Friday, August 19, 2005

Ditech.com 's Owning vs. Renting Calculator

Check out Ditech's online Owning vs Renting Calculator. Here are some problems that I found with the calculator:

  • It does not count maintenance costs for a house.
  • It counts appreciation of the home, but NOT investment of the monthly savings of renting vs owning. You would earn interest on this amount.
  • It does NOT allow negative appreciation
A faulty calculator from a mortgage lender. Not a surprise.

9 comments:

  1. This comment has been removed by a blog administrator.

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  2. I would also disagree with the calculations by detech. Not only is there maintenance, but there are taxes, and sometimes negative appreciation (as what I experinced when I bought a townhouse near Hartford CT in 1989- and it was not until 2002, that it was worth what I paid for it 1989. Spin and BS -many people continue to get sucked into this bubble- but more are learning. Sad to say many will learn the hard way.

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  3. I entered data including a large-ish downpayment and the ditech calculator seemed tell me that I was better off investing my downpayment elsewhere.

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  4. Not a surprise indeed. But, rare is the person who finds it and points it out! Good job! Cole @ BigHousingBubble.

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  5. I also entered a real-life scenario of $700K, $2K rent, 6% fixed-rate and 40% down and it told me that I'd be better off investing my money and renting.

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  6. Yeah, mine (see above) was similar, 800k, 30% down, 1600/mo rent, 5.8% interest.

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  7. Good find. I know a thing or three about Javascript, so I stole their source code and I'm working on revising it to provide a more complete comparison. Hopefully I'll have something worth looking at within a week on Seattle Bubble.

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  8. the tim,

    cool. Great idea. :-)

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  9. where can i get more review on ditech ? i want to see some complaints that they had recently

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