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Is it possible to offset a mortgage with only the appreciation of that property's value?
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As in, is there a possible scenario where the appreciation of the value of a property could be greater than the mortgage payments on that property?
real-estate
asked 3 hours ago
csey
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As in, is there a possible scenario where the appreciation of the value of a property could be greater than the mortgage payments on that property?
real-estate
asked 3 hours ago
csey
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csey is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
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up vote
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down vote
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up vote
1
down vote
favorite
As in, is there a possible scenario where the appreciation of the value of a property could be greater than the mortgage payments on that property?
real-estate
asked 3 hours ago
csey
61
New contributor
csey is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
As in, is there a possible scenario where the appreciation of the value of a property could be greater than the mortgage payments on that property?
real-estate
real-estate
asked 3 hours ago
csey
61
New contributor
csey is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
asked 3 hours ago
csey
61
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csey is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
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asked 3 hours ago
csey
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asked 3 hours ago
csey
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asked 3 hours ago
csey
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61
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3 Answers
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I don't know what you mean by "offset a mortgage" but certainly the appreciation could be more than the mortgage balance. All that means, though, is you now have 50% or more equity in the house.
Say you buy a house with a 100% mortgage for $100k. The house appreciates the next day to $200K. You now own a $200k house and have a $100K mortgage, so you have 50% equity in the house.
If you're thinking that somehow the mortgage "goes away", that's not possible (unless you sell the house and pay it back, of course).
If you mean could the appreciation be more than the interest paid, then yes that's possible as well. If you pay 4% on a mortgage but the value goes up 5% then you have a net gain of 1% (which also is not realized until you sell the house).
answered 3 hours ago
D Stanley
48.8k7147158
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Possible? Certainly. That's how some people are able to make money by flipping houses, i.e. buying a house, perhaps making improvements, and then selling the house a short time later for a higher price which covers the cost of the interest payments, improvements, and a profit. However, if the local housing market goes against you, you can end up owning a house that is worth much less than you owe on the mortgage.
answered 2 hours ago
Charles E. Grant
6,04731916
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Certainly. As a case in point, I bought my house ~10 years ago with 50K down. The mortgage payments are $850/month*, so $102K paid over 10 years. Outstanding balance is $83K, so the total is $235K. In the current market, it would sell for around $350K.
*Numbers are rounded a bit for simplicity.
answered 1 hour ago
jamesqf
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3 Answers
3
active
oldest
votes
3 Answers
3
active
oldest
votes
active
oldest
votes
active
oldest
votes
up vote
4
down vote
I don't know what you mean by "offset a mortgage" but certainly the appreciation could be more than the mortgage balance. All that means, though, is you now have 50% or more equity in the house.
Say you buy a house with a 100% mortgage for $100k. The house appreciates the next day to $200K. You now own a $200k house and have a $100K mortgage, so you have 50% equity in the house.
If you're thinking that somehow the mortgage "goes away", that's not possible (unless you sell the house and pay it back, of course).
If you mean could the appreciation be more than the interest paid, then yes that's possible as well. If you pay 4% on a mortgage but the value goes up 5% then you have a net gain of 1% (which also is not realized until you sell the house).
answered 3 hours ago
D Stanley
48.8k7147158
add a comment |Â
up vote
4
down vote
I don't know what you mean by "offset a mortgage" but certainly the appreciation could be more than the mortgage balance. All that means, though, is you now have 50% or more equity in the house.
Say you buy a house with a 100% mortgage for $100k. The house appreciates the next day to $200K. You now own a $200k house and have a $100K mortgage, so you have 50% equity in the house.
If you're thinking that somehow the mortgage "goes away", that's not possible (unless you sell the house and pay it back, of course).
If you mean could the appreciation be more than the interest paid, then yes that's possible as well. If you pay 4% on a mortgage but the value goes up 5% then you have a net gain of 1% (which also is not realized until you sell the house).
answered 3 hours ago
D Stanley
48.8k7147158
add a comment |Â
up vote
4
down vote
up vote
4
down vote
I don't know what you mean by "offset a mortgage" but certainly the appreciation could be more than the mortgage balance. All that means, though, is you now have 50% or more equity in the house.
Say you buy a house with a 100% mortgage for $100k. The house appreciates the next day to $200K. You now own a $200k house and have a $100K mortgage, so you have 50% equity in the house.
If you're thinking that somehow the mortgage "goes away", that's not possible (unless you sell the house and pay it back, of course).
If you mean could the appreciation be more than the interest paid, then yes that's possible as well. If you pay 4% on a mortgage but the value goes up 5% then you have a net gain of 1% (which also is not realized until you sell the house).
answered 3 hours ago
D Stanley
48.8k7147158
I don't know what you mean by "offset a mortgage" but certainly the appreciation could be more than the mortgage balance. All that means, though, is you now have 50% or more equity in the house.
Say you buy a house with a 100% mortgage for $100k. The house appreciates the next day to $200K. You now own a $200k house and have a $100K mortgage, so you have 50% equity in the house.
If you're thinking that somehow the mortgage "goes away", that's not possible (unless you sell the house and pay it back, of course).
If you mean could the appreciation be more than the interest paid, then yes that's possible as well. If you pay 4% on a mortgage but the value goes up 5% then you have a net gain of 1% (which also is not realized until you sell the house).
answered 3 hours ago
D Stanley
48.8k7147158
answered 3 hours ago
D Stanley
48.8k7147158
answered 3 hours ago
D Stanley
48.8k7147158
answered 3 hours ago
D Stanley
48.8k7147158
48.8k7147158
add a comment |Â
add a comment |Â
up vote
2
down vote
Possible? Certainly. That's how some people are able to make money by flipping houses, i.e. buying a house, perhaps making improvements, and then selling the house a short time later for a higher price which covers the cost of the interest payments, improvements, and a profit. However, if the local housing market goes against you, you can end up owning a house that is worth much less than you owe on the mortgage.
answered 2 hours ago
Charles E. Grant
6,04731916
add a comment |Â
up vote
2
down vote
Possible? Certainly. That's how some people are able to make money by flipping houses, i.e. buying a house, perhaps making improvements, and then selling the house a short time later for a higher price which covers the cost of the interest payments, improvements, and a profit. However, if the local housing market goes against you, you can end up owning a house that is worth much less than you owe on the mortgage.
answered 2 hours ago
Charles E. Grant
6,04731916
add a comment |Â
up vote
2
down vote
up vote
2
down vote
Possible? Certainly. That's how some people are able to make money by flipping houses, i.e. buying a house, perhaps making improvements, and then selling the house a short time later for a higher price which covers the cost of the interest payments, improvements, and a profit. However, if the local housing market goes against you, you can end up owning a house that is worth much less than you owe on the mortgage.
answered 2 hours ago
Charles E. Grant
6,04731916
Possible? Certainly. That's how some people are able to make money by flipping houses, i.e. buying a house, perhaps making improvements, and then selling the house a short time later for a higher price which covers the cost of the interest payments, improvements, and a profit. However, if the local housing market goes against you, you can end up owning a house that is worth much less than you owe on the mortgage.
answered 2 hours ago
Charles E. Grant
6,04731916
answered 2 hours ago
Charles E. Grant
6,04731916
answered 2 hours ago
Charles E. Grant
6,04731916
answered 2 hours ago
Charles E. Grant
6,04731916
6,04731916
add a comment |Â
add a comment |Â
up vote
1
down vote
Certainly. As a case in point, I bought my house ~10 years ago with 50K down. The mortgage payments are $850/month*, so $102K paid over 10 years. Outstanding balance is $83K, so the total is $235K. In the current market, it would sell for around $350K.
*Numbers are rounded a bit for simplicity.
answered 1 hour ago
jamesqf
2,866816
add a comment |Â
up vote
1
down vote
Certainly. As a case in point, I bought my house ~10 years ago with 50K down. The mortgage payments are $850/month*, so $102K paid over 10 years. Outstanding balance is $83K, so the total is $235K. In the current market, it would sell for around $350K.
*Numbers are rounded a bit for simplicity.
answered 1 hour ago
jamesqf
2,866816
add a comment |Â
up vote
1
down vote
up vote
1
down vote
Certainly. As a case in point, I bought my house ~10 years ago with 50K down. The mortgage payments are $850/month*, so $102K paid over 10 years. Outstanding balance is $83K, so the total is $235K. In the current market, it would sell for around $350K.
*Numbers are rounded a bit for simplicity.
answered 1 hour ago
jamesqf
2,866816
Certainly. As a case in point, I bought my house ~10 years ago with 50K down. The mortgage payments are $850/month*, so $102K paid over 10 years. Outstanding balance is $83K, so the total is $235K. In the current market, it would sell for around $350K.
*Numbers are rounded a bit for simplicity.
answered 1 hour ago
jamesqf
2,866816
answered 1 hour ago
jamesqf
2,866816
answered 1 hour ago
jamesqf
2,866816
answered 1 hour ago
jamesqf
2,866816
2,866816
add a comment |Â
add a comment |Â
csey is a new contributor. Be nice, and check out our Code of Conduct.
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