Question: : 18-1/4% on my first home. That was ‘82 for ya. I seem to recall the >: priciple portion of my first $500 mortgage payment being 84 cents. >:
>Guess what. Todays 8 % loans are a lot more expensive than those whoppers >from the 80’s. An 8% loan is really about 5.6% after taxes. Subtract out >the 3.5% inflation rate and the real loan cost is 2.1%.
>Do that same calculation for the 80’s and the results usually come out >zero or even negative. Thats why real estate was such a good deal in >the 70’s-80’s.
Answer: Now let me see if I’ve got this straight…
Instead of griping over a $500/mo payment for a 30 yr., $36K home loan, I should have been reveling in my good fortune because inflation was deeply embedded into double digits too.
Hmm, I’m going to have to think about that one for awhile…
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