Friday, October 16, 2020

Mortgage Balance (UPDATE) - October 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 $913,004 ($26,598 in the last 30-days). 



Mortgage Balance (As of October 1st):
$201,362 (down $2,137 from our September post)

Percentage Owed:
22.0% (down .7% since our September post)

Home Equity
$711,642 (up $20,639 from our September 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 6 years and 8 months (80 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 7 years and 9 months (90 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.

3 comments:

  1. AFFJ -

    And the balance keeps trudging downward!

    -Lanny

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  2. Awesome stuff AFFJ! I take a similar approach for our equity. In our net worth calculations I keep the "value" as our purchase price although I do look at the Zillow estimate each month as well just to get somewhat of an idea of what it could be worth.

    I'm debating doing a refi considering how low interest rates are to save a little bit on monthly outgo even if it leads to an extended payoff date. In all reality this isn't our forever home and we've started browsing for some potential acreage purchases which is something my wife and I have both wanted.

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