|
Question about escrow accounts - is it likely that I'm paying a service fee for this? Any benefit for me to do it myself? I'm very close to eliminating PMI on my mortgage (around $17 a month since when I refinanced I was so close to 80% LTV), and was wondering if there was any benefit to just paying taxes/insurance myself. I wouldn't worry about not socking the money away, but I also don't really care about the $10/year I'd earn in interest if it were one of my accounts instead.
|
#
?
Apr 3, 2013 13:48
|
|
|
|
| # ? May 29, 2024 06:40 |
|
|
Since I was just researching this.... one lender said there is no difference between having your money in an escrow account vs. paying it yourself. No fees for an escrow account, and they'd give the same rate on the loan either if you use or do not use an escrow account. The only difference is that I would not make interest on the money being in that escrow account. Another lender said that I would be paying a higher interest rate if I didn't put my money in an escrow account. So... I guess it all depends. What were you offered when you got your loan originally?
|
|
#
?
Apr 3, 2013 14:10
|
|
|
Astro7x posted:Since I was just researching this.... one lender said there is no difference between having your money in an escrow account vs. paying it yourself. No fees for an escrow account, and they'd give the same rate on the loan either if you use or do not use an escrow account. The only difference is that I would not make interest on the money being in that escrow account. I don't specifically remember but I'm guessing my CU would not make me pay a higher rate if I didn't have my escrow with them. It sounds like it's not worth pursuing for now, especially if it's already set up and not costing me anything extra (except for the pittance of interest).
|
|
#
?
Apr 3, 2013 14:42
|
|
|
dreesemonkey posted:Question about escrow accounts - is it likely that I'm paying a service fee for this? Any benefit for me to do it myself? I'm very close to eliminating PMI on my mortgage (around $17 a month since when I refinanced I was so close to 80% LTV), and was wondering if there was any benefit to just paying taxes/insurance myself. It's illegal for banks to charge fees for escrow accounts afaik. You can ask your bank about getting an escrow waiver, but they will most likely either say no or charge you a fee. Banks like escrow because they get the interest, but also because it removes the risk of property taxes going unpaid and a lien being placed on the home. Tbh I wouldn't worry about it. Asking for escrow to be waived can be big headache. I have a question for the thread. Anyone have any experience with 201k loans? I'm interested in buying a fixer upper but a lot of my money is tied up in my current home, which would make it hard to pay 20% down and pay to fix up a house while living in my current house. And I'd rather not live there while I gut it.
|
|
#
?
Apr 3, 2013 14:44
|
|
|
Hashtag Banterzone posted:
I did it, it wasn't a big deal at all. I think they charged us something to do so. I prefer to manage the property tax ourselves rather than relying on the bank to estimate things correctly, the less I have to interact with them the better.
|
|
#
?
Apr 3, 2013 14:58
|
|
|
Are we talking about "escrow from the date of sale", or sometime later? My mortgage required me to use an escrow account, but only for the first year. After that, it becomes optional (but I use it anyway, because it's really convenient to have the bank calculate how much money to set aside to make sure my (changing) property tax bill gets paid the right amount, on time, always).
|
|
#
?
Apr 3, 2013 23:53
|
|
|
Hopefully this is the best place to ask this question as I think it probably applies most to this thread. I'm early in the process of building a home at the moment, about 3 weeks into a process of 6 months at the moment. So far everything is going swimmingly, we were pre-approved for well over what we're going to spend on the home and have supplied all the necessary info and documents to the mortgage company and have our down payment set aside already. The dilemma I'm faced with is that I'm potentially going to need to trade in my car somewhere in the next 6 months. My job has me driving a lot for work and my company provides me a car allowance. Because it's a car allowance, the car is under my name, hence the loan is in my name as well. The car allowance more than pays for the monthly payment on the car, however, there is a stipulation that our vehicle isn't allowed to go over 100k miles. Currently I'm at about 80k at the moment, but I drive around 35k miles per year, so I'll be adding roughly another 17,500 miles before our forecast close date. In my mind, this leaves me with two options. Try to look into trading the car in soon so the new loan has been established for a couple months before we go to close or try to hold off until after we close on the house. I'm finding pros and cons to both is my issue. I asked my mortgage broker what they thought and I got a fairly quick and canned answer that it would be best to wait if possible. I get how that is definitely true for the mortgage, obviously, however that's going to put my vehicle at potentially right around 100k miles, at which point it becomes hard to trade in a car and get any solid value out of it. KBB still gives my vehicle a decent trade-in at 100k, but I know a lot of dealers don't like taking in cars that high in mileage so they send them off to auction and because of that, will low-ball the crap out of you on the trade in. So by waiting, I keep my risk of issues at closing super super low, but I also run the risk of losing quite a bit of money at trade-in. If I trade in now though, my payment would likely stay more or less the same, but my debt to income ratio would go up. I would probably be better off as far as the trade-in goes though. For full disclosure, I have no other installment debts, my fiancee's car is paid in full and both of us pay our credit cards in full every month. Does anyone have any experience with a similar situation?
|
|
#
?
Apr 4, 2013 03:50
|
|
|
How is your DTI going to change if your new car payment is the same amount as the old one? I'd be more worried about how a car purchase affects your cash reserves. I can't speak to this exact situation though, it sounds like you are somehow stretching the mortgage application process out over six months? How does that work? You don't want to apply for a car loan between mortgage underwriting and close, for sure.
|
|
#
?
Apr 4, 2013 04:13
|
|
|
So my wife and I are looking into buying a house and we're using those three calculators on the front page. Our combined income (with my wife on unemployment) is something like $110,000 before taxes, assuming her unemployment is equivalent to $18,000/yr. The lowest 15 year loan shows we can afford something like a $350,000 house. This doesn't seem right since the monthly payments are something in the ballpark of $3,300. After taxes and withholding, that's a huge chunk of our net income (approaching or exceeding 50%). Is this right? Where do these calculations come from? Realistically, what should our budget look like? I know the rule of thumb is 2.5x our gross income, but I also see the OP recommends using the calculators and picking the lowest estimate.
|
|
#
?
Apr 4, 2013 04:29
|
|
|
If I am going to close on a house, when should I kill off my current lease? After the inspection? Right before the closing?
|
|
#
?
Apr 4, 2013 05:06
|
|
|
Just closed on my custom build today at 3.875%. The house is worth so much more than what we paid to build it we have enough instant equity that we didn't need PMI. Our payment is lower than I thought it would be and we know the taxes are even estimated way too high in the escrow. I'm pretty happy. There are a few cosmetic things left to do and the builder is totally flaking out on us at the end to the point that he is "no longer in the house building business"; but I don't even care at this point because I only owe him $4500 and he just signed away his lean on the property. He could just disappear and never finish and not get paid at this point for all I care. Now I just need some grass and a sprinkler system. Is $5500 too high for 18 pallets of grass, a system, and 4 flower beds?
|
|
#
?
Apr 4, 2013 05:45
|
|
|
We closed today. After closing the realitor gave us an envelope with a thank you card, a gift card to a home improvement store for $65, and a personal check from her for $50. Is this normal or do we just have a really awesome realitor?
|
|
#
?
Apr 4, 2013 05:50
|
|
|
Ohad Hartmar posted:We closed today. After closing the realitor gave us an envelope with a thank you card, a gift card to a home improvement store for $65, and a personal check from her for $50. Is this normal or do we just have a really awesome realitor? Well, gifts of up to 50 dollars value are legal where I'm from and super common, and it's certainly not uncommon for people to stretch that limit, but usually with things like wine bottles and housewarming packages that are harder to cash-value.
|
|
#
?
Apr 4, 2013 06:02
|
|
|
Wagoneer posted:So my wife and I are looking into buying a house and we're using those three calculators on the front page. Our combined income (with my wife on unemployment) is something like $110,000 before taxes, assuming her unemployment is equivalent to $18,000/yr. The lowest 15 year loan shows we can afford something like a $350,000 house. This doesn't seem right since the monthly payments are something in the ballpark of $3,300. After taxes and withholding, that's a huge chunk of our net income (approaching or exceeding 50%). Is this right? Where do these calculations come from? Realistically, what should our budget look like? I know the rule of thumb is 2.5x our gross income, but I also see the OP recommends using the calculators and picking the lowest estimate. The calculators will tell you how much a bank is likely to be prepared to lend you. But only you can decide how much you can actually afford. So much depends on the cost of your standard of living, your desire to save, etc. that it's impossible for anyone to tell you more than just total ballpark estimates. As an aside, though, it seems kind of weird to want to buy a house while your wife is unemployed. If she is actively seeking employment (and she has to by law, to collect unemployment checks), won't buying a house drastically reduce her options? And if she's unemployed right now, and your assumptions are based on that, this implies that maybe it's hard for her to find work in her field in your selected area. Surely it'd be better to find her that job, feel secure that it's permanent, and then seek a house? Insane Totoro posted:If I am going to close on a house, when should I kill off my current lease? After the inspection? Right before the closing? It depends on the terms of your lease, the closing term (30 day? 45? more?), and how much overlap you want between the final purchase date and your move-in date. I strongly recommend at least a week or two gap if you have any work you anticipate doing on the house before moving in... and it's hard to estimate that before you get your inspections. Also, your inspections may reveal something that makes you want to walk away; having already terminated your lease could make that a tougher decision. So, I'd say if it's feasible, wait till you've done your inspections, and then decide your overlap if any, and then give notice; but, read your lease terms and make sure that makes sense for whatever they happen to be. Citycop posted:Now I just need some grass and a sprinkler system. Is $5500 too high for 18 pallets of grass, a system, and 4 flower beds? It depends on where you live (where I live, they grow grass very nearby, so I can literally go drive and pick it up in 20 minutes), and how big/fancy your "system" is (I'm sure they vary from super-cheap basic to super-expensive fancy) and if you're paying labor to have it all put in, or doing it yourself. Ohad Hartmar posted:We closed today. After closing the realitor gave us an envelope with a thank you card, a gift card to a home improvement store for $65, and a personal check from her for $50. Is this normal or do we just have a really awesome realitor? Yeah. Realtors live and die by word-of-mouth recommendations. It's very wise to end things on a high note and give a great final impression. It's been three years and my realtor still sends me (and all of his former clients) a custom mix CD of weird christmas music every year.
|
|
#
?
Apr 4, 2013 06:35
|
|
|
Thanks for the info on when to end my lease. My realtor just paid for our home inspections.....? That is a hell of a parting gift for a house we might now buy!
|
|
#
?
Apr 4, 2013 06:40
|
|
|
Leperflesh posted:
I hope it's really uncomfortable poo poo like Kids Sing Christmas -type albums because that is kinda awesome.
|
|
#
?
Apr 4, 2013 06:52
|
|
|
While we were driving around town looking at houses for several months, he introduced us to that song that goes "I'm at the taco bell (what?) I'm at the pizza hut (what?) I'm at the cooooombination pizza hut and taco bell" because he thought it was hilarious. He also had tons of great jokes. We taught him this one (say it with an Irish accent): "Why does Irish Bean Soup always have exactly 239 beans?" "Because one more bean would be two faarty" and he told us his daughter thought it was hilarious. So basically yeah, the guy's a riot.
|
|
#
?
Apr 4, 2013 07:03
|
|
|
slap me silly posted:How is your DTI going to change if your new car payment is the same amount as the old one? I'd be more worried about how a car purchase affects your cash reserves. Sorry, I guess DTI isn't the right term, mostly just that I'll have more debt in general. I owe 17k on the vehicle now and the trade estimates are roughly that as well. I'm not really planning on putting much money down on the car, which I didn't last time I traded in either, so assuming I were to get a vehicle roughly in the same price range, with a similar interest rate, my monthly payment should be about the same and it won't really affect my cash reserves much at all. As for the 6 months, that's the home build. We have to start the mortgage process now so the building can start, but right now nothing everything is in the sort of pre-approval stage. We can't lock our rate in until 60 days from the close, so we're not actually officially into the process yet. I'm just worried that if I wait to trade the car in that either the house is going to take an extra month to build and I'll go over 100k miles and start getting in hot water about it with my job and that I'll also take a couple thousand dollar hit on my trade-in depending on the dealer. I'll owe less on the car at that point, but I'm worried that the hit will be big enough that I'll be upside down.
|
|
#
?
Apr 4, 2013 12:43
|
|
|
Just closed on a house for my dad today. After the closing we went straight to the house to meet a guy who was going to give us an estimate on refinishing the hardwood floors. He gets there, pulls up an HVAC vent from the floor, looks underneath, and says "Hey, these aren't hardwood, they're plywood with a top finish." The MLS listing said hardwood floors and the listing agent specifically represented hardwood floors when I asked her about them during a tour. DO NEVER BUY.
10-8 fucked around with this message at 13:50 on Apr 4, 2013 |
|
#
?
Apr 4, 2013 13:45
|
|
|
10-8 posted:Just closed on a house for my dad today. After the closing we went straight to the house to meet a guy who was going to give us an estimate on refinishing the hardwood floors. He gets there, pulls up an HVAC vent from the floor, looks underneath, and says "Hey, these aren't hardwood, they're plywood with a top finish." The MLS listing said hardwood floors and the listing agent specifically represented hardwood floors when I asked her about them during a tour. DO NEVER BUY. So, what is your recourse here? Are you planning to sue?
|
|
#
?
Apr 4, 2013 14:07
|
|
|
lord1234 posted:So, what is your recourse here? Are you planning to sue? I'm a lawyer but I don't practice in real estate so I'm talking today to the attorney who handled the closing. We have some options but not many, and most are probably cost-prohibitive even assuming I don't charge my dad legal fees.
|
|
#
?
Apr 4, 2013 14:27
|
|
|
10-8 posted:I'm a lawyer but I don't practice in real estate so I'm talking today to the attorney who handled the closing. We have some options but not many, and most are probably cost-prohibitive even assuming I don't charge my dad legal fees. In MA, I assume this would fall under not only real estate law, but also consumer protection...the damages(IANAL) are probably something like "the amount of money it would take to install hardwood in the home", and as such, I would get an estimate for how much that will cost as a first step...
|
|
#
?
Apr 4, 2013 14:33
|
|
|
Plywood with a top finish sounds like engineered hardwood to me. If that's the case I think that counts as hardwood. Edit: Also, most engineered hardwood can be refinished at least once.
|
|
#
?
Apr 4, 2013 15:14
|
|
|
I've been reading through the thread randomly - lots of great info and I must have read the OP once every 6 months for two years now! That 38 page guide by MBJ in the OP was ridiculously helpful in demystifying the process for a first time buyer. I've been saving for a home pretty aggressively for over a year or so. However, my folks realized it would be cheaper for my pops tax-wise to pitch in towards my down payment, co-sign and itemize my mortgage interest deductions. He's retired with a decent income so this year's tax bill after he lost a bunch of deductions was quite a surprise! Suddenly we are all looking for homes every day online, etc (it's fun!) and now I'll be looking for a real estate agent. I just turned 26 and have 20k for a down payment. My credit union is pretty great and I recently opened a line of credit with them (my 4th overall) - when they checked my score for that I found out it was 797 and the manager high-fived me, hah. I plan on shopping around but I like the personal interaction at my CU and in my loan range I'm looking at rates for a 30 year fixed at 3.5%, 15 year fixed 2.75%. If my pops, who has some crazy credit score above 830, is co-signing with me I should basically expect to attain those low rates right? When I was speaking with the manager there she basically said my debt ratio is great and that I should have no problems getting financed. I've got 2k on the side so far for closing costs and plan to just add 1k onto the pile a month while I look for a home, so hopefully I'll be ready and not financially tight when it is time. I live in south east Florida and right now just seems the best time to buy for someone my age. I'm looking at homes in the 80k-120k range. It just seems like the second a decent house is put up onto Realtor.com it gets snatched immediately! According to the OP I would want to get pre-approved by my credit union before speaking with a realtor? I'm supposed to call the mortgage rep for my credit union tomorrow actually to get time frames on everything and get the ball rolling on all of this. I'm really excited about the process but no matter how much I try to educate myself I feel like there's a lot I am missing :/ Incredulous Dylan fucked around with this message at 17:50 on Apr 4, 2013 |
|
#
?
Apr 4, 2013 17:32
|
|
|
Incredulous Dylan posted:If my pops, who has some crazy credit score above 830, is co-signing with me I should basically expect to attain those low rates right? I've seen it advised in many places that if you don't NEED a cosigner to get a decent rate, you don't want to have one. I haven't seen a justification at length on it though, and I could probably get a slightly better rate than the 3.7% that I saw recently on a good faith estimate. Is it widely considered a decent idea to have parents cosign? Edit: My median score was 738. I think that puts me near the best rates, but not perfect. Twerk from Home fucked around with this message at 17:50 on Apr 4, 2013 |
|
#
?
Apr 4, 2013 17:47
|
|
|
Incredulous Dylan posted:I've been reading through the thread randomly - lots of great info and I must have read the OP once every 6 months for two years now! That 38 page guide by MBJ in the OP was ridiculously helpful in demystifying the process for a first time buyer. I've been saving for a home pretty aggressively for over a year or so. However, my folks realized it would be cheaper for my pops tax-wise to pitch in towards my down payment, co-sign and itemize my mortgage interest deductions. He's retired with a decent income so this year's tax bill after he lost a bunch of deductions was quite a surprise! AFAIK, if you have above a 740 credit score, there is "no higher level". Having your dad cosign for you is probably not worth anything(unless you for some reason need his salary to pay your mortgage...)
|
|
#
?
Apr 4, 2013 17:48
|
|
|
Ah, it seemed like they were saying that to itemize the mortgage interest deductions his name would need to be on the loan. I'll definitely be able to easily cover the 10-30 year mortgage plans going off of the estimates provided by my credit union's website so I wouldn't need his help financially. I do want to be conservative though because you never know what can happen in life. I just don't make so much that I would benefit from itemizing and it would save him like 9k a year apparently! v Great advice - this was actually a plan suggested by our family's tax guy when he was done handling our stuff for this year. I don't know jack about taxes but I do know crazy tax plans belong in movies and in corporate board rooms Incredulous Dylan fucked around with this message at 18:10 on Apr 4, 2013 |
|
#
?
Apr 4, 2013 17:53
|
|
|
You should consult with a tax professional before moving forward with this plan. Make sure you know exactly what your dad has to do in order to be allowed to itemize the interest. I would imagine (but I don't know for sure) that he'd have to actually be paying the loan from his own money. The IRS tends in general to care more about "who is actually paying" rather than "whose name is on what document." There may also be a residency requirement (the mortgage interest deduction is intended for people who buy and live in their home, not for investors who rent out a property they don't live in). Start with IRS Publication 936. Leperflesh fucked around with this message at 18:08 on Apr 4, 2013 |
|
#
?
Apr 4, 2013 18:06
|
|
|
I have a dusty old 401(k) from a college job that I completely forgot about. It's $8k or so, and I'd like to turn it into a first time home buyer down payment. I'm thinking the best treatment would be to roll it over into a new IRA and then take a distribution from it when I close on a house. Am I missing anything?
|
|
#
?
Apr 4, 2013 18:37
|
|
|
Incredulous Dylan posted:I've been reading through the thread randomly - lots of great info and I must have read the OP once every 6 months for two years now! That 38 page guide by MBJ in the OP was ridiculously helpful in demystifying the process for a first time buyer. I've been saving for a home pretty aggressively for over a year or so. However, my folks realized it would be cheaper for my pops tax-wise to pitch in towards my down payment, co-sign and itemize my mortgage interest deductions. He's retired with a decent income so this year's tax bill after he lost a bunch of deductions was quite a surprise! With regards to the financing process - the earlier you get prequalified, the better, though a lot of first time buyers meet with a Realtor and THEN go meet with lenders based on their recommendations. It can really go either way, though getting lender qualification first is going to result in much more motivated and helpful Realtors as they know that A.) you're serious and B.) you can afford the houses they show you. I usually recommend people speak to a lender as soon as possible, even if it's just to get educated early on in the process. Demystifying the financing portion is crucial to making good decisions. I actually run a Realtor finding/evaluating/matchmaking service along with Have Some Flowers! (who contributed a lot to the OP) and have already helped out some goons in the SE Florida area find representation. I'd be happy to help you out in the process and give you some recommendations/agent profiles to consider, if you're interested. It doesn't cost anything and I've been working in the area already so it should be faster than usual, and we can give you a good rundown of the pros/cons of a given agent. No matter who you end up going with, make sure to find someone who has good programs for first-time homebuyers. Many agents will have a mini-course, or at least a sit-down orientation session for new buyers, and any good agent is going to have lenders they will recommend first-time buyers to who are willing to educate and explain all the technical details of the financing process. Drop me a line by PM or at kerry@maxavenue.com if I can help out.
|
|
#
?
Apr 4, 2013 18:46
|
|
|
canyoneer posted:I have a dusty old 401(k) from a college job that I completely forgot about. It's $8k or so, and I'd like to turn it into a first time home buyer down payment. I think there's a way to use your 401(k) for housebuying without taking an early distribution (and the tax penalty that comes with that)? Not sure, but ask in the long term investing and retirement thread because those guys know everything about tax-deferred savings accounts and their rules.
|
|
#
?
Apr 4, 2013 19:26
|
|
|
So I'm shopping for loans now. Do I get a broker or go out on my own? Looks like I can get a 3.375% rate which looks too good to be true...
|
|
#
?
Apr 4, 2013 20:08
|
|
|
I Love You! posted:Drop me a line by PM or at kerry@maxavenue.com if I can help out. Thanks for the tips - I'll drop you a line after I speak with my mortgage rep at the credit union tomorrow. That should give me an idea of what I'll be working with!
|
|
#
?
Apr 4, 2013 20:30
|
|
|
Baruch Obamawitz posted:So I'm shopping for loans now. Do I get a broker or go out on my own? Looks like I can get a 3.375% rate which looks too good to be true... It's not. But most every bank will offer a given rate; what matters is, how much does that rate cost you? Points/closing costs/fees all have to be factored in. I favor brokers. Other goons don't. I'm not sure there's a consensus. At the very least, if you're not using a broker, get several quotes all on the same day and be sure to compare based on fees.
|
|
#
?
Apr 4, 2013 20:47
|
|
|
I've got one $280 in fees at 3.375% and one ~-$100 in fees at 3.5%.
|
|
#
?
Apr 4, 2013 21:17
|
|
|
Broker (negotiate the closing costs) or shop a credit union. I find that brokers get closed faster, and they will work for cheap if they think you will go somewhere else just because they have fixed costs and doing your loan doesn't really cost them any extra but time that their processors normally waste posting to SA forums. I have negotiated rates with my credit unit too to get below the advertised rate if someone else is cheaper. It took them 4 months to close my refi though. Banks can be good too it just depends which one you chose. I guess this whole post is unhelpful. Shop around must be the moral.
|
|
#
?
Apr 4, 2013 21:17
|
|
|
So help me out here: I've got three offers, each with different quotes for: 1) appraisal/credit report/flood/application fee/lender's credit 2) settlement/title insurance 3) tax/transfer 4) escrow Pretty much the only actual cost that will differ between the offers is #1, right? #2 is based on the settlement firm, #3 is up to the gub'mint, and #4 is based on the day of the month and (again) taxes/insurance, right? So basically, I only compare #1 between offers? (assuming same rate) Because I'm at -$3665 for one, $474 for another, and -$22.68. So obviously take the one that's paying me $3665 to use them, right?
|
|
#
?
Apr 4, 2013 22:27
|
|
|
That's a pretty big difference - are you sure the rates are the same and you're counting the origination fee and points correctly? Do you have a GFE from everybody? You can shop around for title services. If one lender is quoting you a high price with their favorite title company you might be able to do a little better http://www.mtgprofessor.com/ext/partners/ShopTitleInsurance.aspx Items 3 and 4 are what they are, though.
|
|
#
?
Apr 4, 2013 23:11
|
|
|
slap me silly posted:That's a pretty big difference - are you sure the rates are the same and you're counting the origination fee and points correctly? Do you have a GFE from everybody? We've already got the title company in the ratified contract. Right now it's just the loan to figure out. Here's what I got:  vs.  Take #2, right? (although I really should get a GFE, because that math looks all screwed up)
|
|
#
?
Apr 4, 2013 23:40
|
|
|
|
| # ? May 29, 2024 06:40 |
|
|
The way I see it, if I don't understand it I am probably getting ripped off. Don't take it lightly, make sure you understand, and ask questions. If they dodge, they are probably trying to rip you off.
|
|
#
?
Apr 4, 2013 23:52
|
|
