how timeshare works

You're deducting it from the income that you report to the Internal Revenue Service. If there's something that you could actually take directly from your taxes, that's called a tax credit. So, if you were, uh, if there was some unique thing that you could in fact subtract it straight from your credit, from your taxes, that's a tax credit, tax credit.

And so, in this spreadsheet I simply want to show you that I in fact calculated because month just how much of a tax deduction do you get. So, for instance, simply off of the very first month you paid $1,700 in interest of your $2,100 home mortgage payment. So, 35 percent of that, and I got the 35 percent as one of your presumptions, 35 percent of $1,700.

So, approximately throughout the very first year I'm going to save about $7,000 in taxes, so that's nothing, absolutely nothing to sneeze at. Anyway, hopefully you found this valuable and I motivate you to go to that spreadsheet and, uh, play with the presumptions, just the presumptions in this brown color unless you really know what you're making with the spreadsheet.

What I want to finish with this video is explain what a mortgage is however I believe the majority of us have a least a basic sense of it. But even better than that really enter into the numbers and comprehend a little bit of what you are in fact doing when you're paying a home mortgage, what it's comprised of and how much of it is interest versus how much of it is really paying for the loan.

Let's state that there is a home that I like, let's state that that is your house that I wish to purchase. It has a cost tag of, let's state that I need to pay $500,000 to purchase that house, this is the seller of your home right here.

I want to buy it. I wish to buy your house. This is me right here. And I've been able to conserve up $125,000. I have actually been able to save up $125,000 however I would really like to live in that home so I go to a bank, I go to a bank, get a brand-new color for the bank, so that is the bank right there.

Bank, can you lend me the remainder of the quantity I require for that house, which is essentially $375,000. I'm putting 25 percent down, this right, this right, this number right here, that is 25 percent of $500,000. So, I ask the bank, can I have a loan for the balance? Can I have a $375,000 loan? And the bank says, sure, you appear like, uh, uh, a great person with a great job who has an excellent credit rating.

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We need to have that title of your house and when you settle the loan we're going to offer you the title of the home. So what's going to occur here is we're going to have the loan is going to go to me, so it's $375,000, $375,000 loan.

However the title of your house, the document that says who actually owns your house, so this is the home title, this is the title of https://rafaelyhlh056.skyrock.com/3335293756-how-to-get-out-of-a-timeshare-ownership.html your home, house, home title. It will not go to me. It will go to the bank, the house title will go from the seller, perhaps even the seller's bank, perhaps they have not Learn more here paid off their home mortgage, it will go to the bank that I'm borrowing from.

So, this is the security right here. That is technically what a home loan is. This promising of the title for, as the, as the security for the loan, that's what a home mortgage is. And actually it originates from old French, mort, indicates dead, dead, and the gage, implies promise, I'm, I'm a hundred percent sure I'm mispronouncing it, however it originates from dead promise.

When I settle the loan this pledge of the title to the bank will die, it'll come back to me. Which's why it's called a dead pledge or a home loan. And most likely because it comes from old French is the reason we don't say mort gage. We say, mortgage.

They're truly referring to the mortgage, home mortgage, the mortgage loan. And what I want to do in the rest of this video is use a little screenshot from a spreadsheet I made to in fact reveal you the math or in fact show you what your home mortgage payment is going to. And you can download, you can download this spreadsheet at Khan Academy, khanacademy.org/downloads, downloads, slash home mortgage calculator, home loan, or in fact, even much better, just go to the download, simply go to the downloads, downloads, uh, folder on your web internet browser, you'll see a bunch of files and it'll be the file called home mortgage calculator, mortgage calculator, calculator dot XLSX.

But just go to this URL and after that you'll see all of the files there and then you can simply download this file if you want to play with it. However what it does here remains in this type of dark brown color, these are the presumptions that you could input and that you can change these cells in your spreadsheet without breaking the entire spreadsheet.

I'm purchasing a $500,000 house. It's a 25 percent deposit, so that's the $125,000 that I had saved up, that I 'd talked about right over there. And after that the, uh, loan quantity, well, I have the $125,000, I'm going to need to obtain $375,000. It computes it for us and then I'm going to get a quite plain vanilla loan.

So, thirty years, it's going to be a 30-year set rate mortgage, fixed rate, repaired rate, which indicates the rates of interest won't alter. We'll speak about that in a little bit. This 5.5 percent that I am paying on my, on the money that I obtained will not change over the course of the 30 years.

Now, this little tax rate that I have here, this is to really determine, what is the tax savings of the interest reduction on my loan? And we'll talk about that in a 2nd, we can ignore it in the meantime. And after that these other things that aren't in brown, you shouldn't tinker these if you in fact do open this spreadsheet yourself.

So, it's literally the annual interest rate, 5.5 percent, divided by 12 and most home mortgage loans are intensified on a monthly basis. So, at the end of every month they see how much money you owe and then they will charge you this much interest on that for the month.