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Old 01-13-2008, 08:25 AM   #59
GreenTeaFrapp
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Join Date: Aug 2005
Location: CP House of Ill Repute
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Quote:
Originally Posted by Mike Oxlong View Post
If you rent and are paying $1000 a month rent that is $1000 you will never see again.

If you buy and are paying say $1400 a month some of that money is interest and some of the money goes towards principal which contributes to your equity. Meanwhile when the value of the property goes up that is also contributing to your equity.
In your example do you know how long it will be before you start paying more then $400 a month towards your principal? It'll take more then a year to do so. In the first year of your mortgage you are paying mostly interest.

So even if your house goes up in value by 10% in one year, you've still had to pay thousands in interest in your first year.
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