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From: tbul@trsvax.UUCP
Newsgroups: net.invest
Subject: Re: Mortgage payments question - (nf)
Message-ID: <52900025@trsvax.UUCP>
Date: Thu, 6-Sep-84 13:16:00 EDT
Article-I.D.: trsvax.52900025
Posted: Thu Sep  6 13:16:00 1984
Date-Received: Thu, 13-Sep-84 07:25:55 EDT
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Nf-From: trsvax!tbul    Sep  6 12:16:00 1984

#R:opus:-76000:trsvax:52900025:000:1332
trsvax!tbul    Sep  6 12:16:00 1984

< Upgrade your VAX to a TRS-80 >

There are several things to consider.  First, with all the fuss about a
flat tax system, you may NOT be able to deduct those interest payments.
That's a sure pity for people who love to borrow.

Next, if you want to buy a house and intend to sell it soon, put little
down payment and don't pay ahead.  That way you get maximum leverage on
your money.  For example:

case 1: cost of house $10,000
	down payment    2,000
	sell house for 11,000

	You've made a $1,000 profit on a $2,000 investment - that's 50%

case 2: cost of house $10,000
	down payment    5,000
	sell house for 11,000

	You've made a $1,000 profit on a $5,000 investment - that's 20%

In case 1 above, you maximize your leverage and get a high rate of return.
Please note that should you sell your house for less than what you bought
it for, that leverage would work against you in the same way.

If you plan to keep your house forever and ever (and then some), make as large
a down payment as you can and try to prepay as much as possible.  In this way,
you will pay corresponding less interest because you principal is smaller.
Of course, your loan agreement must let you prepay...

			Thomas Bulkowski


"Find an aim in life before you run out of ammunition." - Arnold Glasow
allegra!convex!ctvax!trsvax!tbul  Fort Worth, Texas