question about mortgage and if i sale my house

[TheSiege]

so i paid 140k for my house

so lets say in 5 years i want to sell my house.

as it stands right now in 5 years i would have about 42k paid in interest and about 9k paid to principle.

so i sell my house and pay off the loan. would part of that 42k paid in interest go to the principle since my loan is now a 5 year loan and not a 30 year loan?

 

[Ns1]

Originally posted by: TheSiege
so i paid 140k for my house

so lets say in 5 years i want to sell my house.

as it stands right now in 5 years i would have about 42k paid in interest and about 9k paid to principle.

so i sell my house and pay off the loan. would part of that 42k paid in interest go to the principle since my loan is now a 5 year loan and not a 30 year loan?

that 42k will go to the stockholders of your mortgage company

your loan doesn't turn into a 5 year loan

you paid off your loan early

 

[mugs]

No. You pay off interest as it accrues. All of the interest that you will have paid will have already accrued, so it's money you owed.

 

[TheSiege]

but thats amortized off a 30 year loan isn't it? so i still have to pay 30 years worth of interest?

 

[SuperjetMatt]

You paid 5 years worth of interest, NOT 30.

 

[Ns1]

Originally posted by: TheSiege
but thats amortized off a 30 year loan isn't it? so i still have to pay 30 years worth of interest?

that is incorrect

your interest payment = balance * interest rate. ALWAYS. 30 years is just how long it takes you to pay off your loan at whatever interest rate

 

[Lorax]

131k left on your house.

you never see the interest payment again, except when it's tax time.

 

[TheSiege]

ok so lets say i do sell my house for 170k my principle would be down to 131k so i would end up making 39k total? and that would be it

 

[Ns1]

Originally posted by: TheSiege
ok so lets say i do sell my house for 170k my principle would be down to 131k so i would end up making 39k total? and that would be it

more or less, not including selling costs

170 - loan payoff amount (131k) - selling costs = profit

 

[TheSiege]

ok. so how accurate is zillow.com?

 

[waggy]

Originally posted by: TheSiege
so i paid 140k for my house

so lets say in 5 years i want to sell my house.

as it stands right now in 5 years i would have about 42k paid in interest and about 9k paid to principle.

so i sell my house and pay off the loan. would part of that 42k paid in interest go to the principle since my loan is now a 5 year loan and not a 30 year loan?

wait you paid 42K in interest so far?

 

[TheSiege]

5 years from now it would be that

 

[Jugernot]

Originally posted by: TheSiege
so i paid 140k for my house

so lets say in 5 years i want to sell my house.

as it stands right now in 5 years i would have about 42k paid in interest and about 9k paid to principle.

so i sell my house and pay off the loan. would part of that 42k paid in interest go to the principle since my loan is now a 5 year loan and not a 30 year loan?

What the hell are you talking about....

You don't get anything for interest... it goes to the mortgage company 100%. The 9k you've paid is what you have paid off. You still owe $131k.

Why would you think your 30 years mortgage turns into a 5 year?

 

[ElFenix]

Originally posted by: Jugernot

Originally posted by: TheSiege
so i paid 140k for my house

so lets say in 5 years i want to sell my house.

as it stands right now in 5 years i would have about 42k paid in interest and about 9k paid to principle.

so i sell my house and pay off the loan. would part of that 42k paid in interest go to the principle since my loan is now a 5 year loan and not a 30 year loan?

What the hell are you talking about....

You don't get anything for interest... it goes to the mortgage company 100%. The 9k you've paid is what you have paid off. You still owe $131k.

Why would you think your 30 years mortgage turns into a 5 year?

no no no, he's right, the bank will put him in arrears because he's been underpaying for the last 5 years.

 

[waggy]

im just in shock in 5 years he pais 42K in interst bu tonly 9k in principle. that just seems wrong.

 

[Ns1]

Originally posted by: waggy
im just in shock in 5 years he pais 42K in interst bu tonly 9k in principle. that just seems wrong.

Nah, I just ran it through my TV program

30 years @5%, 140k mortgage

after 5 years, he would pay approximately 35k in interest and 12k in principle (approx), so iit seems pretty reasonable to me

 

[TheSiege]

yeah i pay 6.38 interest right now

 

[IronWing]

Originally posted by: TheSiege
ok. so how accurate is zillow.com?

It depends.



Wasn't that helpful? If you live in a stable, built out neighborhood with houses selling at a steady rate, then zillow can be pretty good. It is terrible if you live in a changing neighborhood. For example, I own an older house in an area undergoing rapid growth (at least until about three months ago [pop!]). Zillow's formula uses the rate of change in the median house price for an area and applies that rate to the last known sale price for your house. Because the newer houses in my hood are so much bigger than what was built in earlier boom cycles, the median price shot up so the rate of increase zillow applied to my house was ridiculous. Last year, according to zillow, my house was increasing in value by 9%/week.

 

[JS80]

Originally posted by: waggy
im just in shock in 5 years he pais 42K in interst bu tonly 9k in principle. that just seems wrong.

What's more wrong is that the bank lent him that much money without him understanding the concept of interest.

 

[Jadow]

amen for my 30year locked mortage at 5.4%!

After the tax deduction, I'm paying about 4% on that money.

No way that's getting paid off early.

 

[FP]

Originally posted by: Ns1

Originally posted by: TheSiege
ok so lets say i do sell my house for 170k my principle would be down to 131k so i would end up making 39k total? and that would be it

more or less, not including selling costs

170 - loan payoff amount (131k) - selling costs = profit

Not really.

If you really want to see your net profit you need to calculate the interest you paid into the equation. If I own a house for 30 years and can sell it for $500k more than I bought it for I really haven't made anything if I paid $1 million in interest over those 30 years.

But, you do have to live somewhere so my advice to the op is to figure out if you can afford your house payments. Buy a house to live in, not as an investment vehicle because it really isn't. It is a liability not an asset*.

* unless you own it outright and are rich.

 

[waggy]

Originally posted by: JS80

Originally posted by: waggy
im just in shock in 5 years he pais 42K in interst bu tonly 9k in principle. that just seems wrong.

What's more wrong is that the bank lent him that much money without him understanding the concept of interest.

don't they have to explain it in detail? i know they did for us each time.

 

[DeadByDawn]

Originally posted by: JS80

Originally posted by: waggy
im just in shock in 5 years he pais 42K in interst bu tonly 9k in principle. that just seems wrong.

What's more wrong is that the bank lent him that much money without him understanding the concept of interest.

:laugh:

 

[Ns1]

Originally posted by: binister

Originally posted by: Ns1

Originally posted by: TheSiege
ok so lets say i do sell my house for 170k my principle would be down to 131k so i would end up making 39k total? and that would be it

more or less, not including selling costs

170 - loan payoff amount (131k) - selling costs = profit

Not really.

If you really want to see your net profit you need to calculate the interest you paid into the equation. If I own a house for 30 years and can sell it for $500k more than I bought it for I really haven't made anything if I paid $1 million in interest over those 30 years.

But, you do have to live somewhere so my advice to the op is to figure out if you can afford your house payments. Buy a house to live in, not as an investment vehicle because it really isn't. It is a liability not an asset*.

* unless you own it outright and are rich.

Technically you are correct. But for the purposes of this discussion, and the way the OP understands it, 170 - loan payoff - selling costs = profit

 

[FP]

Originally posted by: Jadow
amen for my 30year locked mortage at 5.4%!

After the tax deduction, I'm paying about 4% on that money.

No way that's getting paid off early.

Your mortgage deduction drops you into a lower tax bracket?