Re: O/T can it be done

Posted by 8N'r--WI on January 11, 2007 at 20:55:42 from (65.29.177.100):

In Reply to: O/T can it be done posted by old on January 11, 2007 at 10:21:26:

Old, I believe your buddies goal is to buy a 70k house and keep his 100k intact. If his plan is to take a 30 year mortgage, make the principal and interest payments (not including property taxes)each year from interest earned on the 100k, the bank will be real happy and your buddy will achieve his goal. Over the life of the mortgage, however, your buddy needs to have the discipline not to spend any of the 100K before he pays the mortgage off. 30 years is a long time.

I will side with you. Pay the 70K cash for the house (creates immediate equity), and save thousands in interest payments to a bank over 30 years. If he never spends the remainding 30k, and invests that at a rate of 5%, after 25 years, it will have grown to a bit more than 100K-another $.02 opinion--and lots of variables not thrown into the discussion--good luck to your friend with whatever he decides to do--Tim

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