How much do you owe?

I owe:

$850K mortgage @ 3% against ~$300K equity.

$15K car @ 0%

Looking to borrow another $600K for second house in the next few months. I like real estate as an investment right now with low mortgage rates, various government subsidies, high rents, moderate prices, and few great investment alternatives. (This is why 8-Ball doesn't think of mortgages in the same way he thinks of credit card debt. They generate wealth -- particularly relative to renting -- as often as they erode it . . . the last five years notwithstanding.)

Yes, mortgages can generate wealth.

They are a big part of my debt.

It is money that I owe. I need to have income to pay these debts, same as any other debts.

Now I can sell my property to generate the income to pay off the debt.

I cannot sell my property subject to a mortgage to pay off other debt and still owe the mortgage company.

It is definitely a debt tied to an asset.

But one way or another you owe the money.

Using the leverage to purchase real estate is a great way to gain wealth if you do it in a smart way.

So you can pile up a ton of debt and it doesn't have to be a bad thing.

in that case I have student loans in the amount of about 55k. That's locked in at a fairly low interest rate (3.5% or thereabouts), so I guess that's not too bad.

Pay you later wrote:

The question was - what do you owe?

A mortgage is something you owe.

Debt is debt.

What if you did a cash out refi and paid off your credit cards and car loans and such?

You would have the same amount of debt, it would just all be called a mortgage.

Equity becomes and issue but I didn't ask about that.

I'm not an accountant but I play one on LR. Count me in the mortgage should not be included camp.

Take the following 2 individuals as an example.

Individual A: mortgage $100K (on property assessed at $300), no credit card debt.

Individual B: credit card debt $100K, no mortgage.

Technically, they both owe $100K but their respective debt situations are completely different.

not an account wrote:

Pay you later wrote:

The question was - what do you owe?

A mortgage is something you owe.

Debt is debt.

What if you did a cash out refi and paid off your credit cards and car loans and such?

You would have the same amount of debt, it would just all be called a mortgage.

Equity becomes and issue but I didn't ask about that.

I'm not an accountant but I play one on LR. Count me in the mortgage should not be included camp.

Take the following 2 individuals as an example.

Individual A: mortgage $100K (on property assessed at $300), no credit card debt.

Individual B: credit card debt $100K, no mortgage.

Technically, they both owe $100K but their respective debt situations are completely different.

Why wouldn't you count it, but just clarify what the different type of debt is?

Scenario A - No mortgage, 100k in credit card debt, pays rent each month, doesn't own a home

Scenario B - 100K in mortgage, no credit card debt

Scenario C - No mortgage, no credit card debt, own home worth 200k

All three scenarios are very different. Without specifying a debt is mortgage debt, you wouldn't be able to distinguish between A and B. Without knowing the status of the mortgage, you would't be able to distinguish between B and C.

Property assed at $300? Do you mean $300K?

Either way in each situation the person owes $100K to a lending institution.

That's money that they have to come up with to pay pay back what was given to them.

Does individual B own a home out right?

If so, he can sell his house to pay off the $100K credit card debt.

If individual B does not own a home then the issue is about property ownership not type of debt.

It' like saying:

Individual A: Has $100K in the bank and owes $100K

Individual B: Has nothing in the bank and owes $100K

Who owes more?

They both owe the same amount even though their net worth is compeletly different.

I'm only asking about one part of the equation.

30 y.o.

Student debt: ~$55k

Business debt: ~$173k

Rental property mortgage: ~$175k [current market value ~$300k]

Cars: paid. I have never had, and never plan to have, a car payment. Buy used cars with cash and drive them until they fall apart.

Credit card: paid in full every month.

Total non-mortgage debt: $228k

TOTAL DEBT: $403k

Debt

25 years old

Mortgage: I owe 111k

Car: I owe 14k

Credit Card: I owe 2k

Student Loans: I owe 50k

Salary: 60k.

I plan to pay the credit card down as quickly as possible, and then attack the car. I do not plan on attacking the student loans at a fast clip because I work for the public sector and plan on applying for the student loan forgiveness program in return for 10 years of public work.

Only debt is a mortgage with a 154k balance, however I am selling my house next month and will buy a new house with a much bigger mortgage, probably around 417k.

WOW,

I am seeing 2 things here:

1 - A few of you seem totally locked into your jobs. Isn't that a shitty feeling? Like the last guy who had 60k salary and credit card, car and 111k mortgage. Dude doesn't it suck that your boss owns you mind, body and soul like that? If you lose your job you are screwed, you are in a situation where you have to pretty much do whatever he tells you. If the economy tanks and there are layoffs you are hooped?

I hope a lot of you really love your jobs with that much debt accrued. This huge debt accumulation seems to be the american way eh? (I'm canadian)

2 - This is all really a moot point if you don't put your age. If a guy has a 60k job, paid off half his mortgage and is 25 then holy hell that is awesome. If he is 60 that really sucks.

$360K mortgage, nothing else (thank god!)

12k in student loans (interest free for life since im in NZ)

Own my house outright thanks to a handy inheritance

nothing on the car

nothing on credit cards

earning 60K a year

5k PR 14:02

Age 21

26

House: $175k

Car: $5k

Student Loans: $18k

Salary: $56k

Rental Income: $10k

Smart people know how to use loans for their advantage. As long as your investment is yielding more than the loan and you can have a sufficient emergency fund, you are increasing your net worth. For example, you have a 48 month car loan at 3% interest and have a guaranteed (hypothetical, obviously) investment at 6% after taxes. You are increasing your net worth by 3%. Now, its usually best to get the 10 thousand dollar used car than the 25 thousand dollar new car regardless of loan terms.

dontflushwhileyousit wrote:

Why would anyone take out a car loan? Huge waste of money. If you can't afford to buy a car outright, then don't buy that car.

86k / 8 years left on Mortgage

18k on student loan

18k on one of two cars (other paid off)

No carried CC debt

142k income

...and I still feel broke.

As far as being locked into the job, I only agree to a point. My current house is over 55% paid off (exact number based on pending sale). Worst case scenario is I sell my house and cash out a 6 figure cushion. I am buying a new house next month and could always sell it in an emergency too. Of course I live in an area with a booming economy, so it wouldn't be quit as simple in other places.

Also, what I am paying in mortgage and property taxes ( net of tax benefits) is more or less what I would pay to rent an apartment and I am building equity at the same time. Finally, just typing how much debt you have doesn't tell the whole story for most. I have significant retirement savings for my age (38) and have enough of a cushion to take several years off.

doctor wrote:

You only have $300,000 in liquid retirement savings at 50?

Ya Ya Ya wrote:

1st house (a duplex that is my main residence) - paid off

2nd house (a vacation home, but will retire there) - paid off

1st car - paid off

2nd car paid off

Boat - paid off

Credit Cards - $0 balance carried, paid off every month

===============

401k - $100k

IRA - $89k

403b - $130k

duplex income - $6400 per year, covers all property taxes and Utilities on both houses.

Lived simple early on, but now at 50, enjoying life.

Actually I started out at $0 everything 10 years ago this June, thanks to ex wife. Much to her dismay, just as she was tossing me out, I landed a new job that doubled my income, and with out her I have been very successful in my career and was able to financially make and meet my own goals. Before we split, I was making $45k, now it is $115k. I lived with my parents for 1 year and helped them out and paid my share of utilities and rent. Then I rented a simple apartment for one year. All the time I was saving and contributing to my retirement funds at my employers matching limits, which were more than double my contributions. I bought and moved into one Unit in the duplex, which was very reasonably priced because it was a major fixer upper and did all the work myself. I paid for all the fixing using the Rent from the second unit. I was able to pay off the Duplex in 6 years by making extra payments on the principle every month. I then built my second home over about 1 1/2 years on the weekends. It is just a small vacation cabin, but it is big enough to retire to and I paid for the materials as I went. It is worth just over $100k, but because I did the building, it cost only about $35k.

Now I am just socking away a greater portion of my check and I intend to keep doing that until I hit 65.

OK. Now is the part where I break down my debt and watch people really jump on me:

Household debt - myself and my wife, early 40's

House 1- $160K mort plus $23K equity line- underwater by $25K- rented out for a little more than debt payments

House 2- $395K - 0 equity, bought 2 years ago

Student loan - $29K, 6.5 years left

Car 1 - $0

Car 2 - $10K

Car 3 - $33K

Credit cards - $40K accross 3 cards

$690K of total debt

Certainly a negative net worth even after adding any cash or 401k accts that I am not listing right now.

I'd say this is the peak debt of my life unless I buy another house at some point.

I am honestly not stressed about my debt. It's just numbers.

Interesting to see how people get worked up and feel sick when they owe money even if they have the means to pay their obligations.

~$150k