Saturday, January 22, 2022

Mortgage Balance (UPDATE) - December 2021


This is a late post but work has been kicking my butt and I haven't really had much time to do anything other than work, family, a little bit of exercise, and sleep. I know there is no set time that a post needs to go out but regardless of how busy I get, I usually always try to do a monthly temperature reading on our family's finances. Our monthly mortgage balance update is one part of that temperature reading. So here it is, our December mortgage udpate: 

If you have viewed our family's Net Worth Page, you probably already know that it does not include 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. 

It's official! According to Zillow, our home is currently worth $1,237,000 (up $28,300 in the last 30-days). Wow!! Yes, that is not a typo. In fact, our home value has gone up almost $330K since the beginning of the year. Not sure if everyone else is seeing the same but the housing market is out of control here in Southern California. 

As mentioned in our post back in May, a nearby home in our community sold for an unexpected $1.4 million dollars! We can't believe the home sold for as much as it did! More importantly, we can't believe that we now own a home that is worth over $1 million, and still climbing! And as of September of this year, our family is now sitting on a million dollars in home equity!!

Mortgage Balance (As of November 1st):
$167,219 (down $2,493 from our November post)

Percentage Owed:
13.5% (down 0.5% since our November post)

Home Equity
$1,069,356 (up $30,393 from our November 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 an awesome rate of 2.875%.  My goal is to retire within 5 years and 8 months (68 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 6 years and 2 months (74 months) left on our mortgage. Personally, I would like to have it paid off before I retire, and ideally a couple of years beforehand. 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. 

With my wife back to work, we are blessed that we now have more money to both invest and through towards the mortgage. We did some home improvement projects last year but this year has been all about building wealth and decreasing our mortgage payoff date. We are actively buying dividend stocks again and thereafter throwing unspent monies towards the mortgage balance. At a certain point, we may consider using some of the money from our dividend stocks account to wipe out the remaining mortgage balance. The dividend stocks account is roughly 60% of our mortgage balance so there isn't enough just yet. But the idea is to build the dividend stocks account while simultaneously decreasing the mortgage balance until both numbers are equal. At that point, whether we decide to do it or not, the option would exist to wipe out the mortgage using the dividend stocks account. 

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