Friday, October 2, 2015

Mortgage Balance (UPDATE) - Oct 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: $781,676 (down $2,968 since our September post). If you follow us, the reality is that whether our home prices rise or fall, 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 (Oct. 1):
$319,142 (down $1,831 from $320,973 from last month)

Percentage Owed:
40.8% (down 0.1% from 40.9% from last month)

Home Equity:
$462,534(down $1,137 from $463,671 from last month)

With the threat of the Feds raising interest rates, our net worth has definitely taken a hit these past few months.  Until this past month, our home seemed to be the only shining star. Home prices had been on the rise lately due to the generally hot spring and summer months.  Unfortunately, things seems to be cooling down now that we are entering the winter months when real estate transactions typically cool down. It wasn't too severe this past month, but we did experience the first decline in home value in several months. As a result, out home equity fell this past month (down $1,137) even though our loan balance continues to fall (down $1,831) due to our wonderful 15-year fixed rate mortgage. 

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 11 years and 11 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 12  years  - 8 months (152 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. It's fab that American mortgages can typically be fixed for such a long period of time. Here in the UK, we can only fix for up to 5 years as far as I've seen. We're in the same position as you though - we have a really low rate right now (1.99%) so we're investing what we can, and in about 10-12 years, our investments should equal the remaining mortgage balance.

    Keep up the good work, and I hope you can catch up those 9 months.


    1. Wow, I did not know that 15 and 30 year fix is rare in other countries. Makes us feel even more blessed to have had the opportunity to lock in such a low rate for an extended period of time. Especially considering the fact that rates are likely to go up in the near future.

      Thanks for stopping by and sharing your thoughts and current progress. Best wishes. AFFJ

  2. You guys are making great progress, but I'm sure 12 years seems like an eternity. Keep at it, you're doing great. Our interest rate is 3.75%, but last year we made extra payments......feeling that global stock and bond markets were over priced. For the past 9 or 10 months we've been stockpiling cash in the hopes of better opportunities to come. I'm a really poor market timer, but sometimes it's fun to try :) Have a great weekend!

    1. You are right on with that hunch Income Surfer. I realize that my plan is to retire in 12 years but would certainly love to pay off the mortgage a few years earlier and use the extra cash to build our retirement nest egg.

      Don't feel bad Bryan, none of us are great market timers, if we were, we would be considered professionals and not amateurs. :) Just keep spending less than you earn and invest the surplus cash in what is the best value at the moment. You should do just fine in the long run. :)

      Best wishes and continued success! AFFJ