Debt Free

I have had some money building up and didn’t want to invest it in stocks given the upcoming downfall of civilization (and that the stock market had done pretty well already and might be due for some turbulence). With less than $20,000 left to pay on my mortgage, I thought I could maybe pay it off instead of dragging it out until August 2014. I called Bank of America on Tuesday to find out what I needed to do. They said I could do it that day over the phone! I said I couldn’t quite do that because the money wasn’t in my checking account (also Bank of America) yet. They said they could mail me a pay off statement and I could mail in certified funds, but I figured I would just sell some mutual funds and put the money in the checking account and call them back when it cleared.

So the funds were available today. I called up ready to pay off my house. The lady I got this time said I couldn’t do it over the phone and I would have to mail in certified funds which meant getting a certified check from my bank (which seemed crazy since they would know good and well whether my personal check was good or not). I asked to speak to someone else. She asked if there was anyone in particular I wanted to talk to, and I said no, not really, just someone else. She put me on hold for 10 minutes. She came back and said her supervisor was on the phone with someone else and would I continue to wait? I said I didn’t need to speak to her supervisor, but she said that when you ask to speak to someone else, the only person you can talk to is the supervisor (so I’m not sure why she acted like I had a choice earlier). I waited. The supervisor came on eventually and said that I couldn’t do a payoff over the phone, but I could do it at a bank branch. Well, that is a little more helpful since I was going to have to go to a branch to get a certified check anyway. And there is a branch across the street from where I work (in fact, the tallest branch in the Southeast). So I go over there.

At the branch there was no line at all and when I told the teller what I wanted to do, he said “This is a great day!” And he’s kind of right. He pulled up my account on his screen and said he would need to find out the payoff amount instead of the current balance, and then could transfer the funds, and if it wasn’t enough he could transfer more funds later. I said why don’t you just transfer a couple of hundred dollars extra and they will just refund what they don’t need? He said that wasn’t the way to do it. Then he gets on the phone and calls the same number I did, goes through the same automatic menus I did, and I think wound up getting a payoff number, which still wasn’t quite correct he said because there could be title registration and other fees tacked on as part of closing the loan.

My next problem was that I have some kind of snazzy premium checking account because I have my mortgage with Bank of America and now the mortgage would be eliminated. He said I needed to talk to one of the bank managers about a “relationship review” to get the right type of account for me. That term kind of made me laugh, going to the bank to get a relationship review. He recommended getting an “Enhanced” account which only required that I get a Bank of America credit card and use it every month. He pointed out it has a really good cash back program for 3 cents back on gas (with $3 a gallon gas, that’s like getting 9 cents off per gallon) and 2 cents back on grocery purchases. He set it up and apparently the money was on its way.

Next I waited just a few more minutes to talk to the manager. She tried talking me into the Enhanced account as well along with a credit card. I’m not really sure there is any advantage whatsoever to the Enhanced account except that I don’t get charged to see a teller, which I hardly ever do anyway. But the cash back appealed to me, and it isn’t just for the first year or this quarter, it is all the time. So I got that. And now the bank was happy that I would still have some way of borrowing money from them. I think it’s funny that they kind of made me trade a credit card for my mortgage.

I told a couple of friends at work that I had paid off my mortgage. They said what are you going to do about all the additional taxes you’ll have to pay? I’m saving $1,000 a month, so I’m not really that worried about a hundred dollars or so in tax savings. You have to pay the interest to get part of it back by making it a deduction. Better not to pay the interest in the first place. However, I did go ahead and substantially increase the amount I am contributing to my deferred compensation plan, and may wind up doing a 401k as well since I am now maxing out the deferred comp as well as my Roth IRA (not sure why there are limits if you can get around them by doing different plans, but those are the rules).