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 $850,241 (up $6,189 in the last 30-days). The traditional spring-summer spike in real estate has been great for property values, but the reality is whether or not it is up or down, it really doesn't mean much to us since we have no intention of selling our home. 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!
$260,112 (down $1,972 from our April post)
Percentage Owed:
30.5% (down .6% from our April post)
Home Equity:
$590,129 (up a whopping $10,702 from our April post)
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 9 years and 1 months (109 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 9 years and 11 months (119 months) left on our mortgage. Nevertheless, I would like to have it paid off in roughly 8-9 years. If we accomplish that, I plan to use the money we use to pay our mortgage and 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 9 years and 1 months (109 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 9 years and 11 months (119 months) left on our mortgage. Nevertheless, I would like to have it paid off in roughly 8-9 years. If we accomplish that, I plan to use the money we use to pay our mortgage and 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 6-8 years, we may consider using some of the 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.
AFFJ -
ReplyDeleteEven though I know the balance will be lower and the value may modestly change, I still love seeing the update and article. Every month, things get better : ) Congrats.
-Lanny
Thanks Lanny. This may change later this year or early next year due to life circumstances but for now it is certainly nice to see our equity drop at almost double our interest payment. 👍🏼 AFFJ
DeleteLove the update. Real estate could so supplement future income if used. Depending on what your plans are once your retired.
ReplyDeleteCheers
Dividend Pursuit
Thanks. Completely agree. My wife and I have thought about renting out our home in retirement and use some of the money towards a smaller home or condo. Whether we do that or not, it’s certainly feels great knowing the option does exist.
DeleteAFFJ