Saturday, December 16, 2017

Mortgage Balance (UPDATE) - DEC 2017

If you have viewed our family's Net Worth Page, you probably already know that it does not include the equity in our home.  Although, we do realize that it is technically part of our overall net worth, we decided that since our home equity is not an asset that we can count on for income (unless we sell and buy something cheaper) we would exclude it from our net worth calculation.

For the purpose of this blog, we are more interested in documenting our loan balance rather than our home equity.  With that said, we will use the current Zillow value as our estimated home value and use it to figure out the percentage we owe on our home. For those interested, we will include the amount of our home equity, but know that we are less concerned with the equity since we have no plans to cash out or otherwise sell our home. Our main goal is to pay off our home on or before my retirement date. 


HOME VALUE:
According to Zillow, our home is currently worth $829,956 (down $11,784 in the last 30-days). Up or down, it really doesn't mean much to us since we have no intention of selling our home.  We mainly post these updates to see the remaining mortgage balance and keep us motivated to push forward to be debt free (including our mortgage) one day!




Mortgage Balance (As of Dec 1st):
$269,925 (down $1,949 from our Nov post)

Percentage Owed:
32.5% (up .2% from our June post)

Home Equity:
$560,031 (down $9,179 from our June)
   
Mortgage Background:
For those that have not read the Preface on our home equity, we currently hold a 15-year fixed rate mortgage at the incredibly low rate of 2.875%.  My goal is to retire within 9 years and 6 months (114 months) so we are setting out to pay off our mortgage on or before my retirement date. Right now we are a few months behind the target retirement date. Currently, we have approximately 10  years and 4 months (124 months) left on our mortgage.  Nevertheless, I would like to have it paid off in 10 years or less. If we accomplish that, I plan to use the money we use to pay our mortgage and aggressively build our passive income to help supplement our retirement and defer tapping into the 457K as long as we can so it can continue to grow. 

Right now we are not putting any extra money towards the principal given our low 2.875% interest rate. We feel that we could make our money grow faster by investing it and while keeping the money more liquid. At a certain point, maybe in 6-9 years, we may consider using some of the money from our investment accounts to wipe out the remaining mortgage balance.  Until then, we will continue to grow that money outside, rather than have it locked into our home.

3 comments:

  1. AFFJ -

    Always like the downward trajectory. Further, hard to make any extra payments with rates slooooowly, but surely, on the rise; esp. given the fed's recent 25bp rate hike this past week.

    -Lanny

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  2. I think it's important to track your net worth to get that gauge to see how you're doing. It's something that I might implement in the new year.

    Also, I really like the fact that you are on a 15 year fixed. Even if you didn't make the extra payments, in 15 years, you're mortgage will be paid off, just by making the minimum payments. If I can afford to, the next house I buy, which either will be late 2018 or early 2019, will be on a 15 year plan. My current house is on a 30 year fixed plan, and I know I can pay as if it's on a 15 year, but it never really works out that way.

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  3. AFFJ,
    That great when the trajectory is downward. Great concept of not calculating your home value onto your total net worth.
    I really like the low interest I am looking to refi this year on our multi family Home to take advantage of low rates on a 15 year mortage.


    Thanks for sharing
    Happy investing
    Dividend Pursuit

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