Thursday, June 04, 2009

Yikes, Treasury Sec. Geithner the financial wizard...?

Well, maybe not. One of the many problems with taking a public role like Treasury Secretary Geithner's is that your entire life becomes fodder for the many bloggers with too much time on their hands.

When Secretary Geithner decided to move to Washington he put his home in Westchester on the market for $1.635 million. After little movement, he lowered the price to $1.575 million but there were still no takers. The current asking price is $25k less than what the Secretary of the Treasury PAID in 2004.

Now comes word that Sec. Geithner has rented the home for $7,500/month. Here's where we get to do some fun math .....

Assuming that Sec. Geithner has been diligent about refinancing he could have an interest rate as low as 6.5% for a 30 year mortgage. Apparently, he has two mortgages against the property but since he owes over $1.25 million it's likely that they are super-jumbo mortgages and these tend to carry higher than normal interest rates.

Oh, and the next time you want to complain about your real estate taxes consider Mr. Geithner's $27,000 annual tax bill.

So here's the breakdown:

Monthly mortgage: ($7,860)
Taxes: ($2.250)

Rental income: $7,500

Monthly loss: ($2,600)

Clearly this is a rough estimate and excludes any possible tax benefits (although those limited tax benefits are shrinking in NYS).
That's some pretty smooth financial management :) But I'm sure he'll do a much better job fixing our national financial system :(

BTW: Here's a picture of Sec. Geithner's $1.6 million house - nice but it doesn't have a real "wow" factor.

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