of financial blogs to earn some extra income and get my name out there. The extra money enabled me to make prepayments on my mortgage. My mortgage lender let me prepay up to 15 per cent of my mortgage each year. In my first two years as a homeowner, I managed to maximize my prepayments. This year I’m on track to maximizing them once again.


The Bottom Line

The journey towards mortgage-free hasn’t always been easy, but it’s been worth the sacrifices. By the end of 2015 my mortgage should be paid off and I’ll be able to slow down and decide what I want to do with the rest of my life. Reaching mortgage freedom comes down to goal-setting. If you’re ambitious and willing to put in the effort, there’s nothing stopping you from reaching mortgage freedom just like me.

Sean Cooper is a real estate and mortgage freelance writer and blogger.About the Author:

Sean Cooper is a financial journalist. He is a first-time homebuyer and landlord passionate about real estate. He was inspired by Income Property’s Scott McGillivray to live in the basement and rent out the upstairs of his house. Follow him on Twitter @SeanCooperWrite. You can request his services and read his blog on his personal website.