Tuesday, December 29, 2015

Mortgage Balance (UPDATE) - Dec 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: $765,030 (up $796 in the last 30-days). 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 (Dec.28):
$313,623 (down $1,844 from our last post)

Percentage Owed:
40.9 41.2 (down from 41.2% from our last post)

Home Equity:
$451,407 (up $2,911 from $448,496 on our last post)

At this point, I'm not too sure what to make of the housing market and the direction is it headed.  With the recent rate hike by the Feds this past month, future mortgage rates will surely be impacted.  With that said, I am certainly glad we have a fixed rate mortgage.  I can sleep much easier at night knowing that regardless of what the Feds do, whether they decide to keep it the same or continue raising rates, my mortgage payment will not be affected.    

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 11 years and 9 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 12  years  - 6 months (152 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. Nice progress and a good plan AFFJ. We are preparing to put our house on the market at the moment. I've come to realize that we bought in a bedroom community with little employment base. We rode out the recession and collapse in housing prices, but with job changes coming up this year.....we are looking to sell and move on. Hopefully, I've learned from this mistake!
    Have a Happy New Years guys!

    1. Thanks Bryan. Good luck selling your home when you put it on the market. Hope 2016 brings you and your family good health and prosperity! AFFJ

  2. I love the progress updates. I think it's smart to continue investing your money where you can earn more than 2.875% which is probably lower than inflation. I'm holding a 6-year ARM currently so will be watching rates closely. I think it will be a slow climb back up but we'll see.

    Keep up the good work and Happy New Year!
    Brent @ AAI

    1. Thanks for the feedback. I know in the long run its a better choice to invest the extra capital rather pay down the low APR mortgage but I must admit we made a few stock picks this year that would have been better spent on the mortgage. :)

      Cheers to a better year of investing in 2016! AFFJ

  3. What a great rate! You were very smart to go for a 15-year fixed rate mortgage at 2.875%. You should be able to achieve your goal of paying off your mortgage by your retirement date, no matter what the FED does!

    Congratulations and keep up the good work!

    Happy New Year,
    FerdiS, DivGro

    1. Thanks for stopping by and the words of encouragement FerdiS. We are certainly glad to have locked in such a historically low rate. :)

      Happy New Year to you and yours. May you be blessed with a healthy and prosperous 2016! AFFJ

  4. This is a great breakdown of how a mortgage fits in with a family's life, but my only concern is that a mortgage is like a life sentence of debt. I have not bought a property yet, but I am trying to save up to buy something in cash. This might seem crazy as I am wasting money on rent, but I am just too scared of a mortgage...

    Naomi Cruz @ 4 Pillars

    1. I can understand why you think that and can't say I disagree. That is actually one of the main reasons we continued to refinance to shorten the length of our mortgage term. Even though we now have a 15-yr mortgage, my wife and I have discussed throwing more toward the mortgage each month but decided that given our super low interest rate that our money would be better served invested in the market.

      As a Dave Ramsey listener, and someone who does not really like debt, I can appreciate your goal to pay cash for your home. If home prices in California were not so high, we definitely would have considered doing the same. :)

      Regards, AFFJ