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Author: mphipps Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 74759  
Subject: Re: Is your house really an Asset? Date: 7/13/2000 7:36 PM
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Your house is an asset.
All asset carry expense and some assets carry income.
If you maintain your house the asset will
appreicate in value.
Assets have value as a result you can use them a collateral and create a liability.
Assets minus liabilities equals net worth.
You house is most certainly an asset.
You should always borrow money against income producing and/or assets that appreciate in value.
Assets that depreicate in value are bad collateral risk. Thus no one will give you along term loan against them.
Car, funiture etc are good examples.
Finally, the interest you pay on a liability is an expense against the cost of money having little to do with the asset.
You house most certainly increases in value. The banker is allowing you to produce cash flow for yourself by providing you money because the asset will grow in value.
Think not. Go try and get a car loan for 30 years.
If you managed your finances with net worth as the measuring stick rather than income and expense you would be surprised how much more you have.
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