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 $827,579 (down $4,527 in the last 30-days). Is the housing market seeing a cool down, or is there still a second push as those looking to buy a home before the next school year start going into escrow? Regardless, since we have no intention of selling our home, the fluctuations in the market means little to us. We mainly post these updates to see the remaining mortgage balance and keep us motivated to push forward to be debt free (including our mortgage) one day!
$283,508 (down $1,916 from our post last month)
Percentage Owed:
34.25% (down .05% from our post last month)
Home Equity:
$544,071 (down $2,304 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 1 months (121 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 10 years and 11 months (131 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.
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 1 months (121 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 10 years and 11 months (131 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:
You're right on track from what I can see. You can easily make up a few months of lost ground between now and when you want to retire. Granted, life loves to send speed bumps but give or take a few, you should be fine.
ReplyDeleteThanks. There is always room for improvement but we do like where we stand. Hopefully, as the retirement date nears, we can throw more at the principal to ensure the home is paid off concurrently with our target retirement. :)
DeleteRegards. AFFJ
Very nicely done, seems like a pretty solid strategy to get that debt paid down and then eventually retire when you can. All the best, I will be following your journey!
ReplyDeleteThank you. Slow and steady wins the race they say. Sometimes I do get a bit anxious though! haha
DeleteThanks for following along. We enjoy you blog as well. AFFJ
AFFJ -
ReplyDeleteAnother month down and another payment in. Any new timeline on when an extra payment may come into play?
-Lanny
Thanks Lanny. With the interest rate as low as it is, we aren't really putting much more than the standard mortgage payment. Every now and then I do sometimes round up my payment to the nearest $100.
DeleteWe are trying to build the dividend stock account right now with the thought that in about 5 years, we would possibly use the monthly dividend payment to pay towards the principal. AFFJ