FHA: 20% decline over 8 years:
$158,101.62 (8 years of interest) – $0(equity) + 14k (down payment) = $172101.62 (total cost of living in it for 8 years)
BUT REALLY IT IS COSTING 172-66K = DOWN 106k BECAUSE YOU GOT TO KEEP YOUR 66K
flat over 8 years:
$158,101.62 (8 years of interest) – $60723.87(equity) – 14k (down payment) = $83377.75 (total cost of living in it for 8 years)
AGAIN, REALLY IT IS COSTING 83K-66K = DOWN 17K
20% increase over 8 years:
$158,101.62 (8 years of interest) – $140723.87(equity) – 14k (down payment) = $3377.75 (total cost of living in it for 8 years)
REALLY YOU ARE “UP” (SORT OF) 69K SINCE WE ARE COUNTING THE ORIGINAL MONIES IN BOTH SCENARIOS
UP 69K Yes, you’re correct here.
Conventional: 20% decline over 8 years:
$113,342.30 (8 years of interest) – $46907.76(equity) + 80k (down payment) = $146434.54 (total cost of living in it for 8 years)
IS THE 80K INCLUDED IN THE 46.9 EQUITY No, The $46.9k is not part of the $80k. Since you subtract $66k in the FHA equation, you have to subtract $62k over here too for the monthly payment saving. $146434.54 – $62k = ~$84k
flat over 8 years:
$113,342.30 (8 years of interest) – $126907.76(equity) – 80k (down payment) = -$93565.46 (total cost of living in it for 8 years)
127K – 113K – 80K = down 66k 127K(This one already contains $80k down) – 113K + 62K = up $76k
20% increase over 8 years:
$113,342.30 (8 years of interest) – $206907.76(equity) – 80k (down payment) = -$173565.46 (total cost of living in it for 8 years) This actually should be:
$206k – $113k + $62k = up $155k
WHAT DO YOU GET AS YOUR BOTTOM LINE FOR UP/DOWN FOR THE 6 DIFFERENT PERMUTATIONS
To summarize:
20% down:
106k – 84k = ~$22k cheaper to go w/ conventional.
$76k + $17k = ~93k cheaper to go w/ conventional.
$155k – $69k = ~$86k cheaper to go w/ conventional.
I did not include the opportunity cost of the $66k or the $62k. I also didn’t add in the tax consequence of the income that would have been made from the $66k and $62k.
[quote=scaredycat]didn’t somebody say it was easy to run the numbers previously? why isn’t this an easy clear calculation?[/quote]
Doing the actual calculation is easy. The hard part is figuring out which variables you want to include into your calculation and how robust you want your calculation to be. Also, hopefully with me fixing my errors, it should be a little clearer now.
