What if it doesn’t collapse?

[sdrealtor]

gotcha, jus checkin

[bubba99]

I agree that it will look better, but not that good.

Say our renter is able to save $100k as a down payment.

Then our $400k mortgage becomes $300k at 8% which is $25k in payments/year.

Our $790k mortgage becomes $690 at 4% which is $28.75 in payments per/year.

Without considering tax impacts, this is a savings of only $3750/year or 13% Not an earth shattering amount for a price reduction of almost 50%.

Double the down payment, you get a 32% payment reduction, which does begin to look better, but not as good as many would expect.

[bubba99]

I agree that it will look better, but not that good.

Say our renter is able to save $100k as a down payment.

Then our $400k mortgage becomes $300k at 8% which is $25k in payments/year.

Our $790k mortgage becomes $690 at 4% which is $28.75 in payments per/year.

Without considering tax impacts, this is a savings of only $3750/year or 13% Not an earth shattering amount for a price reduction of almost 50%.

Double the down payment, you get a 32% payment reduction, which does begin to look better, but not as good as many would expect.

[bubba99]

I agree that it will look better, but not that good.

Say our renter is able to save $100k as a down payment.

Then our $400k mortgage becomes $300k at 8% which is $25k in payments/year.

Our $790k mortgage becomes $690 at 4% which is $28.75 in payments per/year.

Without considering tax impacts, this is a savings of only $3750/year or 13% Not an earth shattering amount for a price reduction of almost 50%.

Double the down payment, you get a 32% payment reduction, which does begin to look better, but not as good as many would expect.

[JWM in SD]

“Our $790k mortgage becomes $690 at 4% which is $28.75 in payments per/year.”

I guess you haven’t heard the news about the credit crunch Bubba???? Good luck getting a $690K mortgage at 4% in the next several years.

[JWM in SD]

“Our $790k mortgage becomes $690 at 4% which is $28.75 in payments per/year.”

I guess you haven’t heard the news about the credit crunch Bubba???? Good luck getting a $690K mortgage at 4% in the next several years.

[JWM in SD]

“Our $790k mortgage becomes $690 at 4% which is $28.75 in payments per/year.”

I guess you haven’t heard the news about the credit crunch Bubba???? Good luck getting a $690K mortgage at 4% in the next several years.

[no_such_reality]

Our $790k mortgage becomes $690 at 4% which is $28.75 in payments per/year.

Let’s use rates representative of the market from ’05 to present.

At 5.5%, about where long term fixed rates bottomed out for financing, the payment on $690K is $47K a year. Taxes are $7.9K a year. Total $54.9K a year.

At 8%, the $300K mortgage is $25K and property taxes $4K. For a total of $29K a year.

Granted, $54.9K isn’t double $29K, but it’s close enough in my booked.

[no_such_reality]

Our $790k mortgage becomes $690 at 4% which is $28.75 in payments per/year.

Let’s use rates representative of the market from ’05 to present.

At 5.5%, about where long term fixed rates bottomed out for financing, the payment on $690K is $47K a year. Taxes are $7.9K a year. Total $54.9K a year.

At 8%, the $300K mortgage is $25K and property taxes $4K. For a total of $29K a year.

Granted, $54.9K isn’t double $29K, but it’s close enough in my booked.

[no_such_reality]

Our $790k mortgage becomes $690 at 4% which is $28.75 in payments per/year.

Let’s use rates representative of the market from ’05 to present.

At 5.5%, about where long term fixed rates bottomed out for financing, the payment on $690K is $47K a year. Taxes are $7.9K a year. Total $54.9K a year.

At 8%, the $300K mortgage is $25K and property taxes $4K. For a total of $29K a year.

Granted, $54.9K isn’t double $29K, but it’s close enough in my booked.

[Author]

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