Re: Total Assets minus Liabilities=net worth
The Mortgage app is asking me a few questions that I'd like to answer as 100% accurately as possible.
It ask to list all the Assets you have in different accounts, including value of any automobiles you might own - can I put down an expensive diamond ring, what about a boat? Since if I ever needed cash these are items that could be sold to bring in decent money.
If I can add in even just the ring at resale price I'll at least have a net worth of $68.00!!! instead of being negative due to my new auto loan plus low balances on 3 credit cards that i have listed under liabilities.
Personally I would never include all my assets, I only show and give them just enough to approve the loan. I can always add more assets if needed. But its not really their business if I have $10 extra or $50million extra worth of assets.
Another thing I will not do, is do business with any Bank, CU, or Financial Institution with my Personal Banking. I dont want them scrutinizing my accounts and keeping an eye on what I spend and dont spend.
I'm the same way JM, I won't take out loans or have credit cards with the bank that I keep my money.
Thanks for the responses!
INCOME was in a different section.
After completing the net worth area.. I realize how easily I could have been worth NEGATIVE but at least I'm worth $68 ! lol better than a negative!
(a) ASSETS: BANK BALANCE, vested 401K, STOCKS/BONDS, LIFE INSURANCE (CASH VALUE) , OWNED AUTOS AND OTHER ITEMIZED ASSETS.
(b) LIABILITIES: ALL accounts w/balances - ie revolving, auto loans, child suppport owed, etc
And not your monthly amounts but your entire balance owed is what you add.
Deduct (b) from (a) and that is your net worth. I may be missing some items but this was the basics of it.
Now if I would have completed this form on payday, due to current bank balance, things would have looked even better - but today wasnt payday so I listed exacts.
And to think - I have bought an older RV, used Ford Truck and older Nissan Maxima but didnt care to have my name on them so I wouldnt have to go to the court house every year to get the registration tags!
I'm learning alot through this one little section.
When the asset section asks for owned vehicles, I think they mean any vehicle you have even if it is financed. The vehicle doesn't have to be owned outright. The asset will offset all or some of the liability depending upon value. What they don't want listed are leased vehicles because the borrower never owns it without exercising a purchase provision.
Also, JM said she wouldn't put down all of her assets, only enough to support the loan. I agree with that idea. Most people I have worked with need to put down all their assets in order to qualify, but certainly there are also those borrowers that have many more assets than they need to qualify. I agree totally with not having all of your eggs in the same basket (mortgage, checking, cc's etc at the same bank).
I feel okay now about how I answered, at least its in the positive without any vehicles.
STARTINGOVER, this particular loan app ask that you list under the Asset column OWNED Vehicles and then under the Liabilities Column it ask for all outstanding debts INCLUDING automobile "loans", house loans etc.