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Balance Sheet and Net Worth

When planning to buy real estate, one should complete a balance sheet and also a planned post-purchase balance sheet. A balance sheet will allow you to calculate your net worth. Net worth is your total assets minus your total debts. A positive net worth is viewed favorably by lenders, in case you lose your job or are temporarily unable to pay your mortgage. This will also will allow a buyer to measure the impact on net worth of a potential real estate purchase.

Below is an example of a balance sheet and a planned post-home purchase balance sheet:




 Checking Account$2,000
 Savings Account$3,000
 Home Down Payment$35,000
 Auto (market value)$14,000
 Other Liquid Assets$5,000
 Total Assets$134,000
DebtsAuto Loan Balance$10,000
 Credit Card 1 Balance$3,000
 Credit Card 2 Balance$2,000
 Total Debt$15,000
 Net Worth (a - d):$119,000




AssetsHome (market value)$175,000
 Checking Account$2,000
 Savings Account$0
 Auto (market value)$14,000
 Other Liquid Assets$5,000
 Total Assets$271,000
DebtsMortgage Balance$140,000
 Auto Loan Balance$10,000
 Credit Card 1 Balance$3,000
 Credit Card 2 Balance$2,000
 Total Debt$155,000
 Net Worth (a - d):$116,000



1. $3,000 expense is assumed for closing costs. 
2. Savings account balance is $0 after purchase due to closing costs. 
3. Net Worth is reduced by $3,000 due to closing costs.

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