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Joel, while generally I agree with you about asset transfer on the paying down of a house, that mindset can also get folks in trouble. While my house has not gone down in value, it has increased only about the equivalent of 1% a year for the 6 years we've lived here--less than $10,000. AND we've put over $20,000 of work into it (broken sewer line, new furnace, moved water heater so it was legal, lead paint abatement, new windows).

Yes, in high markets and maybe with a different house, this would be an appreciating asset. But so far, our house is costing us more money than it's going up in value!

Not that the house is in bad shape, it's just a flat market around here and we have a 100+ year old house. We're committed to paying down our mortgage and do find it part of our retirement strategy (no mortgage to pay). But I'm not so sure that once we pay off the mortgage we could sell the house for much more than the total amount of money we'd spent on fixing it up and interest payments.

And housing boom that is declining and the problems folks are having with sub-prime mortgages shows that there are plenty of folks who are getting upside down on their houses.

Selphiras
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