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Mostly agree, except: > house IS AN ASSET. Yes, if you own your house. No, if you have a mortgage, the bank owns it. When the market was 'normal,' this would

Mostly agree, except: > house IS AN ASSET. Yes, if you own your house. No, if you have a mortgage, the bank owns it. When the market was 'normal,' this would have been less of a risky issue. Take out that 15-30 year loan with the confidence that the home's value would all but be guaranteed to appreciate. The market has been abnormal since early 2000's. Since, the housing market has become more of a speculative and volatile market, driving prices up to levels that the market cannot sustain without liquidity from the federal reserve, which has monetized an equivalent to 34% of US GDP. Not just housing - stocks and bonds as well.[0][1] I think we should re-think what an "asset" is, starting with the question - is an asset an asset if can not maintain its market value without with out a central bank? Economic policy makers were so exasperated with the housing crisis, they even suggested buying down and burning homes so the prices would stop dropping.[2] And that is key - to keep the prices from dropping. Does that sound like healthy market? [0] https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm https://www.federalreserve.gov/monetarypolicy/bst_recenttren... [1] https://www.zerohedge.com/markets/central-bank-balance-sheets-hit-28-trillion-next-year https://www.zerohedge.com/markets/central-bank-balance-sheet... [2] https://www.fool.com/investing/general/2011/10/06/creative-destruction-in-the-housing-market.aspx https://www.fool.com/investing/general/2011/10/06/creative-d...

bluedevil2k 6y ago
Even if you have a mortgage, you have some equity in it. Most mortgages require 20% down payment in your home, you can still get a way with a 80/15/5 loan now where you only have to put 5% down.
- scarface74 6y ago
  FHA mortgages are 3.5% down and really easy to qualify for.
nulbyte 6y ago
>> house IS AN ASSET. > Yes, if you own your house. No, if you have a mortgage, the bank owns it. This is incorrect in most of the United States and in other countries, like England, where the mortgagee only has a lien; the mortgagor has legal title. That is, the mortgagee only has a right to obtain legal title in the event the debtor defaults. Until the debtor defaults and the mortgagee secures legal title, the debtor has legal title and owns the mortgaged property, which is properly the debtor's asset.

bluedevil2k 6y ago

Even if you have a mortgage, you have some equity in it. Most mortgages require 20% down payment in your home, you can still get a way with a 80/15/5 loan now where you only have to put 5% down.

scarface74 6y ago
FHA mortgages are 3.5% down and really easy to qualify for.

nulbyte 6y ago

>> house IS AN ASSET. > Yes, if you own your house. No, if you have a mortgage, the bank owns it. This is incorrect in most of the United States and in other countries, like England, where the mortgagee only has a lien; the mortgagor has legal title. That is, the mortgagee only has a right to obtain legal title in the event the debtor defaults. Until the debtor defaults and the mortgagee secures legal title, the debtor has legal title and owns the mortgaged property, which is properly the debtor's asset.