Don’t forget the taxes on stuff you own like your house. No escaping taxes unless you die. Of course they’ll ram through the death tax one day so you have less to pass on.
Yes, and isn't it marvelous that Q is exposing these things? It would be so nice if more people were actually interested and used critical thinking and asked questions. Like, for instance, why are loans amortized the way they are?
No, you borrow the money once. You don't keep borrowing it. If you buy a house and get a mortgage loan, the bank pays the entire cost of the house, (minus your down payment.) The seller walks away with the entire amount. They are not getting monthly payments based on you getting a little more of your loan each month. You get the entire loan up front. But you pay an exorbitant amount of interest up front, as well. Why?
You are effectively getting a loan each month. And each month you borrow less and less.
Put yourself in the position of the bank. You just paid the entire amount to the Seller, let's say $200,000. Do you think it is fair to get only $1200/month for 15 years? $200,000 is a lot of money, right?
I get what you are thinking because I had the same thoughts. Save your post as a screenshot and revisit it in several years. You'll give yourself a smirk.
There is nothing fair about what the banks do. The banks are not compelled to lend money. They choose to, and they choose to essentially enslave their borrowers due to the usurious method they employ for repayment AND huge profit. I am certainly not against profit. I am against usury and that is what this is.
So what is the fair monthly payment for a 15 year mortgage loan of $200,000? How much should you pay?
Just for reference, the monthly payment at 5% interest is $1581 ($748 principle, $833 interest in the first month) using the standard amortization method that you dislike.
What would be "fair" is a straight amount, not a "hard to calculate without a computer" amount. A fair figure would be a straight figure, one like 200000/(12*15) + 300 per month, any overage for payment gets applied straight to the principal
Correct me if I'm wrong but the $300 flat fee you propose appears to be based on the complex amortization table but just a little less because the amortization table is unfair. How would you independently arrive at $300? That's a lot of money. It's a car payment. Why not $100/month? How would interest rates affect the flat $300/fee? Do we change to $310 if interest rates go up 0.5%? What if I borrow $150,000, do I still have to pay $300/month? In the end, to adjust for all of the variables, your system would end up just as complex as the current system.
Embrace the complex math instead of shunning it. This is how the financial industry makes money out of people. They prey on people's aversion to mathematics.
You forgot property taxes, plus interest and fees on your own money.
These are great questions and it is fucked.
Don’t forget the taxes on stuff you own like your house. No escaping taxes unless you die. Of course they’ll ram through the death tax one day so you have less to pass on.
30% if you live in a decent red state. Otherwise you need to pay the local rake.
https://en.wikipedia.org/wiki/State_income_tax#/media/File:Top_State_Marginal_Tax_Rates.jpg
Yes, and isn't it marvelous that Q is exposing these things? It would be so nice if more people were actually interested and used critical thinking and asked questions. Like, for instance, why are loans amortized the way they are?
Because principle is higher (you are borrowing a greater of amount of money) at the start of the loan than at the end.
No, you borrow the money once. You don't keep borrowing it. If you buy a house and get a mortgage loan, the bank pays the entire cost of the house, (minus your down payment.) The seller walks away with the entire amount. They are not getting monthly payments based on you getting a little more of your loan each month. You get the entire loan up front. But you pay an exorbitant amount of interest up front, as well. Why?
You are effectively getting a loan each month. And each month you borrow less and less.
Put yourself in the position of the bank. You just paid the entire amount to the Seller, let's say $200,000. Do you think it is fair to get only $1200/month for 15 years? $200,000 is a lot of money, right?
I get what you are thinking because I had the same thoughts. Save your post as a screenshot and revisit it in several years. You'll give yourself a smirk.
There is nothing fair about what the banks do. The banks are not compelled to lend money. They choose to, and they choose to essentially enslave their borrowers due to the usurious method they employ for repayment AND huge profit. I am certainly not against profit. I am against usury and that is what this is.
So what is the fair monthly payment for a 15 year mortgage loan of $200,000? How much should you pay?
Just for reference, the monthly payment at 5% interest is $1581 ($748 principle, $833 interest in the first month) using the standard amortization method that you dislike.
What would be "fair" is a straight amount, not a "hard to calculate without a computer" amount. A fair figure would be a straight figure, one like 200000/(12*15) + 300 per month, any overage for payment gets applied straight to the principal
Correct me if I'm wrong but the $300 flat fee you propose appears to be based on the complex amortization table but just a little less because the amortization table is unfair. How would you independently arrive at $300? That's a lot of money. It's a car payment. Why not $100/month? How would interest rates affect the flat $300/fee? Do we change to $310 if interest rates go up 0.5%? What if I borrow $150,000, do I still have to pay $300/month? In the end, to adjust for all of the variables, your system would end up just as complex as the current system.
Embrace the complex math instead of shunning it. This is how the financial industry makes money out of people. They prey on people's aversion to mathematics.
Foreign aid benefits the US because a lot of that money comes back to American politicians in the form of kick backs.