Wednesday, March 16, 2016

Mortgage Balance (UPDATE) - MAR 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: $770,923 (up $5,046 in the last 30-days). 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 (As of February 6th):
$309,921 (down $1,823 from our last post)

Percentage Owed:
40.2% (down from .5% from our last post)

Home Equity:
$461,002 (up $7,345 from our last post)

At this point, I'm not too sure what to make of the housing market and the direction is it headed.  With the recent rate hike by the Feds in January, and likely more later this year, the future mortgage rates will surely be impacted. With that said, I am certainly glad we have a fixed rate mortgage.  I can sleep much easier at night knowing that regardless of what the Feds do, whether they decide to keep it the same or continue raising rates, my mortgage payment will not be affected.    

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 4 months (136 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 12  years  - 2 months (146 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. You've made major progress on paying off your home already. I personally don't own a home yet but that's largely due to the fact that the idea of having such a large loan scares the bejesus out of me. I'm sure you get used to it overtime and it helps if, like you, you're not underwater on the loan but ... whew! That's a lot of money! At least you've only got your loan for half the time that lots of others do when you're on a 15 year rather than a 30 year! Keep at it!

    -Dividend Reaper

    1. DR - our loan balance still doesn't sit well with me because our mortgage eats up more of our income stream than I would prefer. But yes, knowing it's only for 15yrs (or less), it surely helps to ease the mind a bit. :)

      Thanks for stopping by and commenting. AFFJ

  2. AFFJ -- a 15 year commitment at a fixed, low rate of 2.875% is a great place to be in. In my opinion, you're doing the right thing... paying a mortgage beats paying rent and you get a tax benefit to boot. And over the long term, property seems to at least keep track with inflation.

    Take care!
    FerdiS, DivGro

    1. Thanks for the validation FerdiS. Certainly feel blessed with our historically low interest rate. Although there are tax benefits, I have to say I would prefer to have no mortgage. :) Our property has increase in value since we bought it but for a short time period after we bought, it was below our purchase price.

      Thanks for stopping by. AFFJ