Your Home Equity / Net Worth Ratio?

[Flashes1]

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]

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

[ks289]

27%

No

[ofcmetz]

1. 25%

2. No. Less than 12 years to go.

[Blister]

17%

yes

22%

[rr2]

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]

1. 8.5%

2. No

[Dadarkar]

1. 26%
2. yes
3. 30%

[jeffyscott]

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)

[harikaried]

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]

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.

[acegolfer]

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]

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

[G12]

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

[harikaried]

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]

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!

[Peter Foley]

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]

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]

1 - 20%
2 - No

[icefr]

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.