Re:How I Think About Debt
by ryandrake on Monday May 06, 2024 @08:58PM
(#40281181)
Your home equity = your property's value minus your loan balance. So even if that value is currently negative, every dollar you pay towards principal increases it. It's not an expense.
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Your expense is that you've hitched yourself to an oversized loan, so you're putting money from one pocket to another, except the latter has a hole in it and you have an obligation to keep feeding it.
If your cost was only mortgage interest, you'd be happier with 600k outstanding at 1% than 300k at 4% for the same house.