Tuesday, October 25, 2016

Mortgage Balance (UPDATE) - OCT 2016

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: $835,714 (up $13,222 in the last 30-days).  Since our post in JUNE, we have seen our home value grow a total of $41,064 (from $794,650 back in June). I think it is safe to say that real estate in Orange County, CA has officially recovered. :)

It's fun to calculate and certainly makes you feel a little bit more wealthy but, 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 September 1st):
$296,825 (down $1,884 from our post last month)

Percentage Owed:
35.5% (down 0.7% from our post last month)

Home Equity:
$538,889 (up $13,321 from our post last month)
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 10 years and 8 months (128 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 11  years and 6 months (138 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 6-9 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. Man that is awesome!!! You guys are crushing it! I love your fixed rate too.

    Completely apart from your situation and all of that equity, Zillow is so off sometimes, isn't it?? :) Every month I check ours, and sometimes I am baffled with how it comes up with these numbers. I also find the rent zestimate to be off as well, but enjoy looking at that too. Perhaps that's why they have them. Crazy to see in California that homes are so expensive compared to the rent! The rent should be closer to $8000 per month for the numbers to work. Craziness!

    1. Thanks PID. Not sure how many variables Zillow uses to calculate the Zestimate but totally agree that it is not 100% accurate. It's a nice gauge and fun to see but certainly would list a home based solely on Zillow. :)

      Rentals in many parts of California is close to impossible! Trying to achieve the 1% rule (rent at 1% of home value) is much easier in other parts of the country. We would like to add real estate to our family's income stream eventually but don't think it will happen in here in California unless we one day rent out our home and live elsewhere. ;)

      Thanks for stopping by and commenting. Best wishes on your personal journey my friend. AFFJ