Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 1
If I have a mortgage and investments and they both decrease in value and I lose my job, do I have to worry about losing my house?

I would label this as "it depends." A couple of ways I reduce risk are: a fully funded emergency fund that has the equivalent of 6 months of living expenses, and having 25% of my taxable investments in bonds so it isn't as volatile as an all stock portfolio. I would also label it as unlikely that a diversified large caps stock portfolio would go all the way down to zero, thought a deep drop isn't unheard of (e.g., DJIA drop of 80% from 1928 to 1932).

A multi-year period of no income and stock market decline at the same time could cause me to lose my place to the mortgage company.

But then again if I don't have the money for property tax because I paid down my mortgage and don't have liquid assets, and I don't have a job so I cannot get a loan, I could lose my place to the county tax collector.

Either way, there can be risk involved, whether the mortgage is paid off, or whether the money is used for a diversified portfolio. Which way really has more risk? I really don't know.
Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.