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Don't see too many people comment on the accelerated equity one builds when buying with a low interest rate mortgage. @3% you've amortized down to 89% at five years and 76% at ten years compared to 93% & 84%
with the 6% loan of a few years ago. Low interest rates really accelerate principal paydown even without optional prepayments.
just a few penny more on a dollar, you are such a good saver
First off ppl should make money by 'working'. So stfu Riversider.
2ndly 'earning' and 'investing' in whats rightfully an 'expense' is akin to subsidizing sugary drinks or smoking.
Why don't we let you invest in stocks with 30yrs fixed loans against apple shares? With historically low rates, you'll be building equit quicker!
Just fking shove that cream cheeses down your gullet quicker. Send me the bill at w67. I'm sure my $1mm in sprint gain can support a few extra pounds of cream cheese.
That could also read as the "accelerated loss of tax deduction" that you had used to justify a higher price.
That tax deduction is false, based on higher monthly payments. Per $100,000 borrowed the 3% payment is 421.60 after vs $600 @ 6%. The tax deduction does not make up for owing a higher payment to begin with.
The slightly accelerated equity accrual pails in comparison to the principal risk should rates return to normal levels.
Over 30 years per $100k one is making an extra over $64,000 in mortgage payments some of which may not be fully deductible. That is certain and more than compensates for the potential of principal risk and is additionally compensated for by paying back the mortgage in inflation adjusted dollars.
It is definitely not "certain". Very few mortgages last 30 years.
Macro-economically we are in a liquidity trap. There is significant deflationary risk and purchasing a depreciating asset with borrowed money will end poorly in all cases, no matter the amortization schedule.
usq, Couple of points. When we talk deflation we're speaking of a contraction of credit. The price level is not falling.
No, no, no, usq. Hyperinflation is just around the corner. Just ask riversider. He said so, years ago.
"When we talk deflation we're speaking of a contraction of credit. The price level is not falling."
The Spanish and Las Vegas real estate markets will be relieved to hear this. Nothing a shot of liquidity can't fix, eh?
Sprint back in the 4's
OH NO!!!!!!!!!!!!..SPRINT's at $4.... what will I DO? OH NO..what will I DO (sobbing uncontrollably).......... OH... you mean $4.88... closer to $5... .and way way way up from $2.40.... which is 100%+ gain in 4 months...
I SHOULD JUST JUMP OFF A BRIDGE or BECOME A RE BORKER.
OR MAYBE I SHOULD JUST SELL MY NOV 2012 $3 strike put options... WTF WILL I EVER DO to HEDGE MY $1MM gain... BTW MY AUGUST 200K share august $3 put options expired worthless......... $45K puff.... up in flames... gone .... But that's like crying over the condom bills on the amex card when it comes due 30 days later....
U THINK ME A FINANCIAL RETARD? WHO WOULD BUY A BUBBLE ASSET AT PEAK 2007 PRICES WITH 10x LEVERAGE WITH A $2MM 3% 30year MORTGAGE AND $200K IN MY ENTIRE LIFE SAVINGS AND SIGN UP MY SPOUSE AND MY KIDS' FUTURE FINANCES to SAY I "OWN?"
YEP SPRINT at $2.40/share IS SO SO SO MUCH RISKIER THAN BUYING NYC RE in 2007-2014..........
Shall I SELL and lock in my $890K...
I Bought IT BACK...
I SHOULD SELL...
OH FK... IT"S A BUY... BOUGHT IT BACK....
WHAT AM I THINKING >>>
SOLD!!! $890K PROFIT IN 4 months...
LET THIS BEYTCH ROLL!... back IN!
WAIT A MINUTE.... I'M GONNA LOSE MY SHIRT IN TRANSACTION COSTS!!!! W67 BETTER STOP THIS INSANITY... I MEAN MY INDECISIVENESS ABOVE COST ME $40.
FKTARD... 375K shares... I'M LONG SPRINT TILL IT HITS $10/share.
Hold on a minute, Riversider. *High* interest rates mean *low* selling prices, which means -- assuming you plan to pay down your mortgage aggressively every month -- you'll get done a lot faster than if you were paying off a larger loan.
W67: "like crying over the condom bill" Awesome.
> accelerated equity one builds when buying with a low interest rate mortgage
Doesn't come close to making up for the lack of equity building when you overpay. You could have 0% interest, and not build equity.
"Building equity" has been so misused, it is nearing old wives tale status...
makes way too much sense