Monday, April 13, 2015

Mortgage Balance (Udpate) - April 2015

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: $779,828 (up $1,021 from our March post). It appears that home prices have steadily increased every month this year. I spoke to a local realtor this past weekend (at an open house in our community) and he said it's because there is not much inventory out there.  With many buyers trying to get into a home before interest rates rise, this has created somewhat of a warm/hot market in the Orange County home market. In fact, our next door neighbor just listed her house and it sold in less than a month with multiple offers with an asking price of $795K.  Her house is a slightly larger model than ours so I think that the Zillow Zestimate one our home is fairly accurate.

As nice as it is to see our home values rise, it really doesn't mean much to our family as we have no intentions to sell or otherwise move.  We are very lucky to be able to say that we love were we are and couldn't see ourselves living and/or raising our family any other place. :)
Mortgage Balance (April):
$329,914 (down from $331,670 in March)
Percentage Owed:
42.3% (down from 42.5% in March)
Home Equity:
$449,914 (up from $447,137 in March)

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. :) 

The truth is that as long as my mortgage balance continues to go down consistently each month, I am happy. Nevertheless, our journey is currently laid out where if all we do is make our exact mortgage payment each month, the mortgage will be paid off a few months after my planned retirement date.  

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 12 years and 4 months 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 13  years  - 1 months (157 months) 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:


  1. Love to see the mortgage balance and the percentage owed go down! Real estate are crazy high in my area, we were looking for houses lately but the prices are just too steep. I can wait but I am not sure if the wifey can... we'll see.

    Thanks for sharing and take care!

    1. Learn from us, I would say that if you cannot afford the house you want you should wait until you can. The smaller your mortgage the more power you have to invest, the bigger the mortgage the more it drains that power. Either wait until you can afford the house you want or buy a house you can afford (or preferably less) even if it means a smaller house. After all, you can always trade up later once you have the money. :) AFFJ

  2. Mortgage amount going down is always a good thing. :)

    1. Yes, Agreed Tawcan...I love watch the balance drop each month (almost as much as I love watch those dividend payments come in!) :)


  3. AFFJ,
    It looks like you have built a lot of equity here. I know you have no intentions of moving but you will certainly be sitting on a 1 Million dollar property if prices of homes continue to trend upwards. Congratulations on your progress. I hope to join you as a home owner some day.

    1. Thanks. I was talking to someone else recently about just that. Psychologically, it would be kind of cool to say we own a million dollar house. But then again, that also means we would owe property taxes on a million dollar house as bueno! haha

      Wish you the best...keep saving and investing and you will be a fellow homeowner before you know it. :) AFFJ

  4. Wow, that is really great to have 2.875% locked in for 15 years. Every generation has a different particular financial "gift" handed to them, such as low equity valuations or low interest rates. It's good to see you taking advantage of the interest rate situation.

    1. Thanks for the kinds words S.B. We are certainly blessed to have been in the position to take advantage of the low interest rate environment. We understand that in the long run, since our mortgage will be wiped quicker with the 15yr loan, we'll be in a great position come retirement!

      Cheers to this financial "gift" for our current generation. :) AFFJ

  5. Great blog on Mortgages. I have seen a lot of Zillow listings in my day and your blog really resonated with me. Home Equity is an interesting scenario and its relationship with net worth is tricky to say the least.