Comment on Share with those less fortunate
Asifall@lemmy.world 8 months agoAre you not counting your house as an asset when calculating net worth?
Net worth literally means assets minus liabilities.
If you have a mortgage that isn’t at least 50% paid off you probably have a negative net worth, while a renter without other debts will have a positive worth.
The accumulation of equity compared to the complete loss of value to renting is a different discussion.
This discrepancy, btw, is why people accuse Trump of being a fake billionaire, because his liabilities exceed his assets, thus his begging for cash from the gullibles.
TF you taking about? You use the whole price of the asset for net worth. If your mortgage is $1 less than what you would get from selling it that’s +$1 to your net worth.
If you’re house sells for 500k after expenses and you owe 300k you don’t just get the 200k and still owe 300k.
My house is worth ~1.8mm and I owe ~140k, that’s +1.66mm to my net worth. Even if I owed 1mm, I’d have +800k.
Unless the house is worth less than you owe, having a mortgage on your house isn’t a negative to your net worth.
They have a new mortgage. They haven’t built up equity yet, plus who knows what their damage is on other loans.
This isn’t complicated. Their asset (the home) atm is still roughly equal to their liability (the mortgage).
I’m sure they’ll be out of a negative net worth before they think but we also don’t know what their damage is on interest rates, student loans, car loans, medical debt, etc.
I wasn’t taking about that guy, he said he’s underwater.
I was responding to your bullshit about needing to pay off 50%+ for your home to be a net positive to your net worth.
“New mortgage” doesn’t matter, as soon as you make the down payment, before you make a single mortgage payment, as long as the house hasn’t decreased in value you have equity and that adds to your net worth.
As long as you can sell and have $1 left over after leins and expenses, it adds to your net worth. It’s the value of the home less any leins, not your equity less any leins when determining what it means to your net worth.
June@lemm.ee 8 months ago
I’m underwater right now since interest rates jumped right after I bought. So no.
PM_ME_FEET_PICS@sh.itjust.works 8 months ago
You went with a variable rate? Are you insane? At least rates will drop in the next 3 years.
June@lemm.ee 8 months ago
Nooooo. I’m locked in.
It’s that interest rates went up and prices fell as a result. My area just leveled off and hasn’t grown since I bought.
Asifall@lemmy.world 8 months ago
Why would you expect that to take 30 years to get back to $0 though?