Posted by Tim (Atlanta) on January 02, 2001 at 13:40:06:
Why would you think you made a bad decision based on the amount of money that you will pay in total for the property? You need to know what the current balance of the loan is (probably less than 45K) and the price that the home would sell for today. Your equity is the difference. It has NOTHING to do with the total amount of money you put into the home.
You don’t mention the term of your loan, but let’s assume that it is 10 years, giving you a payment of $545.97. So in total you would be paying $65,516.40 principal and interest over the life of the loan. Yes, you will probably not get that amount of money back. But you are talking about your primary residence, not an investment property. Using your formula, it would be very difficult to make money on your primary home.
If it is a 10 year note, the balance after 5 1/2 years (66 months) would be $24,690.84. If the home would sell now for that same $45,000, you could sell the home and get $20,000 back. So you have $20,000 in equity right now.
Think long and hard before you default on that loan. That default would go on your credit report and make it harder to buy any more property.