An Updated Snapshot of our Household Debt
Here's a better breakdown of our debt than I typically report in our monthly net worth report. In the past 12 months our debt has improved significantly as we sold my wife' townhouse and focused the majority of our free cash flow on our variable debt pay down.
|1||5.6% 30yr fixed||House #1||$ 108,854||Aug-31|
|2||HELOC @ 3.25% var.||House #1||$ 21,500||Aug-23|
|3||IELOC @ 4.25% var.||House #2||$ 10,384||Jul-29|
|4||4.875% 30 yr fixed||House #4||$ 236,858||Jan-39|
When we decided to stretch a bit to buy our house (#4) in Dec 2008 we planned to focus during the short term on reducing our debt to a level closer to where we were before we bought our home. Given our current 1 income household and lack of visibility at my employer I continue to feel a strong desire to reduce our debt level to a more comfortable level than where it is today.
At this point I'd feel more comfortable if our debt totaled around $250k. That would still put us with debt totaling more than 2x our annual income and keep us with some leverage on our balance sheet. However, with long term debt at (tax deductible) rates of 4.8% & 5.6% we really don't want to pay off more of the debt than we need to to feel comfortable because I believe we can earn higher rates of return elsewhere.
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