amortization vs appreciation?

When will my property be worth what I owe???

Click Here to pull up an easy to use workbook where you can enter your original loan amount and terms (first and second mortgage if applicable) as well as the current market value of your home. The pages will calculate the amount of interest paid, the balance of your loan, etc. You will be able to see where the balance will be in 1, 2, 3, 4, 5, 6, 7, 10, 15, 20, 25, 30, years (what ever number of years you want). Then you can go to the appreciation calculator page of the work book to see how long it will take for your property to appreciate (based on a modest 3% rate each year). When you compare how your loan balance is decreasing to how your property value is increasing, it will help you determine when your property will be "worth what you owe on it".
You can also enter your age, your co-borrower's age as well as up to 3 dependents to see how old you and they will all be when your property is once again "worth what you owe". If you have any questions on how to use the workbook, please feel free to email me, or give me a call at 702-812-6929

Here's an example:
Let's say that your purchased a property in 2006 for $200K. You used 80/20 financing and the first mortgage is a 30 year fixed rate loan for $160K at 6%. The second loan is a 25 year fixed rate loan for $40K at 8%. The property is now worth $100K. We will assume we are seeing 3% appreciation (we are not yet, but there's always hope). The loan amounts will go down as the years go on, and the value will increase as the years go on. The point where these two issue intersect (in this case) will be approximately 2022 (12 years from now). This is the point in time where the property will be worth enough money to sell it and payoff the remaning balance of the loan(s) as well as cover your closing costs as a seller). There will not be much left over (less than $10K). Do you have 12 years to wait? Are you going to be retiring? What if something happens before then? Do you realize that by the time 2022 rolls around, you will have "invested" $268,199 (principal & interest) for a property that you are scraping out from under?

You can enter your loan amount(s), your interest rate, the year you "started" your loan(s), the terms (number of years of financing), the current market value of your home (if you would like some help figuring out what this might be, please email me or call me at 702-812-6929), the appreciation rate, the ages of the borrowers and the dependents.

This is not meant to depress you, it is meant to make you aware. This is probably the question that I am asked most often, "when is my property going to be worth what I owe?" Now you will be able to figure this out for your individual situation. The only question mark in the equation is what is the appreciation rate (or is there an appreciation rate)?
Please note: The amortization schedules are set up to work for fixed rate regular loans. If you have an interest only loan, your loan balance will not be decreasing, so the only thing you will need to use is the appreciation worksheet. If you have an "option ARM" your loan balance may have actually been increasing, so the amortization schedules will not work for your situation. All the more reason to consider your options for the future.
        Time really is money...