Essential Economics for Politicians
- Thread starter Bruddah IZ
- Start date
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- Tags
- finance too
Question: assume I have a $3m weekend home that I love. I put $1m down and borrowed the rest as a traditional mortgage. My monthlies are $7500 per month. The house, after almost 2 years, worth maybe 3.15m. I can’t rent it out because I use it too much.
Should I have not bought the house? Should I have bought it via some other available method?
Please advise, if you will...
Hüsker Dü
DA
No, you answer questions with either questions or deflections, it's what you do.
If that's true, he surely learned it from your father figure espola...
Bruddah IZ
DA
I know I’m in for a good one when you start with “assume”. Lol!!
Bruddah IZ
DA
Just to be clear, I quote: “rent it out because I (you) use it too much”?
Bruddah IZ
DA
Should I also assume an interest rate? Are you drinking?
Bruddah IZ
DA
First of all, no traditional mortgage bank will give you a loan for 2.11%.
Not drinking. Yes I use it on the weekends all the time. Interest rate really low (that's why total payment is only $7500 on 2 mil.), but wasn't conservative and only fixed for 7 years total.
Bruddah IZ
DA
That’s how I know the subject is often above you and your non-reading dad. What a legacy.
I don't think it's only 2.11. Did you run it? I know I pay max. 8K (as I have told you, I have 2 mortgages; they total $15K per month) and this one is fixed for only 7 years.
Bruddah IZ
DA
So much for your scenario’d “traditional mortgage”. Lol!!
Bruddah IZ
DA
Oh I didn’t know I was supposed to assume the above as well. Lol!!! Keep tap dancing poser.
So as I thought, you understand that in this case, as in so many, the traditional amortized mortgage is the way to buy a house. Yet you criticize it so much. I get to have a house I love and will ultimately sell it at a profit. Do you think I should be renting it instead of having bought it? Houses in that neighborhood rent for about 12-15K per month.
(I will tell you something else you won't believe. I made a deal to buy this house before it was built. I approved designs and finishes and square footage but otherwise let the developer do his thing. I didn't have to pay him until he delivered me the keys two years later).
Bruddah IZ
DA
What I realized is that your definition of traditional mortgage has no place in reality. Of course I ran the numbers Bozo. Again, you’re not getting a traditional loan at 2.11%. Banks lend to each other at 2.42% as of yesterday. That shit might have flown in 08 with the QE counterfeit river flowing for 6 straight years. But not anymore. But I will tell you that banks love rich guys that love stretching their loans out. Time value of money is what really matters.
Happy to show you my mortgage statements.
I agree with your last sentence. Using all that valuable money now for other purposes when it's worth more, while I pay so little to keep my house which appreciates and I love, totally works for me.
Sounds like it doesn't work for you.
Here let's start with the basics :
Purchase price of said house is $ 3,000,000.00
You plopped down $ 1,000,000.00 ....
Financed the bal of $ 2,000,000.00.....
What rate are you at ?
What is your Net Income ?
What is your Gross Income ?
What additional expenses have you " saddled " yourself with ?
( Cars, Planes, Boats..Etc...)
What are your monthly basic living expenses ?
Are you self employed ?
( If so, do you purchase thru an LLC or by " Personal. )
or
Are you employed ?
Are you married ?
Are you claiming your " Spouses " income as additional ?
Do you have savings ?
Do you have kids ?
Hypothetically we will go with the " Low " rate to date of 3.5 %
Financing $ 2,000,000.00 at 3.5 % = $ 70,000.00 annually
With the Principal diminishing each year the amounts change
Now we will assume you do it for 15 years
You state your monthlies are $ 7,500.00
( Is that one House, 2 Houses, 3 Houses, Houses + expenses ? )
You see " Messy " your numbers Just don't add up.....( See Below )
...........................................................................................
What is your " Credit Profile "..?
We will assume it is 720 or above ....
At 15 years your monthly would be $ 14,580.98
Your interest would be $ 573,577.15 @ 15 years
Your total paid would be $ 2,624,577.15
@ 30 your monthly would be $ 9,264.23
You need to explain your " Messy " Math " Messy ".............
I'm being Very Very Polite here " Messy "..........
You don't need to show us ANY monthly statement.......
What you need to do is explain your " Messy " Math .......
I'll still be Very Very Polite................
What does “the amounts change” mean? Does it mean you are not aware that the monthly mortgage payment amount remains the same?
At 3.5% for 30 years, the monthly mortgage payment is always $8900 or so. I lay much less than that, but I’m only fixed for 7 years. Are you being serious? And why are you asking so many irrelevant questions?