Amazing Maths

[Philmc1]

On the front page of yesterday's Sunday Star Times on Banks being easier on Loans.
John Bolton from Squirrel Mortgages is quoted as saying he had an easy rule of thumb to define the likelihood of a loan being approved:
"Take your household income, divide it by two and multiply it by eight and as long as you're borrowing less than that, it's a piece of cake all the way up to 95%"

Is this so he can use both hands to work that one out or is his calculator missing the number 4 - I'm not sure I'd have him doing my mortgage calculations.
May be he thinks the banks will be impressed by that equation.

And if you can't work it out, get out of property investment real fast.

cheers

Phil

[Steve Netwriter]

Maybe it's not commutitive in la la land

[Magnum PI]

Hey...

Just did a rough calculation of my Home loan & that seems to be roughly right. Although on the conservative side... which in perspective is a good thing.

Doesn't hurt to ask the bank in person though and find out for yourself first hand.

[AndrewK]

Magnum PI - So are you saying you agree with the way he is calculating this figure???

[mortgage broker]

Philmc1, It seems more complicated when you do it that way, plus it seems very different to what everyone else has been using.

I am going to start dividing by 4 and multiplying by 16 for my clients.

[CJ]

I prefer to keep it simple so will be multiplying by 4 but then dividing by 1.

[Magnum PI]

income x 4 = loan

Nah thats too hard to remember this is way easier and sounds more like you know what your talking about...

income % 2 x 8 = loan

Haha

[k1w1]

Income / 3 * 12

The only true way, you numpties.

[muppet]

So far we have............
1. Take your household income, divide it by two and multiply it by eight
2. I am going to start dividing by 4 and multiplying by 16 for my clients.
3. Multiplying by 4 but then dividing by 1.
4. Income % 2 x 8 = loan

So we take income as $100,000 then we have........
1. $100,000 divided by 2 times 8 = $400,000
2. $100,000 divided by 4 times 16 = $400,000
3. $100,000 times 4 divided by 1 = $400,000
4. ?????????

[k1w1]

Sharp as a marble today, muppet. :-)

[muppet]

Yes, very well rounded.

[Magnum PI]

Oh snap...

So far we have............
1. Take your household income, divide it by two and multiply it by eight
2. I am going to start dividing by 4 and multiplying by 16 for my clients.
3. Multiplying by 4 but then dividing by 1.
4. Income % 2 x 8 = loan

So we take income as $100,000 then we have........
1. $100,000 divided by 2 times 8 = $400,000
2. $100,000 divided by 4 times 16 = $400,000
3. $100,000 times 4 divided by 1 = $400,000
4. ?????????

Caught out again! When I typed % I meant / (divid by), for some reason I thought the two circles would signify a fraction, but no its the percentage sign.

Anyways I feel like a total Muppet now... Thanks Muppet!

[muppet]

To update:
So we take income as $100,000 then we have........
1. $100,000 divided by 2 times 8 = $400,000
2. $100,000 divided by 4 times 16 = $400,000
3. $100,000 times 4 divided by 1 = $400,000
4. $100,000 divided by 2 times 8 = $400,000

When first saw a mortgage broker about eight years ago, I told him what equity I had in my property he told me that was worth half a million dollars.

My income at the time was about $58,000. We paid $132,000 for the first property we bought. Since sold and sold again a year or so ago for about $270,000.

[Philmc1]

I see a few have got it, some a bit slower than others.
I'm just wondering how many put it in the too hard basket and moved on to another thread.

We should have a competition to see who comes up with the most complicated equation for proving that 4X1=4.

I'm sure the banks would be impressed - a bit like their equations for charging penalty fees on breaking mortgages early

Have a good evening

[Steve Netwriter]

I think we need to go back to basics:


From: http://www.youtube.com/watch?v=iKTCTy4UsUg

2x2=5?

I can't believe I just sat and watched that !