Sports / Finance: Tiger Woods' New $38 Million Crib

[Soulstation1]

http://www.freep.com/apps/pbcs.dll/article...510/1066/SPORTS

tiger's new mortage payment $177,400 a month, with $8 million down

Tiger MF Woods

Edited July 20, 2006 by Soulstation1

[Soulstation1]

unreal

[Soulstation1]

tiger's tearing that SHIT down and building his own place

YOU GO TIGER

LMAO

http://www.starpulse.com/news/index.php/20...lion_on_a_new_h

Edited January 26, 2006 by Soulstation1

[Rooster_Ties]

[Soulstation1]

Tiger MF Woods

Edited January 30, 2006 by Soulstation1

[Soulstation1]

the man pocketed another $999,000 over the weekend

he might have that shack paid off by the end of the year

he looks like he's in the zone this year

[Dave James]

If he ever gets dialed in off the tee, he will be untouchable. He hit almost no fairways at Doral and he still wins. That's got to be pretty discouraging if your trying to compete at this level. His ability to recover is other worldly. You can argue all you want about who's the best golfer ever, but when it comes to getting up and down, no one has ever been this good.

Up over and out.

[Soulstation1]

tiger's close and he's playing terrible

[patricia]

tiger's new mortage payment $177,400 a month, with $8 million down

Tiger MF Woods

Why would Tiger have a mortgage at all? He can't pay cash? If he can't, wouldn't it make sense for him to get a very slightly less palatial spread and pay cash for it?

I still remember an interview, years ago, with a real estate woman who was talking about searching out properties for Middle Eastern potentates in the U.S. When asked by the interviewer what the mortgage payments these people would be paying would be, she looked amused and said "They pay cash".

Now, that would be impressive if it were also true of Tiger Woods.

[connoisseur series500]

The American way is to use other people's money for your business deals and personal possessions. J.P. Morgan and the other robberbarons reinforced this philosophy.

Moslems from Arab countries hate the concept of interest payments and see it as usury which is proscribed in Islamic Law. They pay cash for everything in America. I can also tell you that they have no interest in longterm investments for their cash. They must keep their money liquid at all times for future business needs.

Of course, there are all generalizations, but it's the usual way of things.

[patricia]

The American way is to use other people's money for your business deals and personal possessions. J.P. Morgan and the other robberbarons reinforced this philosophy.

Moslems from Arab countries hate the concept of interest payments and see it as usury which is proscribed in Islamic Law. They pay cash for everything in America. I can also tell you that they have no interest in longterm investments for their cash. They must keep their money liquid at all times for future business needs.

Of course, there are all generalizations, but it's the usual way of things.

Actually I hate the concept of interest payments also.

Different cultures, different ways.

I can't help but think that my mother, who was born and raised in Scotland, must have secretly been Middle Eastern.

She saw no sense in borrowing money to buy something for which you could pay cash.

She felt that paying at least twice as much in the long run for something, including a house, if you didn't have to, was insane.

My youngest brother, taking her at her word, paid cash, over the last thirty years for seven houses, which he rents to teachers, thus creating a substantial income, should he decide to retire, which he's not ready for yet.

Using other people's money to buy something means that other people own that something until you make the last payment.

So, who can say which is better?

I would tend to think that actually owning something, which you can sell if bad times appear over the horizon, is the more secure investment.

There is no guarantee that your income will rise, remain stable, or disappear, making you unable to meet your monthly payments of $177,400.00 per month.

I'm not saying that Tiger Woods will suddenly stop winning, or become indigent, but one never knows.

A home is something that a person needs and it just seems to me that owning it makes more sense than the bank or a mortgage company owning it.

But, what do I know?

Edited April 9, 2006 by patricia

[Dan Gould]

The American way is to use other people's money for your business deals and personal possessions. J.P. Morgan and the other robberbarons reinforced this philosophy.

Moslems from Arab countries hate the concept of interest payments and see it as usury which is proscribed in Islamic Law. They pay cash for everything in America. I can also tell you that they have no interest in longterm investments for their cash. They must keep their money liquid at all times for future business needs.

Of course, there are all generalizations, but it's the usual way of things.

Actually I hate the concept of interest payments also.

Different cultures, different ways.

I can't help but think that my mother, who was born and raised in Scotland, must have secretly been Middle Eastern.

She saw no sense in borrowing money to buy something for which you could pay cash.

She felt that paying at least twice as much in the long run for something, including a house, if you didn't have to, was insane.

My youngest brother, taking her at her word, paid cash, over the last thirty years for seven houses, which he rents to teachers, thus creating a substantial income, should he decide to retire, which he's not ready for yet.

Using other people's money to buy something means that other people own that something until you make the last payment.

So, who can say which is better?

I would tend to think that actually owning something, which you can sell if bad times appear over the horizon, is the more secure investment.

There is no guarantee that your income will rise, remain stable, or disappear, making you unable to meet your monthly payments of $177,400.00 per month.

I'm not saying that Tiger Woods will suddenly stop winning, or become indigent, but one never knows.

A home is something that a person needs and it just seems to me that owning it makes more sense than the bank or a mortgage company owning it.

But, what do I know?

Banks and mortgage companies do not "own" your property.

They have a security interest in it, represented by the note and the mortgage that you signed at closing. The loan you took out is secured by the property purchased, but so long as you are current on your payments, you own the property, because you are free to sell it, rent it out, etc. So long as the value of your property does not decrease, you will always be in a position to sell at a profit

"if bad times appear over the horizon."

This statement is also false:

"Using other people's money to buy something means that other people own that something until you make the last payment."

My parents will own their house outright in September of this year, after thirty years of mortgage payments. Do you think the bank has some control over the property? At this point they owe about $5000 in principal and have something like $950,000 in equity. Their bank doesn't "own" anything.

[patricia]

Dan, it's a psychological as well as a financial thing to me. Given the choice, I would rather a bank or mortgage company had no financial interest in my house, my car or my anything else.

My point is that over the life of the mortgage, you will pay much, much more for the property than you originally agreed to pay for it. And, should you, for some reason, not be able to make a payment, the bank or mortgage company can, indeed repossess the property, with you forfeiting perhaps thousands and thousands of dollars. Of course, we hope that doesn't happen, but it could.

Yes, you are using the bank's or the mortgage company's money. But, they are using yours as well. Your leverage is, well, nothing. Theirs is that they can take away your property if you should have to default on a payment, for some reason.

I still maintain that, if a person can, they are better off if they can possibly pay cash, even for their house. But, that almost never happens. In fact, when people do sell their house, usually mid-mortgage, they almost never trade down, except for those who are going to retire. Those people usually do pay cash if they want to own. Otherwise, they rent or lease, using the profit from the sale of their house as investment capital, or to pay for their day to day living expenses.

[Quincy]

Not having any experience with monthly mortgage payments of $177,400 I'm not sure if there is a cut off point, but mortgage interest is deductible on American tax forms (Schedule A.) Even if he isn't allowed all of it, it would be better than the standard deduction. So financially it probably makes sense for him to get a mortgage even if he can pay cash for the place.

Also, keep in mind his endorsement deals cover the mortgage payments even after taxes, never mind investment income or tournament related money. I'm sure if his back went out tomorrow and he could never play again he could still afford the house. I'd think the lender looked into that too, but one never knows.

I understand your preference towards cash payments though, I'm that way too. Rather than be considered a nut I prefer to think of my way of thinking as charmingly eccentric.

[patricia]

I understand your preference towards cash payments though, I'm that way too. Rather than be considered a nut I prefer to think of my way of thinking as charmingly eccentric.

I also like to think that my family and friends consider me charmingly eccentric, rather than hopelessly out of touch with current ways of financial bobbing and weaving.

I had completely forgotten that mortgage interest is deductable in the U.S. It isn't deductable here in Canada.

So, here I would be giving a gift of several thousand dollars to my lender in exchange for their lending me the money to buy my house. Few actually calculate what they will be paying for their house at the end of the lending period, twenty or thirty years from the initial down payment.

The rationale of course to having a mortgage, as opposed to renting or leasing is that equity is built up, which isn't true if one rents or leases.

But, because few, if any prospective home-owners have to come up with the total cost of a house, they wouldn't be able to ever own their own home. So, there's that, coupled with your mortgage interest being deductable which puts the cost of owning a home, if one can come up with the down payment, desireable.

Most people decide whether or not they will pay the price of a home on the market, not by looking at the asking price, but at the monthy payments.

The so-called value of the actual house is often hugely inflated because it can be.

Chances are that they don't really own their home until the end of the mortgage, twenty or thirty years from now.

But, they rationalize, they would be paying someone either way and at least if they have a mortgage, they are also building up equity, which will help them move up to a larger house and a larger mortgage.

BTW, it seems to me that from to time there is talk of discontinuing the deduction for mortgage interest.

But, that deduction is so entrenched that it would be a bold Federal Goverment which would even consider it.

You do have a definite advantage there. The mortgage interest deduction is enormously expensive from a tax collection standpoint and I'm sure that your government has wished, more than once, they could snatch it away.

But, all that is the accepted way these days, though I still think that Tiger could have paid cash. You're going to be paying somebody at some time, so most think that the equity they build up if they have a mortgage is worth it.

Edited April 10, 2006 by patricia

[marcello]

It didn't say anywhere, that I could see in either of those stories, that Tiger had a mortgage.

Don't worry about poor Tiger. Too bad he's not a jazz fan.

Edited April 10, 2006 by marcello

[patricia]

It didn't say anywhere, that I could see in either of those stories, that Tiger had a mortgage.

The initial post said that he paid 8 million down and that his mortgage payments would be $177,400.00 per month. If that's not true, then we're talking about something else.

Edited April 10, 2006 by patricia

[Dan Gould]

Several points, Patricia:

Even if one misses a payment and is threatened with foreclosure, it is still likely, unless the housing market has slumped terribly in the interim, that the house may be put on the market, with the mortgage being paid off (at minimum) and possibly still clearing some cash from the deal.

In the US, there is a law which states that the total cost of credit must be disclosed to a borrower. So it is not true that "Few actually calculate what they will be paying for their house at the end of the lending period, twenty or thirty years from the initial down payment." That number is right there in black and white, and the buyers sign that sheet of paper at the closing table.

Given the purchase price of a house, it is virtually impossible for at least 90% of current homeowners to pay cash for their home. They have no choice but to seek a lender. It is certainly true that the total cost of that loan is, over the course of 30 years, astronomical. But what is worse? Throwing away $800 a month to rent, or paying $1200 in principal, interest, insurance and taxes, to own your home, and to build equity in its ever appreciating value?

It seems clear to me that it is mostly a psychological thing with you, as you continue to say that banks "own" your property. They do not. If they did, would you have the right to sell it?

[ejp626]

It seems clear to me that it is mostly a psychological thing with you, as you continue to say that banks "own" your property. They do not. If they did, would you have the right to sell it?

Well, you don't really have the right to sell it for an amount that will not pay off the mortgage. In a scenario like that, there would be some intervention on their part. If there has been a collapse in the housing market, there's not that much they can do, but if you are trying out some strange tax avoidance scheme, they would definitely take action.

Still, given U.S. tax law, it generally makes sense to take out a reasonable sized mortgage. However, in Tiger's case, he is such a high earner, that the deductions on schedule A (and even the standard deduction) will have been squeezed down to nothing and the AMT will then come into play. In such a case, he would probably be better off paying mostly cash. In addition, he should find a way to claim part of the property as business-related (surely there's a driving range) and thus take the depreciation on that to offset his other income.

[Soulstation1]

could you imagine getting behind 1 month on tiger's mortage payment.....

maybe tiger's looking for some tax breaks, i'm sure the man ain't got many.....

[The Magnificent Goldberg]

In the US, there is a law which states that the total cost of credit must be disclosed to a borrower. So it is not true that "Few actually calculate what they will be paying for their house at the end of the lending period, twenty or thirty years from the initial down payment." That number is right there in black and white, and the buyers sign that sheet of paper at the closing table.

It's probably 40 or more years since mortgage lenders in Britain were offering mortgages at fixed rates. With a variable rate mortgage, it's not possible to know how much it will cost 30-40 years in the future. I guess you don't have variable rates in the US.

MG

[Soulstation1]

in the US we have variable rates on mortages

Edited April 11, 2006 by Soulstation1

[The Magnificent Goldberg]

in the US we have variable rates on mortages

So how can a lender calculate at the start the full cost of the mortgage, as Dan said?

MG

[Soulstation1]

i'm not sure about the final numbers, i was told never sign a variable mortage

i've been at 9.5 % for 12 / 13 years

ss1

Edited April 11, 2006 by Soulstation1

[ejp626]

in the US we have variable rates on mortages

So how can a lender calculate at the start the full cost of the mortgage, as Dan said?

MG

Variable rate mortgages are possible but fairly uncommon in the US. Most people do have fixed rate mortgages. Since the rates are all pretty much the same across the board, there is less room for interest rate abritrage (as in the UK). Refinancing loans is certainly possible but interest rates have to drop a lot to make it worthwhile. Thus, it doesn't seem to be nearly the sport it is in the UK where many people refinance every few years (what a waste of resources).