When the Hubby and I bought the house in the summer of 2004, we took out a mortgage that was over $113K. Through aggressive paying down of the principal, we managed to shrink that amount to just under $41K by the end of February 2010, when we refinanced the mortgage to take advantage of a lower interest rate, a shorter pay-off term, and a lower monthly payment.
Even with the added closing costs on the new mortgage, we’re still just over $41K as of today. And after pretty much living on just one income while the other income goes to the mortgage for just over the past five years, I am glad that we did so… after seeing our current appraisal of our tiny lot and the modest home that’s on it.
Five years ago, it was appraised at $113,260. Today, it’s appraised at $89,760. I quote the 2010 appraisal letter from the Dallas Central Appraisal District: “The current year value reflects a decrease of 20.75% over a 5-year period.”
With the current appraisal, absolutely speaking the house is now officially half-way paid for, even though, based on the original mortgage, we have more than 63% equity on the home.
All of these numbers just give another motive to pay off this mortgage, before the house devalues even more. I have no idea when the housing market will stabilize in this uncertain “recovery” of the economy, but I would rather act on forces that *are* within my control: Macroeconomics ain’t. HOME economics are.
I’m just thankful that we don’t live in the part of the United States where the housing bubble got ridiculously large and, therefore, we were never at risk for going underwater, like areas in Nevada and Florida did, when the bubble burst.
Debt reduction — YO!