Thursday, August 7, 2014

Mortgage Balance (Update) - August 2014

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: $798,131 (up from $788,317 in July). The housing market in our area has been steadily climbing in the last few months. We had a roughly $10K gain since last month. In July, we saw our housing value increase by roughly $20K. 

It's nice to see home values go up but the reality is it is simply a paper gain until we actually go to sell our home. Meanwhile, the higher value translates to more property taxes. 

Mortgage Balance (August 2014):
$343,687.93 (down from $345,379.74 in July)
Percentage Owed:
43.06% (down from 43.81% in July)
Home Equity:
$454,443 (up from $442,938 in July)

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 13 1/2 years so we are setting out to pay off our mortgage on or before my retirement date. 

Although we don't consider home equity as part of our net worth, since I am sort of a statistics nerd, I still like to look at the numbers and draw fancy comparisons. :) This last month was another decent month in that our home equity grew another $11,505 As for percentage owed, the number continues to decrease ever so slightly. The percentage dropped a measly .75% this past month. 

But .75 of $345K is still a pretty decent amount so I'm still OK with that. The reality is that we are not putting any extra money towards the principal given our low interest rate. We feel that we could make our money grow faster by investing it and while keeping the money more liquid.
Click on the link below to view our mortgage balance history:

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