Saturday, March 21, 2020

Mortgage Balance (UPDATE) March 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 $873,742 (down $1,612 in the last 30-days). 




Mortgage Balance (As of March 1st):
$215,692 (down $1,998 from February post)

Percentage Owed:
24.6% (down .2% since our February post)

Home Equity
$658,050 (up $1,232 from our February 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 3 months (87 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 4 months (97 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.

12 comments:

  1. Very nice interest rate on your mortgage. My wife and I are in the process of getting a construction mortgage right now too and the current financial climate is shaping up well for us to build.

    Scott

    ReplyDelete
    Replies
    1. Interest rates are almost back to where it was when our family secured our current 15yr mortgage. Hope you guys are able to secure an equally attractive rate on your construction mortgage.

      Best wishes and success. AFFJ

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  2. AFFJ -

    Nice job, even though the value went down, you still were able to show a net positive.

    -Lanny

    ReplyDelete
    Replies
    1. It certainly helps when the bulk of your payment goes to the principal. ;) We are blessed to have the APR that we do. The balance drops a fair amount with each and every payment.

      Lanny - Appreciate the ongoing support and follow. AFFJ

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  3. Good job in paying down your mortgage. I recently decided on paying down my mortgage. It's a long road, but a worthwhile one in my opinion.

    ReplyDelete
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    1. The decision to pay down the mortgage is different for everyone. Depends on your rate, risk tolerance, timeline, etc. We do want to have our mortgage paid off before I retire in roughly 7 years so as long as we make enough of a payment to do that, I'm a happy camper. :)

      Thanks for commenting. AFFJ

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