FHA loans; why not?

[scaredyclassic]

if im right on that, the numbers look more reaosnable to me. thenby putting 80k into the deal, you got a return on your 80k of 93k, about 110% over 8 years. Not bad but not as big as your numbers looked. so. what’s more likely to happen. a 20% rise in housing or a doubling of gold over the next 8 years?

also same logic applies to your flat 20% scenario, you’re not “subtracting the 20% you’re using it to make it seem like it was cheaper to live int he house than it was. it’s being show as a profit, the ‘negaitve” number isn’t a loss, it’s a “negative cost” of lviing there…

is there amortgage broker out there who can deftly set me straight? i really don’t know if im right

[an]

[quote=scaredycat]I still don’t think you ahve it right. the 80k isn’t being “subtracted”, it’s being added in to make it look cheaper on the 20% up scenarios.

you wrote:

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)

shouldn’t this be 207k – 113k = up 93,000 the 80 k isn’t profit to bring it up to 173k, it’s just money you put in that was there at the end of the transaction. kind of like if you’d left it in the bank. actually you’re only up 93,000.[/quote]
Sorry, I miss read your quote. Please see my comment on my next post. You can just remove the down payment part of the equation for the flat and increase cases.

[an]

[quote=scaredycat]I still don’t think you ahve it right. the 80k isn’t being “subtracted”, it’s being added in to make it look cheaper on the 20% up scenarios.

you wrote:

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)

shouldn’t this be 207k – 113k = up 93,000 the 80 k isn’t profit to bring it up to 173k, it’s just money you put in that was there at the end of the transaction. kind of like if you’d left it in the bank. actually you’re only up 93,000.[/quote]
Sorry, I miss read your quote. Please see my comment on my next post. You can just remove the down payment part of the equation for the flat and increase cases.

[an]

[quote=scaredycat]I still don’t think you ahve it right. the 80k isn’t being “subtracted”, it’s being added in to make it look cheaper on the 20% up scenarios.

you wrote:

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)

shouldn’t this be 207k – 113k = up 93,000 the 80 k isn’t profit to bring it up to 173k, it’s just money you put in that was there at the end of the transaction. kind of like if you’d left it in the bank. actually you’re only up 93,000.[/quote]
Sorry, I miss read your quote. Please see my comment on my next post. You can just remove the down payment part of the equation for the flat and increase cases.

[an]

[quote=scaredycat]I still don’t think you ahve it right. the 80k isn’t being “subtracted”, it’s being added in to make it look cheaper on the 20% up scenarios.

you wrote:

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)

shouldn’t this be 207k – 113k = up 93,000 the 80 k isn’t profit to bring it up to 173k, it’s just money you put in that was there at the end of the transaction. kind of like if you’d left it in the bank. actually you’re only up 93,000.[/quote]
Sorry, I miss read your quote. Please see my comment on my next post. You can just remove the down payment part of the equation for the flat and increase cases.

[an]

[quote=scaredycat]I still don’t think you ahve it right. the 80k isn’t being “subtracted”, it’s being added in to make it look cheaper on the 20% up scenarios.

you wrote:

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)

shouldn’t this be 207k – 113k = up 93,000 the 80 k isn’t profit to bring it up to 173k, it’s just money you put in that was there at the end of the transaction. kind of like if you’d left it in the bank. actually you’re only up 93,000.[/quote]
Sorry, I miss read your quote. Please see my comment on my next post. You can just remove the down payment part of the equation for the flat and increase cases.

[an]

[quote=scaredycat]
also same logic applies to your flat 20% scenario, you’re not “subtracting the 20% you’re using it to make it seem like it was cheaper to live int he house than it was. it’s being show as a profit, the ‘negaitve” number isn’t a loss, it’s a “negative cost” of lviing there…[/quote]
You’re right about this one, you can add $66k to the FHA side and $62k for the conventional side for all the scenarios.

[quote=scaredycat]if im right on that, the numbers look more reaosnable to me. thenby putting 80k into the deal, you got a return on your 80k of 93k, about 110% over 8 years. Not bad but not as big as your numbers looked. so. what’s more likely to happen. a 20% rise in housing or a doubling of gold over the next 8 years? [/quote]
Also, it’s not as simple as just doubling in gold. The $93k is tax free, while $ you made from gold is taxable. How much that will hurt depends on your tax bracket. Then there’s also the ~$62k that you’ll save over 8 years from lower monthly payment. You have to subtract that and the income you’ll make from that in your gold equation. Assuming you don’t invest the $62k in savings and your tax bracket is 25%, your gold portfolio would have to triple in value in order to yield the save $93k return. $66k * 3 = $198k ($132k is taxable * 0.66 = $87k after tax). $66k + $87k – $62k = $91k.

It’s not $93k from the 80k but 93k from the $66k, since you also had to put down $14k in the FHA loan too.

[an]

[quote=scaredycat]
also same logic applies to your flat 20% scenario, you’re not “subtracting the 20% you’re using it to make it seem like it was cheaper to live int he house than it was. it’s being show as a profit, the ‘negaitve” number isn’t a loss, it’s a “negative cost” of lviing there…[/quote]
You’re right about this one, you can add $66k to the FHA side and $62k for the conventional side for all the scenarios.

[quote=scaredycat]if im right on that, the numbers look more reaosnable to me. thenby putting 80k into the deal, you got a return on your 80k of 93k, about 110% over 8 years. Not bad but not as big as your numbers looked. so. what’s more likely to happen. a 20% rise in housing or a doubling of gold over the next 8 years? [/quote]
Also, it’s not as simple as just doubling in gold. The $93k is tax free, while $ you made from gold is taxable. How much that will hurt depends on your tax bracket. Then there’s also the ~$62k that you’ll save over 8 years from lower monthly payment. You have to subtract that and the income you’ll make from that in your gold equation. Assuming you don’t invest the $62k in savings and your tax bracket is 25%, your gold portfolio would have to triple in value in order to yield the save $93k return. $66k * 3 = $198k ($132k is taxable * 0.66 = $87k after tax). $66k + $87k – $62k = $91k.

It’s not $93k from the 80k but 93k from the $66k, since you also had to put down $14k in the FHA loan too.

[an]

[quote=scaredycat]
also same logic applies to your flat 20% scenario, you’re not “subtracting the 20% you’re using it to make it seem like it was cheaper to live int he house than it was. it’s being show as a profit, the ‘negaitve” number isn’t a loss, it’s a “negative cost” of lviing there…[/quote]
You’re right about this one, you can add $66k to the FHA side and $62k for the conventional side for all the scenarios.

[quote=scaredycat]if im right on that, the numbers look more reaosnable to me. thenby putting 80k into the deal, you got a return on your 80k of 93k, about 110% over 8 years. Not bad but not as big as your numbers looked. so. what’s more likely to happen. a 20% rise in housing or a doubling of gold over the next 8 years? [/quote]
Also, it’s not as simple as just doubling in gold. The $93k is tax free, while $ you made from gold is taxable. How much that will hurt depends on your tax bracket. Then there’s also the ~$62k that you’ll save over 8 years from lower monthly payment. You have to subtract that and the income you’ll make from that in your gold equation. Assuming you don’t invest the $62k in savings and your tax bracket is 25%, your gold portfolio would have to triple in value in order to yield the save $93k return. $66k * 3 = $198k ($132k is taxable * 0.66 = $87k after tax). $66k + $87k – $62k = $91k.

It’s not $93k from the 80k but 93k from the $66k, since you also had to put down $14k in the FHA loan too.

[an]

[quote=scaredycat]
also same logic applies to your flat 20% scenario, you’re not “subtracting the 20% you’re using it to make it seem like it was cheaper to live int he house than it was. it’s being show as a profit, the ‘negaitve” number isn’t a loss, it’s a “negative cost” of lviing there…[/quote]
You’re right about this one, you can add $66k to the FHA side and $62k for the conventional side for all the scenarios.

[quote=scaredycat]if im right on that, the numbers look more reaosnable to me. thenby putting 80k into the deal, you got a return on your 80k of 93k, about 110% over 8 years. Not bad but not as big as your numbers looked. so. what’s more likely to happen. a 20% rise in housing or a doubling of gold over the next 8 years? [/quote]
Also, it’s not as simple as just doubling in gold. The $93k is tax free, while $ you made from gold is taxable. How much that will hurt depends on your tax bracket. Then there’s also the ~$62k that you’ll save over 8 years from lower monthly payment. You have to subtract that and the income you’ll make from that in your gold equation. Assuming you don’t invest the $62k in savings and your tax bracket is 25%, your gold portfolio would have to triple in value in order to yield the save $93k return. $66k * 3 = $198k ($132k is taxable * 0.66 = $87k after tax). $66k + $87k – $62k = $91k.

It’s not $93k from the 80k but 93k from the $66k, since you also had to put down $14k in the FHA loan too.

[an]

[quote=scaredycat]
also same logic applies to your flat 20% scenario, you’re not “subtracting the 20% you’re using it to make it seem like it was cheaper to live int he house than it was. it’s being show as a profit, the ‘negaitve” number isn’t a loss, it’s a “negative cost” of lviing there…[/quote]
You’re right about this one, you can add $66k to the FHA side and $62k for the conventional side for all the scenarios.

[quote=scaredycat]if im right on that, the numbers look more reaosnable to me. thenby putting 80k into the deal, you got a return on your 80k of 93k, about 110% over 8 years. Not bad but not as big as your numbers looked. so. what’s more likely to happen. a 20% rise in housing or a doubling of gold over the next 8 years? [/quote]
Also, it’s not as simple as just doubling in gold. The $93k is tax free, while $ you made from gold is taxable. How much that will hurt depends on your tax bracket. Then there’s also the ~$62k that you’ll save over 8 years from lower monthly payment. You have to subtract that and the income you’ll make from that in your gold equation. Assuming you don’t invest the $62k in savings and your tax bracket is 25%, your gold portfolio would have to triple in value in order to yield the save $93k return. $66k * 3 = $198k ($132k is taxable * 0.66 = $87k after tax). $66k + $87k – $62k = $91k.

It’s not $93k from the 80k but 93k from the $66k, since you also had to put down $14k in the FHA loan too.

[scaredyclassic]

YOU WROTE:

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

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

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

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)

WHAT DO YOU GET AS YOUR BOTTOM LINE FOR UP/DOWN FOR THE 6 DIFFERENT PERMUTATIONS

FHA/20%

20% LOSS/FLAT/20% UP?

[scaredyclassic]

YOU WROTE:

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

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

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

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)

WHAT DO YOU GET AS YOUR BOTTOM LINE FOR UP/DOWN FOR THE 6 DIFFERENT PERMUTATIONS

FHA/20%

20% LOSS/FLAT/20% UP?

[scaredyclassic]

YOU WROTE:

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

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

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

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)

WHAT DO YOU GET AS YOUR BOTTOM LINE FOR UP/DOWN FOR THE 6 DIFFERENT PERMUTATIONS

FHA/20%

20% LOSS/FLAT/20% UP?

[scaredyclassic]

YOU WROTE:

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

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

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

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)

WHAT DO YOU GET AS YOUR BOTTOM LINE FOR UP/DOWN FOR THE 6 DIFFERENT PERMUTATIONS

FHA/20%

20% LOSS/FLAT/20% UP?

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