Wednesday, September 2, 2015

Mortgage Balance (UPDATE) - Sept 2015

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. 

According to Zillow, our home is currently worth: $784,644 (up $8,427 since our June post).  Although home prices have been relatively flat the past few months, overall, we've continued to see a gradual climb this year.  Will we see home prices back to what they were before the crash in 2009, probably not anytime soon but I do think we will eventually get back to those levels one day. For now, we are certainly glad to see steady increases which allows us to build some equity.

If you follow us, the reality is that whether our home prices rise or fall, it really doesn't mean much to our family as we have no intentions to sell or otherwise move.  We are very lucky to be able to say that we love were we are and couldn't see ourselves living and/or raising our family any other place. :)

Mortgage Balance (Sept. 1):
$320,973 (down $5,417 from $326,390 back in June)

Percentage Owed:
40.9% (down 1.1% from 42.0% back in June)

Home Equity:
$463,671 (up $13,844 from $449,827 back in June)

With the market corrections, our net worth has definitely taken a hit these past two months.  Our home seems to be the only shining star these past two months. With that said, I'm happy to report that all the arrows all seem to be moving in the write direction. Our mortgage balance is down $5,417 and our home value is up $8,427. Which means our home equity is up a total of $13,844 during the last two months. 

Even though we don't consider home equity as part of our net worth, since I am sort of a statistics nerd, I still like to look at the numbers and draw fancy comparisons. :)  

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 12 years and 0 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 12  years  - 9 months (153 months) left on our mortgage.  Nevertheless, I would like to have it paid off in another 10 years (or less). If we accomplish that, I plan to use the last few years to aggressively build our passive income to help supplement our retirement and defer tapping into the 457K as long as we can 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, maybe in 8-10 years, we may consider using 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.
Click on the link below to view our mortgage balance history:


  1. Wow, 2.875% on a 15 year fixed mortgage is awesome. With that kind of interest rate, I agree that there's no reason to put any extra money towards principal. You should be able to do much better investing that money.

    1. Thanks Christian Investor. Definitely feel blessed to have had the opportunity to refinance when we did. :) So far, through multiple avenues, we've managed to grow our investments by at least 2.875%. Let's hope it continues! :)

      Thanks for visiting. Regards, AFFJ

  2. I'll second what Christian Investor said: a 2.875% interest rate on a 15-year fixed mortgage is incredible! And here I thought the 3.5% on my 30-year fixed mortgage was pretty decent, ha! ;P

    I'm just like you when it comes to nerding out about stats. I love to track the changes in my home's estimated value, even though it ultimately doesn't really mean much in the context of my net worth. My property is up nearly $6000 since June according to zillow, so I'm pretty stoked, haha!

    Keep up the great work, seems like you're well on pace to achieve your goals!

    Best wishes
    ~ Alex

    1. Z2Z - We were really lucky to have re-financed when rates were below 3%. It's sometimes tempting to throw more money are the principal since we do still owe quite a bit, but we know investing our money elsewhere is the better option. Not only is 2.87% pretty easy to beat, investing our money keeps it more liquid than having it tied to the home. :)

      Great to hear you gained $6K since June! I know its just a paper gain but psychologically it still makes you feel richer. :)

      Thanks for stopping by and commenting. AFFJ

  3. It's good that you are taking note of how much your house is worth this early. You will never know when the need to sell it would arise, so it would be best to know its value. Speaking of which, that's a really cool fixed-rate mortgage that you have managed to secure. It sets you up well for life, with lesser financial pressure than what anyone would tend to expect in that circumstance.

    Naomi Walters @ Chicora