4 ms·
Mortgages are offset in net worth calculations by the value of the home, so they shouldn't have much of an effect on net worth unless the house has lost signifi
by Harvey-Specter 9y ago
Mortgages are offset in net worth calculations by the value of the home, so they shouldn't have much of an effect on net worth unless the house has lost significant value or you overpaid for it. Similar situation with car loans, although cars lost a lot of value immediately, so they could have some effect.
- TheAdamAndChe 9y agoRight, but home values _can_ change drastically, and did at the time that the US lower class experienced a negative net worth, during the '08 financial crisis.
- thaumaturgy 9y agoLoans aren't free. Including interest, the cost of a loan can easily exceed the value of the thing being purchased with it (in fact, it initially almost always does). Stagnant housing markets and new vehicles will both add to a person's overall debt, even when accounting for the market value of the asset.