Your Home Equity / Net Worth Ratio?

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Flashes1
Posts: 638
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Re: Your Home Equity / Net Worth Ratio?

Postby Flashes1 » Thu Mar 14, 2013 1:14 pm

1. 25%

2. We've been paying about $1k extra month towards principle....mortgage will hopefully be paid off in 20 years when it's time for me to retire.

Zytos
Posts: 30
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Re: Your Home Equity / Net Worth Ratio?

Postby Zytos » Thu Mar 14, 2013 1:50 pm

1. 37% (Long Island, NY)
2. No. Probably around 24-25 years to go.

ks289
Posts: 406
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Re: Your Home Equity / Net Worth Ratio?

Postby ks289 » Thu Mar 14, 2013 2:24 pm

27% :?:

No :|

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ofcmetz
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Re: Your Home Equity / Net Worth Ratio?

Postby ofcmetz » Thu Mar 14, 2013 5:59 pm

1. 25%

2. No. Less than 12 years to go.
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Blister
Posts: 44
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Re: Your Home Equity / Net Worth Ratio?

Postby Blister » Thu Mar 14, 2013 7:35 pm

17%

yes

22%
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rr2
Posts: 978
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Re: Your Home Equity / Net Worth Ratio?

Postby rr2 » Thu Mar 14, 2013 7:45 pm

1. About 15%

2. No. Just refinanced last year to to 30 year fixed, but paying extra to be done in about 22 years.

kamo
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Re: Your Home Equity / Net Worth Ratio?

Postby kamo » Thu Mar 14, 2013 8:49 pm

1. 8.5%

2. No
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Dadarkar
Posts: 139
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Re: Your Home Equity / Net Worth Ratio?

Postby Dadarkar » Thu Mar 14, 2013 8:58 pm

1. 26%
2. yes
3. 30%

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jeffyscott
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Re: Your Home Equity / Net Worth Ratio?

Postby jeffyscott » Thu Mar 14, 2013 9:12 pm

1. about 17%

2. Yes

3. about 40% (paid off about 9 years ago, home value is about the same now as it was then)
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harikaried
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Re: Your Home Equity / Net Worth Ratio?

Postby harikaried » Fri Mar 15, 2013 3:48 am

I'm somewhat confused with what this is trying to get at or learn. Is this looking at diversification of one's net worth, so one doesn't put too much of one's net worth into a single asset/home equity?

Grt2bOutdoors
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Re: Your Home Equity / Net Worth Ratio?

Postby Grt2bOutdoors » Fri Mar 15, 2013 8:41 am

harikaried wrote:I'm somewhat confused with what this is trying to get at or learn. Is this looking at diversification of one's net worth, so one doesn't put too much of one's net worth into a single asset/home equity?


I think the OP is trying to figure out just how much Bogleheads are worth. :confused
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acegolfer
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Re: Your Home Equity / Net Worth Ratio?

Postby acegolfer » Fri Mar 15, 2013 9:42 am

harikaried wrote:I'm somewhat confused with what this is trying to get at or learn. Is this looking at diversification of one's net worth, so one doesn't put too much of one's net worth into a single asset/home equity?


Right on.

There are many threads discussing whether to pay off mortgage or not. Most of the advice focused on the opportunity cost argument. But I believe asset allocation is something one should also consider. Wanted to get some empirical data from fellow bogleheads.

wesleymouch
Posts: 237
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Re: Your Home Equity / Net Worth Ratio?

Postby wesleymouch » Fri Mar 15, 2013 9:44 am

8% for us. A house is just a big consumer good which you "rent" from the government via property taxes.

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G12
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Re: Your Home Equity / Net Worth Ratio?

Postby G12 » Fri Mar 15, 2013 10:42 am

1) 11%
2) Yes, although it was a home equity line at the time
3) too similar to make a difference

harikaried
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Re: Your Home Equity / Net Worth Ratio?

Postby harikaried » Fri Mar 15, 2013 11:39 am

acegolfer wrote:There are many threads discussing whether to pay off mortgage or not.
Okay, originally I had an example in my previous comment:

If someone had $100k cash and decided to buy a $100k house with a $80k loan, equity = $20k, net worth = $100k, ratio = 20%. But then if one pays off that loan immediately, equity = $100k, net worth = $100k, ratio = 100%, i.e., shifting all assets into home equity.

Doing a quick glance at the responses, it seems like people feel comfortable with 20-30% net worth being home equity when paying off a mortgage. So perhaps when making extra principal payments, be aggressive in lowering the debt but not so much that you shift too much of your assets into the home.

acegolfer
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Re: Your Home Equity / Net Worth Ratio?

Postby acegolfer » Fri Mar 15, 2013 1:31 pm

harikaried wrote:
acegolfer wrote:There are many threads discussing whether to pay off mortgage or not.
Okay, originally I had an example in my previous comment:

If someone had $100k cash and decided to buy a $100k house with a $80k loan, equity = $20k, net worth = $100k, ratio = 20%. But then if one pays off that loan immediately, equity = $100k, net worth = $100k, ratio = 100%, i.e., shifting all assets into home equity.

Doing a quick glance at the responses, it seems like people feel comfortable with 20-30% net worth being home equity when paying off a mortgage. So perhaps when making extra principal payments, be aggressive in lowering the debt but not so much that you shift too much of your assets into the home.


Exactly.

I was surprised to see the 20-30% ratio when other BH paid off their mortgage. My initial guess would have been around 40%. It seems that BH really like to invest a lot of their net worth in financial assets. Great stuff!

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Peter Foley
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Re: Your Home Equity / Net Worth Ratio?

Postby Peter Foley » Fri Mar 15, 2013 2:21 pm

acegolfer

So are you planning to do any analysis based on the responses? In scanning the responses I was unable to gain any insight into what such a ratio might mean; too many other variables and a host of unknowns.

acegolfer
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Re: Your Home Equity / Net Worth Ratio?

Postby acegolfer » Fri Mar 15, 2013 2:39 pm

Peter Foley wrote:acegolfer

So are you planning to do any analysis based on the responses? In scanning the responses I was unable to gain any insight into what such a ratio might mean; too many other variables and a host of unknowns.


I agree. To be able to do any analysis, I will need more personal information such as age, actual $ net worth. I just asked questions that are not too intrusive. I bet some may think even the OP questions are too personal.

From the responses, I can say

1. BHs don't put all the net worth in one asset.
2. Many BHs have paid off mortgage.

What else have you found?

DrPeppaPig
Posts: 23
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Re: Your Home Equity / Net Worth Ratio?

Postby DrPeppaPig » Fri Mar 15, 2013 2:43 pm

1 - 20%
2 - No

icefr
Posts: 280
Joined: Sun Apr 17, 2011 10:50 am

Re: Your Home Equity / Net Worth Ratio?

Postby icefr » Fri Mar 15, 2013 3:05 pm

1. 46%
2. Not yet, but should do so within 5-6 years.
3. I expect it to go up to about 55% by the time I pay it off.


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