[quote=scaredycat]ok, but…go with the 20% loss over 8 years example. I’m ahead $25,000 for leaving my $66,000 with the bank for 8 years. That’s less than 40%…so my actual gain on my down payment is probably about 4% or less compounded? that’s not good.
your fha claculations look right, but the 20% ones look odd. does the quity include the down payment? are you counting that twice?[/quote]
No, I did not count the down payment, since it would be wiped out by the 20% drop. After 8 years of principal payment, your loan balance would be $273,092.24. I subtract that from $320k to get the equity value.
With FHA, your loan balance after 8 years would be $339,276.13. That’s greater than $320k, which is why I put $0 for equity in FHA scenario, since you’re walking away.
I don’t see how you would be coming out ahead w/ FHA. The cost difference is $25667.08. That’s without adding in the monthly difference in payment, which would be $62688 over 8 years. Do you think your $66k (difference in down payment) can make $88355.08 (134%) over 8 years? Assuming you’re not investing $62688 as well.
