(ab)using mortgage to profit

This shit is always funny because I know that doesn't work. If you look at it at first read, that shits mind blowing, but then actually working it out, it makes you feel stupid. Still funny.

You could do it, but there are four obvious things that could fuck you.

1. Housing prices go down
2. Stock market crash
3. Your brother takes cash, and lives rent free, and fucks you.
4. If you actually transferred the property back to his name, and had mortgage under your name, they can call your loan (ie. force you to pay whole balance or foreclose)

Wouldn't you have to pay taxes and lose like a fourth of that money?

I'm sorry but you're retarded Veeky Forumsnesswise if you don't immediately see that paying $30 for a box containing $20 (and your own money) is a bad deal. Maybe find another hobby.

Just kill yourself lmao holy shit just fuckin end it dude

?

>Any time I want to I can pay back the mortgage at once if the index find goes bad
How? If index loses 50% you only got $50k.

Retard. So long as your investment is returning a higher % than the interest rate it doesn't matter if you're paying 100% interest and 0% principle.

yes, if you have an investment paying more than 100% interest it would work.

You think your home is going to increase in 8k in value every year for eternity? Once your housing market hits a bubble youre fucked you fucking shit wit. I'm guessing you either made this up our you truly are fucked

well that's the glory of it, I decide what my salary is at the end of the year, so if my home didn't go up in value I don't cut my salary.

if it did go up I just take the value of the increase and reinvest it into my business tax-free. My business may or may not increase in value, but if it does I don't have to pay taxes on that increase until I sell it.

the only real downside is I'll owe some taxes and recaptured depreciation when I sell my house, but it's better than the rate I'd pay on income.

also my house is still at only 50% of the value of neighboring towns. So if we assume there's no particular reason why our local market is depressed,
my house will probably keep going up about $10k per year for the next 20 years just to catch up with neighboring communities.

that's assuming their property value doesn't increase in 20 years at all, an unlikely bet.

I can probably keep right on pulling $8k per year out of the bitch for the rest of my life.

100k loan @ 5% interest
100k investment @ 8% return

3% gain.

Once you want out, sell the house, pay the mortgage breakfees with the capital gains you made (if you bought smart), or utilise the gains you made on your investment.

Are you a brainlet?

I'm gonna use this on people, It's cute.

>Are you a brainlet?
here, let me try to explain

your mortgage has a rate OVER THE LIFE OF THE MORTGAGE.

however you don't start off paying that rate, you pay A MUCH HIGHER RATE the first few years, about that rate in the middle, and a much lower rate at the end.

So if your payment is $1k per month and THE FIRST YEAR ALL OF THAT $1K GOES TO INTEREST,
and
THE LAST YEAR ESSENTIALLY NONE OF THAT $1K GOES TO INTEREST,

YOU ARE IN FACT PAYING A MUCH MUCH HIGHER INTEREST RATE AT THE BEGINNING OF THE LOAN.

So yes, if you stay in the loan for 30 years you could beat the rate. Hell, you might beat it at 20 years in.

but unless that's what you're doing you're going to need a hell of a lot more than 8% to profit.

in fact your best bet would be to invest your money in someone else's new mortgage, but then you'll only break even.

Either you're a fucking retard, or your country is fucking retarded. Judging by your use of capital letters I'm guessing its the former.

I literally have a mortgage right now with a locked in interest rate of 4% for 2 years, with a mortgage lifetime of 30 years. I'm literally only paying 4% interest. That is 100% interest repayments, not principle.

I'm gaining much more than that 4% from my investment.

Once I decide to sell the house (probably within the year), I pay the break fees (minimal), gain capital gains, and gain $ from my investments.

>I'm literally only paying 4% interest. That is 100% interest repayments, not principle.

If I'm understanding you correctly you're paying 30 years worth of interest in 2 years, right? 100% interest, 0 principle?

so your investment doesn't need to make 4%+, it needs to make 30 times that.

correct me if I misunderstand the terms of your loan.

>I'm gaining much more than that 4% from my investment.
Until the stock market crashes. I'm not saying it will happen soon, but it might happen.

Do you not understand mortgages at all?

Yes, that's the risk, or the property market crashes. Both are unlikely here.

ah, you took an interest only loan. got it.

that would work, assuming you either change houses every few years or are borrowing against somebody else's home.

or interest rates go up. somewhat more likely.

Mate, it makes no difference regardless of a P&I loan or a pure interest loan. You don't magically pay more than the advertised percentage, unless there is something truly fucked with your system.

5% rate on P&I - Yes, at the start ~90% of my repayments will be interest only, 10% principle, but I'm still only paying 5%.

They don't jump percentage points overnight. It'll be sold long before then.

yeah, you're right. I'm wrong.
thanks, I learned something today.

So gracious. Sorry I sperged out at you before, shitty day.

no worries I sperged right back.