Friday, January 17, 2020

Mortgage Balance (UPDATE) - January 2020


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 $872,521 (up $7,079 in the last 30-days). 



Mortgage Balance (As of January 1st):
$219,683 (down $1,988 from December post)

Percentage Owed:
25.1% (down .4% since our December post)

Home Equity
$652,838 (up $6,826 from our December 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 7 years and 5 months (89 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 8 years and 5 months (99 months) left on our mortgage. Nevertheless, I would like to have it paid off in roughly 5 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, 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.

4 comments:

  1. Congrats on another successful mortgage update. Here's why this post is inspiring. I'm about to close on a condo that is very significant. It's over 500k for the purchase price. Quite frankly, it seems overwhelming.

    In looking at your mortgage in comparison to the value of your home, it seems as if you've paid down your mortgage quite a bit, to where it now seems like it's in sight - just over $200k. My point is that even though the 500k is really high right now, over time, it will one day become under 400k, then under 300k and then so on.

    Keep doing what you're doing AFFJ and I hope that you reach your goal of paying off your mortgage on or before your retirement date - which coincidentally is my goal as well.

    Happy New Year and I look forward to following your progress in 2020.

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