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Reply to "What share of your NW is your house?"
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[quote=Anonymous][quote=Anonymous]I'm sure this will get me yelled at, but honest question... Why are so many folks here seemingly proud of having no debt/mortgage on a house? Given that we were in an extended low-interest period, we all had options to lock-in low-cost mortgages. For example, our principle residence has a value around 3mm. We have a mortgage of around 1.6mm, at 2.75%. While we have plenty of assets to forego the mortgage, we have had that money at work in the market instead. We've done way, way better post-tax than the 2.75% we're paying to the bank. If anything, I wish we had levered up a bit. We have multiple other properties, and each has a loan roughly at 50% LTV. Sure, there is a bit of risk here--the market could tumble. But over the next 20+ years, I think it a rather safe bet that we'll do better than 2.75% with our investments, even recognizing there will be multiple market cycles in there. If anything, I'm kicking myself for not going to higher LTVs on our real estate portfolio while rates were low. [/quote] Per Zillow my two homes are worth $11 million with no debt. That’s likely 15%-18% of my NW excluding my DAF. I had mortgages for about 30+ years and decided I didn’t want the hassle of mortgages and I had plenty of money to invest. And, once they put a cap on mortgage interest deductions there was less of an incentive. I also didn’t want my wife or my estate to have to deal with mortgages after I’m gone. In 2019 I was tempted when mortgages got below 3% but when the stock market tanked in 2020 I was glad I hadn’t. [/quote]
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