How Are They Going To Pay For It ??? - Posted by phil fernandez
Posted by phil fernandez on December 29, 2000 at 19:54:11:
Just saw an interesting article where soon to be ex president Bill Clinton and wife are buying a second house in Washington DC. The article goes on saying that the Clinton’s are buying the house at 2.85 million and will be getting a mortgage of 1.995 million to finance the purchase. The article goes on saying that Bill Clinton will be getting a $157,000 per year pension and his wife will be making $145,000 per year at her job as a senator from New York.
I got thinking. Can the Clintons qualify or even afford this $1.995 million mortgage on this house with their stated salaries.
Mortgage payments on the newly acquired mortgage would be $13,949 per month times 12 months would equal $167,388 plus the annual taxes of $10,671 for total payments of $178,059 a year. With a combined income of $302,000 their debt to loan ratio would be 58.95%. How the heck are they going to qualify for the loan and they put 30% down. Where’s the creative financing here.
But it gets more bizzare. Do you remember they bought a house in New York less than a year ago for 1.7 million. On that deal they put 20% down so they had to fiance 1.36 million. Using the same 7.5% interest amortized over 30 years, their payment would be $9,509 each month. That would be $114,108 per year plus the taxes of $26,000 would become a total for the New York house of $140,108 per year. And do you think the Clintons will be renting the New York house out. Of course not so no cash flow there.
After the smoke clears the Clintons have housing payments on the two houses totalling $318,167 with an income of only $302,000 per year.
Geez I don’t get it. Their debt to income ratio is above 100%. Actually its 105.35% and this doesn’t even take into account the maintenance of the two properties.
And he takes credit for the current economy. What am I missing here.