Author Topic: Home equity as a percentage of net worth?  (Read 34570 times)

hadabeardonce

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Re: Home equity as a percentage of net worth?
« Reply #150 on: June 07, 2018, 11:56:38 AM »
I would assume this varies quite a bit by region, and that the Californians will have a higher percentage.
Californian... 50%+ of my net worth is home equity. Bought a condo in 2004 for 228,000. SF Bay Area real estate is crazy.

Code: [Select]
$662,000 Net Worth
$483,000 Condo FMV
$146,000 Mortgage Balance
$340,000 Condo Equity

We've only been mustachianimizing our investments since mid 2016.

frugalnacho

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Re: Home equity as a percentage of net worth?
« Reply #151 on: June 07, 2018, 12:02:14 PM »
About 67%.  We have 2 houses.  They have both appreciated since we purchased them.

We sold one house, and paid the other mortgage off.  We still hold a mortgage ($46k at 0%with no payments due) that needs to be paid, but nothing is due until we sell the house.

Current home equity $114k, current NW $449k, so 25%.

My NW was only $257k when I made the original post 3 years ago, an increase of $192k.  That's crazy.

Brother Esau

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Re: Home equity as a percentage of net worth?
« Reply #152 on: June 07, 2018, 12:17:27 PM »
13%

TheWifeHalf

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Re: Home equity as a percentage of net worth?
« Reply #153 on: June 07, 2018, 12:41:36 PM »
8%
I did not include the home value in our net worth
Zillow's info is so antiquated, it's unreliable.  For one, the land we have, they say we have half!

I saw a house for sale near here, and the map was ALL wrong. I called the agent and told him, because I didn't want him to wonder why no one called on that house.

CoffeeAndDonuts

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Re: Home equity as a percentage of net worth?
« Reply #154 on: June 07, 2018, 07:52:56 PM »
6.2% in home equity (after transaction costs) of about $1.3m nw.

Couldn't resist a 20% down mortgage fixed at 3.625% for 30yrs on our latest purchase.

The mortgage hurts our swr math but keeping the proceeds from our last home which was at about 60% paid off sure does help our access to post tax liquidity.

Home value as a percentage of assets is about 25%.

A little spendier than I expected but it's a home we're really happy with and enables other mustachian behaviors especially with biking and transit.

PhilB

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Re: Home equity as a percentage of net worth?
« Reply #155 on: June 08, 2018, 03:44:35 AM »
Very hard to be exact as our NW includes some pensions kicking in in 11 years time which are hard to value without getting a transfer value quote. Roughly speaking we are 25% home equity, 25% these pensions, 50% DC pensions and other investments (this latter category broke the £1M barrier for the  first time today! :0)

Villanelle

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Re: Home equity as a percentage of net worth?
« Reply #156 on: June 08, 2018, 04:04:39 AM »
We no longer live in it, since we moved overseas, but it's about 40%.  That's in crazy SoCal, for a >2000sqft home with no yard and some very dated finishes (though that's not quite how it's described when I list it for rent!).

Sadly, while we aren't sure, retiring in SoCal would/will probably be our first choice, so that equity might not matter much. 

That also doesn't account for DH's eventual pension, which is a huge part of our FIRE plans.

BlueHouse

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Re: Home equity as a percentage of net worth?
« Reply #157 on: June 08, 2018, 06:48:17 AM »
About 30% right now.

BayAreaFrugal

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Re: Home equity as a percentage of net worth?
« Reply #158 on: June 08, 2018, 07:57:24 AM »
I'm at about 60%. The SF Bay Area is insane, our house is appreciating faster than investment growth and additional savings combined. We do have plans to sell our house at some point and move somewhere cheaper, so I include it in our NW.

OurTown

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Re: Home equity as a percentage of net worth?
« Reply #159 on: June 08, 2018, 08:07:08 AM »
I wonder if there is an "optimal" percentage, or maybe a sliding scale based on HCOL vs LCOL?  Obviously you don't want too much of total net worth tied up in your home, so there is a "less is more" rule of thumb.  IIRC this was addressed in the "Millionaire Next Door."  There is also a sort of carrying cost (based on fmv, not equity) insofar as a more expensive home will require a higher payment during the mortgage years, and will still require higher property taxes and insurance after payoff. 

BTDretire

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Re: Home equity as a percentage of net worth?
« Reply #160 on: June 08, 2018, 08:48:06 AM »
I don't count home equity as part of my net worth calculation.
 I'm at about 7%. Relatively low value home, high net worth.

Much Fishing to Do

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Re: Home equity as a percentage of net worth?
« Reply #161 on: June 08, 2018, 08:48:35 AM »
Obviously you don't want too much of total net worth tied up in your home

I think this is true for good savers, including the majority of folks who visit this site.

But for most of the population the equity being naturally built over time due to paying off principal and the home asset inflating represents most of what someone is "saving" (look at the difference between median net worth vs. median net worth minus primary residence).  Of course, this used to be a better form of forced saving back when the normal pattern was to get a 30 year fixed mortgage and pay it off over time, not pulling out equity or oft home moves, etc.  I had an uncle tell me when I was looking to buy a home he made the 'mistake' of not buying the largest home he could get a mortgage for, and given his net worth was probably pretty equal to his paid off home, and probably would have been no matter what size home he bought (i.e. he would have spent whatever wasn't forced into the mortgage payment), for him this was true.

dude

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Re: Home equity as a percentage of net worth?
« Reply #162 on: June 08, 2018, 08:49:53 AM »
If we're talking home equity, not value, it's 18% (not including value of my pension). Our home value has increased 34% since we bought it 10 years ago.

FIRE@50

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Re: Home equity as a percentage of net worth?
« Reply #163 on: June 08, 2018, 08:54:03 AM »
8%
I did not include the home value in our net worth
Zillow's info is so antiquated, it's unreliable.  For one, the land we have, they say we have half!

I saw a house for sale near here, and the map was ALL wrong. I called the agent and told him, because I didn't want him to wonder why no one called on that house.

As the owner, you can update info on Zillow.

Bird In Hand

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Re: Home equity as a percentage of net worth?
« Reply #164 on: June 08, 2018, 09:41:34 AM »
About 19% if Zillow is accurate.  We only owe ~$70k and it will be paid off in 2-3 years.  I expect our investments to go up a lot more than that over the next 2-3 years, so that 19% is probably an upper limit.

Dicey

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Re: Home equity as a percentage of net worth?
« Reply #165 on: June 08, 2018, 09:56:13 AM »
8%
I did not include the home value in our net worth
Zillow's info is so antiquated, it's unreliable.  For one, the land we have, they say we have half!

I saw a house for sale near here, and the map was ALL wrong. I called the agent and told him, because I didn't want him to wonder why no one called on that house.
Zillow has made it a lot easier to edit your own listing. I've done it on a couple of properties. I have also alerted them to known rental scams, which they adressed promptly. I do not find their listings to be more antiquated than any other site, and their History and Neighborhood functions are invaluable when house hunting. I live in a hot market so their numbers are generally on the low side. I comfortably use their Zestimates, knowing that it is a minimum value in the present market. It's not a vital number for us by any means.

We searched exhaustively for this house, so we use Zestimates to see how this home has appreciated against the also-rans. We also use the History function when house hunting for our next rental or flip project. It's super helpful.

dogboyslim

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Re: Home equity as a percentage of net worth?
« Reply #166 on: June 08, 2018, 10:13:33 AM »
I'm at 15%

PNW Lady

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Re: Home equity as a percentage of net worth?
« Reply #167 on: June 08, 2018, 10:13:48 AM »
Our home equity is around 30% of our total NW. Until somewhat recently I was thinking we would eventually sell our house in a HCOL area and relocate to a LCOL area as part of our FIRE plan, but the reality is 1) we love our home, 2) we love our neighbors/neighborhood and local community, 3) we love our city and its proximity to some of our favorite spots (even though it has become a bit crowded for my taste), and 4) all of our family lives here.  I am slowly coming to terms with the fact that we will most likely be in our current home for the long haul, which means we will need to save more.


2Birds1Stone

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Re: Home equity as a percentage of net worth?
« Reply #168 on: June 08, 2018, 10:39:54 AM »
0%

Bracken_Joy

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Re: Home equity as a percentage of net worth?
« Reply #169 on: June 08, 2018, 10:52:52 AM »
24% if I use the assessed value when we bought a couple years ago. 30% if you use the zillow estimate of the houses value right now. (Accurate or even possibly an underestimate of value, based on comps and the work we've put into the place).

We're still pretty early in this process, both in the big savings working years, and in the mortgage.

des999

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Re: Home equity as a percentage of net worth?
« Reply #170 on: June 08, 2018, 11:07:35 AM »
about 25% based on a conservative value for our house.  I could see us downsizing in 10 years and using some of that money for the stache.

TheWifeHalf

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Re: Home equity as a percentage of net worth?
« Reply #171 on: June 08, 2018, 09:36:40 PM »
8%
I did not include the home value in our net worth
Zillow's info is so antiquated, it's unreliable.  For one, the land we have, they say we have half!

I saw a house for sale near here, and the map was ALL wrong. I called the agent and told him, because I didn't want him to wonder why no one called on that house.

As the owner, you can update info on Zillow.
thanks for the response. I probably won't bother, it would screw up about 5 neighbors. On the other side of the house that used to be there, there was ?, I don't know if easement is the right word, that allowed that land to be used for a road, when needed. This was back in the early 1900s. The house that used to be next to us, was bought by the neighbor on its other side, and he had the easement taken away, about 25 years ago. He knew how to do it, he was a lawyer. So since the road would run next to us, we actually have 2 lots, one in front of the other. Zillow only has the front one as this address.

This is not a county that tries to run every little thing, they kind of leave people alone.  We went to the county seat to see who to contact about the tile out front, between the sidewalk and the road. No one? We could do what ever we wanted, but in the end, the problem was in the back yard instead of the front.

davisgang90

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Re: Home equity as a percentage of net worth?
« Reply #172 on: June 09, 2018, 10:44:18 AM »
We've been home owners for a week.  Bought with a VA loan, zero down.  Because it was my second time using my VA loan benefit, I was charged a VA funding fee that I rolled into the loan balance (I'll get it refunded as soon as I get a disability rating from the VA) so I'm technically a little upside down on the loan.

In related news, I retire in 6 days.

BlueMR2

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Re: Home equity as a percentage of net worth?
« Reply #173 on: June 09, 2018, 10:49:04 AM »
9.5% currently.  Still adding to the 'stache, but home values keep rising too.  It'll be interesting to see how it changes.

Capsu78

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Re: Home equity as a percentage of net worth?
« Reply #174 on: June 09, 2018, 11:56:10 AM »
22%

albireo13

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Re: Home equity as a percentage of net worth?
« Reply #175 on: June 09, 2018, 12:45:23 PM »
currently 5.4% for us

Bateaux

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Re: Home equity as a percentage of net worth?
« Reply #176 on: June 09, 2018, 08:17:00 PM »
Real estate (currently no mortgage)is currently about 12 percent of NW.  We're buying another home and won't be selling current home for a while.  With the down payment on the new home we'll be about 15 percent. 

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Re: Home equity as a percentage of net worth?
« Reply #177 on: June 09, 2018, 08:32:16 PM »
66%. SF FTW!

Dicey

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lhamo

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Re: Home equity as a percentage of net worth?
« Reply #179 on: June 09, 2018, 09:29:11 PM »
29%, according to Zillow valuation (which dropped precipitously the last few weeks due to some questionable comps).

We paid cash last year in a HCOLA.  Will downsize to something smaller (and probably cheaper) in about 10 years when the kids are launched.  This is not a house you can grow old in (stairs! and too much yard)

SwordGuy

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Re: Home equity as a percentage of net worth?
« Reply #180 on: June 09, 2018, 09:36:49 PM »
About 5.5% with 13 years, 1 month to go on a 15 year mortgage.

MrUpwardlyMobile

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Re: Home equity as a percentage of net worth?
« Reply #181 on: June 10, 2018, 08:12:29 AM »
Mine is 23% using Zillow.  No mortgage debt.

Be careful using Zillow.  I track my home value and net worth monthly and in mid 2014 my home value increased significantly for about 6 months then fell again.  If I now look at the historical trend on Zillow, it does not reflect the increase in 2014.  It is as if it never happened, but the values in my spreadsheet were recorded from the Zillow site the day I entered them.

Zillow’s Zestimates are notoriously nonsense.  Our apartment currently shows as being a half million more than it’s worth.

partgypsy

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Re: Home equity as a percentage of net worth?
« Reply #182 on: August 07, 2018, 01:04:19 PM »
Before the divorce it was 47-52% (depending on appraisal or zillow). After divorce will be is 63-68% depending on what number use. I took money out of retirement fund to pay out ex for house. I have 2 kids and I need stability right now. I feel like it is the right decision. But also feels like I am behind, retirement-wise. Some things are worth more than money however. 
« Last Edit: August 07, 2018, 01:11:46 PM by partgypsy »

Fishindude

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Re: Home equity as a percentage of net worth?
« Reply #183 on: August 07, 2018, 01:10:38 PM »
Our home is part of a 160 acre farm.  If we cut the house, outbuildings and a couple acres away from the farm it would probably represent around 4% - 5% of our net worth.

onlykelsey

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Re: Home equity as a percentage of net worth?
« Reply #184 on: August 07, 2018, 01:16:11 PM »
I have a walk-up condo in Manhattan. 

My condo is worth about 630K  (zillow, but very close to the average of the last two units that sold SUBJECT to a large assessment)
I owe about 348K (so have about 282K in equity)
I book a 40K "liability" that I assume I'll have at sale for the transfer and prepping the place.
My overall net worth is about 740K.

So the equity is about 282/740 (~38%) by the calculation people are using here, right?

Slee_stack

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Re: Home equity as a percentage of net worth?
« Reply #185 on: August 07, 2018, 01:22:57 PM »
18%



SugarMountain

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Re: Home equity as a percentage of net worth?
« Reply #186 on: August 10, 2018, 09:58:14 AM »
About 18% of our net worth. (House is almost paid off.)

But I don't count this towards our stache at all when looking at things like the 4% rule of thumb and firecalc or other simulators. (There are loads of threads around where folks debate whether it should count.  There is no pure answer, I don't think.  My take is that I'm not counting it, but the house is there as a backstop should we run out of money in our late years it could be sold or reverse mortgaged to get another few years worth of money.)

aceyou

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Re: Home equity as a percentage of net worth?
« Reply #187 on: August 10, 2018, 01:45:15 PM »
23% of net worth.

Net Worth: $651,000
Home Equity: $150,000

*Disclaimer, I assumed that there would be a 6% commission if I sold my home to come up this this 150k number. 
*Zillow says my home is worth 310k,  I have 139k left on the mortgage...this is my only remaining debt. 

dacalo

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Re: Home equity as a percentage of net worth?
« Reply #188 on: August 10, 2018, 02:15:39 PM »
Around 60% (thanks Silicon Valley!)

We don't include in our NW as it is not liquid and doesn't produce income for us. Not planning to sell for a while too.

mak1277

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Re: Home equity as a percentage of net worth?
« Reply #189 on: August 10, 2018, 02:32:25 PM »
fully paid off home is 10.9% of NW

SwordGuy

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Re: Home equity as a percentage of net worth?
« Reply #190 on: August 10, 2018, 08:41:58 PM »
About 5.5% with 13 years, 1 month to go on a 15 year mortgage.


11.5% based on value of the house.   5.3% based on equity in the house.   13 years to go on the 15 year mortgage.

Our mortage payment adds about $850 a month in equity.   Our stock/bond portfolio, at average historical rates of return, should add considerably more.

So, even though we are paying our mortgage down on schedule, it should - in average or better stock market years - become a smaller portion of our net worth.   :)




ender

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Re: Home equity as a percentage of net worth?
« Reply #191 on: August 11, 2018, 06:07:52 AM »
We're around 10%. A bit higher if you include our "house payoff" account funds, which we kind of have designated to payoff the mortgage once the account equals or is above the mortgage amount.

monarda

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Re: Home equity as a percentage of net worth?
« Reply #192 on: August 11, 2018, 07:21:58 AM »
Home equity: 29%
Rental equity: 38%
Funds: 33%

I include home equity in NW calculations, but not in any SWR/FI calculations.

Ooh, I like this simple way of expressing it.

Mine:
Home equity   15%
Rental equity   63%
Funds, both liquid and IRA   22%

Since this thread has been revived, revisiting after a couple of years:

Home equity   14%
Rental equity   57%
Funds, both liquid and IRA  29%

but after remodel is done, this will shift to about

Home equity   22%
Rental equity   51%
Funds, both liquid and IRA  27%

since home equity will jump up about 80-100K (just guessing)

Will adjust these numbers when the project is done and it actually happens.

Must_ache

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Re: Home equity as a percentage of net worth?
« Reply #193 on: August 11, 2018, 08:39:39 AM »
Home value = 280.  Mortgage = 102.  Home Equity = 178.  New Worth = 889.  178/889 = 20.0%

nick663

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Re: Home equity as a percentage of net worth?
« Reply #194 on: August 11, 2018, 03:40:44 PM »
~25% today.  Will shrink in the immediate future as we invest more but it will be 25% again if we pay it off after reaching our FI number.

Be careful using Zillow.  I track my home value and net worth monthly and in mid 2014 my home value increased significantly for about 6 months then fell again.  If I now look at the historical trend on Zillow, it does not reflect the increase in 2014.  It is as if it never happened, but the values in my spreadsheet were recorded from the Zillow site the day I entered them.
Redfin does the same.  Annoys me enough that I've contacted them.  Their response was something about updating the graph to reflect the most up to date information.

Rife

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Re: Home equity as a percentage of net worth?
« Reply #195 on: August 12, 2018, 10:46:50 AM »
Real estate has been crazy in the Seattle area. We used a zero down VA loan six years ago but our house doubled in value. Currently around 40% of total net worth.

sol

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Re: Home equity as a percentage of net worth?
« Reply #196 on: August 12, 2018, 11:06:38 AM »
About 8 percent.

Revisiting this thread three and a half years later, our home equity has risen to 11%.

In terms of absolute dollars, the equity in our house has roughly tripled since 2015, due to rapidly appreciating home prices and a 15 year amortization schedule.  But our net worth has approximately doubled in that time, so the percent of equity as a proportion of net worth isn't up by very much.

LoanShark

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Re: Home equity as a percentage of net worth?
« Reply #197 on: August 13, 2018, 02:19:56 PM »
45%, no mortgage...so that % declines by the day!

ohio4life

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Re: Home equity as a percentage of net worth?
« Reply #198 on: August 14, 2018, 03:08:28 PM »
Now:
19% with pension's cash value included
26% with pension's cash value not included

Earlier this year:
29% with pension's cash value included
40% with pension's cash value not included

I did a cash out refinance in the spring with the intent of putting most of that back into the house in repairs and upgrades. I've been slow to get off the ball on that. Have approximately 13% of my net worth in cash for the last 5 months.

Do I need a face punch?

palerider1858

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Re: Home equity as a percentage of net worth?
« Reply #199 on: August 14, 2018, 03:42:06 PM »
Home equity is 44% of our net worth. Thanks to the Seattle house market our home's value has almost tripled since we purchased it in 2011.