csc@pyuxjj.UUCP (C Clinger) (11/20/85)
In reference to the discussion on how much to put down on a new house when selling a house. The appreciation rate of the new home should have no affect on the decision. Simply put, all the increase in value of a house you purchase (whether it is 80% financed or wholly owned) is yours. When you sell a house you get the purchase price less the amount remaining on the mortage. Thus is doesn't matter wheather you put the money down up front or pay off the mortage at the time you sell the property. For the purist's in the crowd --- whether you put more down on the house will affect your return on investment percentage when you sell the house since the less you put down on the property the higher the percentage of growth on your investment. (ex. you purchase a home for 100K and sell it for 200K; if you put down 10% (10K) you net 110K or 110%; if you put down 50K, your net 150K or 33% ) Corey Clinger bellcore!pyuxjj!csc
mazlack@ernie.BERKELEY.EDU (Lawrence J. &) (11/23/85)
>In reference to the discussion on how much to put down on a new >house when selling a house. The appreciation rate of the new >home should have no affect on the decision. > >Simply put, all the increase in value of a house you purchase >(whether it is 80% financed or wholly owned) is yours. When > >For the purist's in the crowd --- whether you put more down >on the house will affect your return on investment percentage >when you sell the house since the less you put down on the >property the higher the percentage of growth on your investment. >(ex. you purchase a home for 100K and sell it for 200K; if you >put down 10% (10K) you net 110K or 110%; if you put down 50K, >your net 150K or 33% ) > Well, maybe this analysis is a little over simplified. Your return on investment should also include your money cost. Without resorting to formulas, if the rate of inflation is GREATER than your money cost, you have POSITIVELY leveraged your investment. If the rate of inflation is LESS than your money cost, you now have NEGATIVE leverage. The same principal applies when buying stocks on margin. ...Larry Mazlack