Tuesday, December 9, 2014

Mortgage Balance (Update) - December 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. 

According to Zillow, our home is currently worth: $784,294 (slightly up from $781,080 in November post). The housing market in our area has been steadily climbing this year but the gains have definitely subsided since reaching the summer highs. 

Mortgage Balance (November 2014):
$336,849 (down from $338,557 in November)
Percentage Owed:
42.95% (down from 43.34% in November)
Home Equity:
$447,445 (up from $442,522 in November)

Even though 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. :) 

With that said, our home equity did increase by almost $5K this past month (a total of: $4,923). For percentage owed,  the number slightly decreased, going from 43.34% to 42.95% during the past month.  For now, I think the housing market will remain steady...at least until the Feds decide to raise interest rates.  I have a feeling we may see a dip in home prices in 2015 when the Feds raise interest rates as expected.  

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 13 1/2 years so we are setting out to pay off our mortgage on or before my retirement date. Right in line with my retirement goal, we have a little less than 13 1/2 years left on our mortgage. Nevertheless, I would like to have it paid off in another 10 years (or less). If we accomplish that, I plan to use the last few years to 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 8-10 years, we may consider using 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.
Click on the link below to view our mortgage balance history:

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