If you buy a $500,000 house and then later sell it for $600,000 when you have only made $100,000 worth of mortgage payments on it (P + I), how much money do you actually receive from the house sale?There's no way you just walk away with a clean $600,000 directly in your pocket, given that you still owed the bank $400k when you sold it. So how does that all work?
>>59240809You walk away with $1 million.
>>59240809Probably depends on the terms of your mortgage. I think most banks don't care as long as you make payments. Selling for $600k would mean you pay them the remaining $400k and keep $200K, meaning $100K of profits for youYes that's a lot of money which is why people do it
>>59241241This is also how a degenerate gambling bankrupt deadbeat like dave ramsay can make $100M in this country and go on to write books telling you to be conservative with your money
>>59240809>buy for 300k>sell for 600k>100k in capital gains>20k in Jewish fees (I'm making this up but probably true)>7k in Jewish lawyer fees (real) >200m and change left over for your new 4 walls of taxation >repeat >die>they tax that too
Here's a secret, if you put any profit made from selling a house into buying another house, it's TAX FREE.If I sell a house, I can put any profits I make off it into another property TAX FREE, this is why property prices keep going up, every time someone sells a house it gives them a way to transfer money tax free to another property.Let me give you an example:My first house 10 years ago was 200k, after living in it for 4 years I sold it for 300k, I then transferred the 100k into a 400k house which effectively brought the price of that house for me down to 300K, this 400k house is now worth 700k on the market, if I sold now I could transfer my 400k in profits tax free into a 1mm house and it would only cost me 600k.See how climbing the ladder like this is how rich people make their millions while also increasing the price of houses yet?
>>59240809I'm not sure anon, I think you're unto something. It doesn't add up
>>59241297Interesting. I want to trade down because I bought a house in an expensive area but now, after 8 years, I want to be innawoods and boy are they CHEAP! >less than 1 acre, view of major lake >bought for 270k>worth 400k now>looking at a new build, innawoods, 8 acres, stream running through property >600kis this do able? my OG house is paid off
>>59241241If you've only paid $100k against the mortgage, something like 2/3 of that would be interest payments. You'd be lucky to walk away with $35k in profit.
>>59241410the principle paid can also be looked at as savings since otherwise it would have gone to a landlord as rent, you still have to live somewhere
>>59240809you pay back the lender, and a fee to the realtor. maybe some other taxes. i'd say if you owed 400k on a 600k sale, you'd probably walk away with somewhere around 150k'ish.
>>59240809You get your net equity minus about 10% of the total value of the house that gets eaten up in fees. So, if you put a $100K downpayment on that $500K house, then it became a $600K house, and your mortgage payments had paid down $20K of principle, you would get100K + 100K + 20K - 60K = 160K.The bank would get its remaining $380K out of the sale proceeds, the realtors would get 3% each, your local government would get 3% in fees, and the escrow company would take 1%.
>>59241297The tax reforms back around the mid-1990s mean that if you sell your primary residence after living in it for at least 3 of the last 5 years, you also don't have to pay federal taxes on the capital gains. Fuck, it may have changed again since then, I dunno.
>>59240809Too much math.. I’ll proceed to get me some gems on auradex and wait till it moons, fuck real estate kek
>>59241410Amortization schedules are the biggest scam.
