Bruddah IZ
DA
No. You assumed I took 10 years to pay it off. I didn’t.
Essential Economics for Politicians
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Bruddah IZ
DA
In addition, it took you ten years to get access to the additional 250k in equity. You gave me the terms to get it in one day. In reality, the bank only lends 70% CLTV on HELOCS. So my HELOC could only be for 100k for the 500k valued house. But you already knew that. Lol!
Im glad you mentioned that, because that brings us to the next level of your flawed analysis.
When you spent that extra dollar on that house, earlier than required by the loan, what did that “buy” you? It bought you more ownership of something that appreciated, say, 3-4% per year?
I obtained the same appreciation without spending that dollar. That’s my win #1.
Furthermore, I took that extra dollar that you used to buy more equity in the house and instead I invested it in a bond and/or an equity which, based on my last 20 years or so, earned me 7%. That’s my win #2.
See how simple that is? It’s not that you’re dumb, you’re not. You’re (a) overly concerned about the other side of the transaction (I like win/win), (b) overly complicated in your thinking and (c) fearful.
See above. You’re too complicated, son.
Bruddah IZ
DA
Oh and Btw, you don’t own the equity if you’re asking the bank to borrow it. At a cost that is.
Bruddah IZ
DA
Soooooo simple. I didn’t pay a cent of the 41k in interest that you paid on your amortized loan and got access to an additional 250k to buy another house in addition to the 3 to 4 percent appreciation on the first house.
Bruddah IZ
DA
You find that complicated? Lol! Thought you were the HELOC King. Poser.
Bruddah IZ
DA
Funny how you consider paying 41k in interest a win. And don’t forget that whopping 4k a year deduction. Lol!
Bruddah IZ
DA
Uhhhhh.......your #1 win of 41k in amortized interest cancelled out your #2 win because you were actually paying interest on your amortized loan in excess of 7% percent for the first 7.5 years of your 10 year loan. Lol!
Bruddah IZ
DA
This is our most classic exchange yet.....SON. Are we done here? Off you go to make your millions. Lol!! Fries U! What a deal.
Bruddah IZ
DA
Silence
Hüsker Dü
DA
Some people do work at their jobs.
Bruddah IZ
DA
Agree.
You’re too complicated, son.
I already showed you how my mortgage was better than your HELOC if you paid off over the term of the loan...by a lot.
Then I showed you how using my money for purposes other than buying into the house is a much better investment.
But you still don’t understand.
This is why I do well and you play the $2 tables.
You think you have it figured when everything you said was the wrong way to make dough. But you’re obviously convinced...so I can’t help you, son.
And trust me, you don’t want to make a comparison...
This " Guy " know as " Messy " Financial is a complete loon.....
He's quite blatantly using one financial " Loan " source to pay off another " Loan "
source and explain it away with Voodoo Logic....
Hence his deserved name " Messy " Financial.....
Bruddah IZ
DA
Too late.
You definitely win the prize for this one, though.
“If I pay into my house the 250K, then I will have more equity in my house to borrow against.”
Instead of using that 250K somewhere else in the first place and not going into debt for it?
Classic confusion.
“KISS.” Keep it simple, son.
Bruddah IZ
DA
Youʻre the only one having difficulty son.
You’re an idiot. You pay off a house so you can then borrow the money you just paid in? Did you really say that?!!!
14 posts above, as a reminder for all to see.
Instead of paying deductible interest on your loan, you would pay off a house so you could then borrow that same money against the house, at non-deductible interest.
You win!