Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: anializer who wrote (37170)	3/29/2010 4:29:35 PM
From: Jurgis Bekepuris	Respond to of 78748

Fair enough. I had lots of fun calculating exactly what happens in these two cases. As I said, I found it counterintuitive at first too, so I really wanted to be sure I am getting correct results. Interestingly enough, it also means that balloon loans (mortgages) may be great in certain cases, assuming that interest rate is good and one has enough capital to pay balloon at the end (otherwise there is a huge risk of bad rate refinancing at the end that may eat all your profit from balloon loan). Anyway, good luck. :)