Friday, November 9, 2018

Mortgage Balance (UPDATE) - November 2018


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. 


HOME VALUE:
According to Zillow, our home is currently worth $855,033 (up $6,975 in the last 30-days). The traditional spring-summer spike in real estate continued to be great for property values. This year, the summer spike seemed to have lasted well into fall. 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!  



Mortgage Balance (As of November 1st):
$248,180 (down $2,000 from our October post)

Percentage Owed:
29.0% (down .4% from our October post)

Home Equity
$606,853 (up $7,155 from our October 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 8 years and 7 months (103 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 5 months (113 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 for as long as possible 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 5-7 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.

1 comment:

  1. Congrats on the additional mortgage pay down. We also prepay some of our mortgages. In our case, we focus on our higher rate rental investment mortgages, since our residence qualifies for the best rate. But I can also see the allure of paying off even a lower rate mortgage because the absence of a monthly payment means that much less you have to cover each month and also means simplicity.

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