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replacement home purchase

Submitted by lmwiertzmd on 10 July 2007 - 6:26pm

If I sell my current home and purchase a replacement home, where does ESPlanner account for the down payment? I can’t find it reflected under regular assets or under total spending.

Something is not adding up. I get the same answer under net home purchases and under expenditures when I enter a 10% down payment and when I enter a 90% down payment.

10% down payment
($355,500) net home purchases
($322,941) expenditures
$540,000 mortgage balance
$60,000 equity

90% down payment
($355,500) net home purchases
($322,941) expenditures
$60,000 mortgage balance
$540,000 equity

If my replacement house is more expensive than my current house how can I have a negative expenditure?

Thanks,

Rich

‹ Vacation/second home with rental income and deductions Equity from sale of first home not applied to new home ›
Submitted by ckempczinski@mb... on 11 July 2007 - 9:49am.
1

I am having the same problem which I reported 7/9 on the Support topic. I downloaded build 63 this morning, but it didn't correct the problem.

While examining this, I noticed another thing that bothers me. The equity in both my old home and my new home increases annually at a higher rate than it should. Likewise, the mortgage balance goes down at a correspondingly (almost) high rate. With my current home, only about $4000 annually should go reduce my mortgage balance, but the report shows the balance going down by about 16K. With my replacement home, about $6000 should go toward the balance in the early years, but the report shown the mortgage balance reduced my about $25000.

Furthermore, since I specified zero percent real appreciation, the sum of the equity and the mortgage balance should always equal the purchase price of the house in today's dollars. That works at the beginning and the end of the 30 year mortgage, but in the middle years, the total of these numbers increases, implying that the house is more valuable in todays dollars.

These issues around the amount of equity appear to have been present prior to the new build that came out this week, and if I am reading them correctly, this makes the impact of a home change unrealistically positive- over and above the impact of the newer issue raised in the previous post.

Submitted by Laurence Kotlikoff on 3 August 2007 - 11:33am.
2

Rich, The downpayment for a new home shows up under net home purchase in the Housing report. Call me at 617 834-2148 ifyou have any more questions about these reports. I believe everything is now working correctly wrt housing. best, Larry

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