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 $1,425,400 (up $47,171 in the last 30-days). Not sure if everyone else is seeing the same but the housing market is still out of control here in Southern California.
AS OF MAY 1, 2022:
$156,809 (down $2,593 from last month)
Percentage Owed:
11.0% (down .7%)
Home Equity:
$1,268,591 (up $75,293)
11.0% (down .7%)
Home Equity:
$1,268,591 (up $75,293)
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 4 months (64 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 5 years and 10 months (70 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.
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 4 months (64 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 5 years and 10 months (70 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 65% 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.
Definitely good luck on your goals to payoff the mortgage. I'm on a similar path, although I go back and forth if I really should payoff the mortgage.
ReplyDeleteHowever, I think having a retirement date helps a person make the decision whether to payoff the mortgage early - so it all depends on one's goals. I look forward to following your progress along the way.
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