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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: chic_hearne who wrote (115101)	6/8/2000 10:26:00 PM
From: tejek	Respond to of 1580673

Building equity in a home is the biggest farce. After 5 years I will have paid over $60,000 in mortgage payments, but increased my equity by far less than $10,000. chic, To preface my comments, before I did stocks, I did real estate development primarily but R.E. sales as well. Equity is more than the amount of principal you pay down. Its also the amount the property has appreciated while you have owned it. For an example if the house cost $100 k and it went up in value over 5 yrs to $150 k and you paid $5 k of the mortgage, you have $55 k of equity. PS- I just pulled out my amortization schedule. After 5 years I'll have worked down $6024.29 from my loan while paying $61,776 total. Great deal, huh? That's the amount of the principal you've paid in 5 yrs. Assuming you have a 30 yr, fixed rate mortgage, you pay mostly interest during the first 15 yrs of the loan and mostly principal on the back 15. The reason....banks want their money as soon as possible. In addition in another post, you mentioned credit checks and how they can hurt your credit. They only hurt your credit if you credit is questionable and you have a lot of turndowns. For an example I have a lot of credit checks on my account...I do my own from time to time..but my credit is generally good so no one complains. The main reasons you were turned down for overdraft protection are your age...your bill paying experience is limited; you had just taken on a mortgage, a big responsibility and a drain on your finances...the bank mostlikely will not acknowledge that you have roommate income in their calculations; and its a fairly conservative lender. They used the excuse of the number of credit checks to blow you off. If credit checks alone screwed up one's credit, none of us would get credit. ted

To: chic_hearne who wrote (115101)	6/8/2000 11:05:00 PM
From: Dan3	Read Replies (2) \| Respond to of 1580673

Re: After 5 years I will have paid over $60,000 in mortgage payments, but increased my equity by far less than $10,000... Don't forget the avoided rental cost. And don't forget to deflate your mortgage costs by the tax savings from interest and property tax deductions. Then remember that equity appreciation of your down payment was leveraged by whatever you borrowed. And finally, remember that any capital gains on that leveraged asset will not be taxed. Regards, Dan (who wishes he'd owned a house at 23!)

To: chic_hearne who wrote (115101)	6/9/2000 11:55:00 AM
From: pgerassi	Read Replies (2) \| Respond to of 1580673

Dear Chic: I assume you "forgot" to remove from your payments the amount you paid for Property taxes and "Usage" fees paid by the bank to the government (school, city, state, etc.) as it is usually setup by most people? This would be somewhere around 10% to 20% of your homes worth in 5 years. Please indicate if this was the case (and if you want to, the amounts paid). I think the smart people are the ones who rent, and use the difference to gain equity through the financial system (stocks, bonds, and money markets). Pete