Model Home Loan / Compare PayOff With Not
Posted: Thu May 28, 2020 6:56 pm
Here is my real world case:
The bank and I own my house that is worth $600,000 in total
The Bank owns $200,000, I own $400,000 of it
I have 15 years left and my payment is $1100 per month
I have savings of $500,000 total.
I want to run a monte carlo and compare my chances of what happens if I pay off my loan completely or pay it off as I'm doing now.
What are my chances if I put the money in the stock market? What if I put it in bonds, savings account?
I can find no option that remotely gives me a way to model this with FRP that takes into consideration huge important factors like:
The interest I pay is deductible from my income
The mount of the principle/interest changes as the loan balance goes to zero
Am I missing something obvious? it seems like extra inputs are just a simple linear drop down with a start and end date.
The bank and I own my house that is worth $600,000 in total
The Bank owns $200,000, I own $400,000 of it
I have 15 years left and my payment is $1100 per month
I have savings of $500,000 total.
I want to run a monte carlo and compare my chances of what happens if I pay off my loan completely or pay it off as I'm doing now.
What are my chances if I put the money in the stock market? What if I put it in bonds, savings account?
I can find no option that remotely gives me a way to model this with FRP that takes into consideration huge important factors like:
The interest I pay is deductible from my income
The mount of the principle/interest changes as the loan balance goes to zero
Am I missing something obvious? it seems like extra inputs are just a simple linear drop down with a start and end date.