Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Of course. When we graduated from college we had student loans to repay and we got married and had to set up housekeeping. I also bought a new car. But we made a plan and made our way out...
It feels normal. A car note or two and a mortgage and little savings would often produce a negative net worth and since that's a lot of Americans it's the norm. I was like that in my early 20s when I bought my first house. Now it would disgust me to go back there. I cut out car payments for the better part of 7-8 years, just got another one but put something like 70% on a used honda but to go negative again eh it would suck and mean something disastrous happened
No, it wouldn't. You apparently haven't considered the fact that the full value of both houses and cars are assets that go in the plus column when calculating one's net worth.
Having a mortgage per se has absolutely nothing to do with contributing to a negative net worth. If I buy a $1,000,000 house with a $900,000 mortgage, I have $100,000 in positive net worth right there. The $900,000 that I would owe on the mortgage would be offset by the value of the house resulting in zero being added to the negative side of one's overall balance sheet.
The only exception to the above would be for those unfortunate souls who have negative equity if they bought just before the real estate bust and they owe more than their house is worth. Even car notes don't contribute to a person's negative net worth unless a person owes more than the car can be sold for.
No, it wouldn't. You apparently haven't considered the fact that the full value of both houses and cars are assets that go in the plus column when calculating one's net worth.
Having a mortgage per se has absolutely nothing to do with contributing to a negative net worth. If I buy a $1,000,000 house with a $900,000 mortgage, I have $100,000 in positive net worth right there. The $900,000 that I would owe on the mortgage would be offset by the value of the house resulting in zero being added to the negative side of one's overall balance sheet.
The only exception to the above would be for those unfortunate souls who have negative equity if they bought just before the real estate bust and they owe more than their house is worth. Even car notes don't contribute to a person's negative net worth unless a person owes more than the car can be sold for.
A lot of people get those crazy 84-month car notes nowadays and trade in after 2 or 3 years and roll the negative equity into the next new car. That alone could create a negative net worth even without other debt.
A lot of people also are going to be starting in the red on their homes now that 3% down financing is back. At least in the red after the RE commissions that would come with re-selling the house.
there are always exceptions to everything that can be dug up but for the most part, buying a car and taking a mortgage are not automatic negative net worth generators.
there are always exceptions to everything that can be dug up but for the most part, buying a car and taking a mortgage are not automatic negative net worth generators.
Buying a brand new car with under $2k down almost guarantees negative equity initially.
again , you are trying to single out all the little scenarios where the above may not be true. there is no such thing in any part of life where anything applys to everyone.
but odds are pretty good overall they will not be guaranteed a negative net worth just because they have a mortgage and bought a car.
i could come up with all kinds of situatons where they could but that still is not a general statement that is always true.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
