As stated previously, my goal is to pay off my mortgage before my kids start college.

My twins are 5 months old at time of this post in September of 2008.

College for them begins in September of 2027 I think.

Our mortgage was originated in Dec of 2005, then refinanced in April of 2006 to get both loans (1st and 2nd mortgage) on fixed rate payment plans.

2nd mortgage is ~50k borrowed at 7.5%
1st mortgage is ~284k borrowed at 5.75%.

I need to pay both off more than 10 years early for this plan to work.

We currently round the 2nd mortgage payment up every billing cycle- meaning if we owe $385.85 we round payment up to $400. This cuts SIX YEARS off the payment according to the spreadsheet I ran.

In 2 years when my truck is paid off, the $700 truck payment goes to second mortgage. This will pay the second mortgage off in about 5 years from when I start the extra payments.

The $1100 extra ($400 2nd mortgage payment and $700 car payment) which will be available in 2015 goes to funding 3 goals:

1) Kids private school education- we don't like the public schools where we live, we estimate needing $400/month for both kids private schooling for elementary school.

2) New car fund for me. Probably $500/month going to this account

3) $200/month going to mortgage independance fund.

Mortgage independance fund is PRPFX- a mutual fund which should have about a 6% annual return and be relatively consistent in most market conditions.

My plan is to get this fund large enough to pay off the mortgage- might take 5 years, might take 10 or 15. Once this fund has enough money to pay down the mortgage, I will actually send the $200/month directly to the mortgage.

The risk before mortgage is paid off is liquidity- if I sent payment to the mortgage, I could not access the money. So by using an investment with intention to pay off the mortgage, when kids are 18 I either have a paid off house, a large taxable investment account, or both.