Re:Renting is Throwing Money Away, Right? (2015)
by lmm on Monday April 23, 2018 @12:27PM
(#16904861)
> You haven't really gained 100k. You have gained 100k multiplied by your percentage of equity, i.e. the amount you have paid so far into your mortgage principal. Assuming it's a 30-year mortgage, that will be around 30%, so around 30k.
No, you've gained 100k. Your asset is worth $300k, your mortgage liability is $160k minus however much you've paid off; your book value is $140k (plus a bit) where before it was $40k. The bank may "own" the other 70% of your house but they don't get to increase your loan amount because it's gone up; you pocket 100% of the rise in the house's value (unless you end up defaulting on the mortgage).
Re:Renting is Throwing Money Away, Right? (2015)
by aoeusnth1 on Monday April 23, 2018 @01:21PM
(#16905441)
That's not at all how selling a house works. When the price of your home changes, you pocket or lose the entire difference when you sell it. Your loan amount doesn't change with the housing market.
You haven't really gained 100k. You have gained 100k multiplied by your percentage of equity, i.e. the amount you have paid so far into your mortgage principal. Assuming it's a 30-year mortgage, that will be around 30%, so around 30k.
(And of course, the house price doubling in 10 years is a bit unrealistic unless you live in a booming area.)