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Indiana is a recourse state. The bank can pursue your wife for the deficiency if they think she can come up with the money. It would be best for all if you can clean up the house and sell it for enough to cover the remaining mortgage. Plan B should be a short sale so that the bank agrees to not pursue a deficiency judgement.
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May 12, 2014 16:00
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SlapActionJackson posted:Indiana is a recourse state. The bank can pursue your wife for the deficiency if they think she can come up with the money. It would be best for all if you can clean up the house and sell it for enough to cover the remaining mortgage. Plan B should be a short sale so that the bank agrees to not pursue a deficiency judgement. Alternatively, what is the rental market in that area like?
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May 12, 2014 16:02
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OneWhoKnows posted:Alternatively, what is the rental market in that area like? Don't even. Then you'd have to fix it up, maintain it, *and* act as a landlord.
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May 12, 2014 16:13
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silvergoose posted:Don't even. Yeah, there's no way I'd do that.
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May 12, 2014 16:28
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ExtrudeAlongCurve posted:No one can predict how the market will do in the future. Maybe you will get 4%. Maybe you will get higher. Or maybe you will get a measly 1%. This also is dependent on diligently investing money you would be using to overpay on a mortgage that didn't have a better use elsewhere (i.e. maxing retirement accounts should probably come before overpaying on a mortgage). I think this point is the one I'm trying to hammer home. It's not a matter of 'oh can I make more than 3.5% every year in stocks vs a house' - right? Because presumably you don't just have 250k-350k sitting around in assets. When you take out a giant loan, you owe 3.5% compounding interest on the loan amount - which means you're immediately incurring buttloads of penalties on your savings-abilities on your current income, today, right now. Savings-abilities that also compound for your net worth over time. so in my mind - if I'm understanding this correctly, and someone stop me if I'm wrong - even if you were making stellar returns on the amount of interest repayment money you're instead putting into stocks (which could implode ala 2008 at any time) - you still have to account for the penalty to your net-worth-building-efforts that having a compounding interest loan on let's say a 250k amount... which destroys the difference in return on the - let's say to make it easy - 10k in stock investments you can build up over a years time at - let's say 10% ROI. I don't have excel infront of me, but I'd love to just run those numbers real quick and make sure I'm not missing something.
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May 12, 2014 16:36
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mindphlux posted:It's not a matter of 'oh can I make more than 3.5% every year in stocks vs a house' - right? Things this scenario disregards: - any amount your home value rises or falls - any amount you have to pay for maintenance - any tax savings you get for mortgage interest or rental depreciation - the effect of inflation and using long-term debt as a hedge "When you take out a giant loan, you owe 3.5% compounding interest on the loan amount - which means you're immediately incurring buttloads of penalties on your savings-abilities on your current income, right now." I don't know what you're getting at here.
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May 12, 2014 16:44
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SlapActionJackson posted:Indiana is a recourse state. The bank can pursue your wife for the deficiency if they think she can come up with the money. It would be best for all if you can clean up the house and sell it for enough to cover the remaining mortgage. Plan B should be a short sale so that the bank agrees to not pursue a deficiency judgement. On a plus side you are not responsible for your spouses debts in Indiana. If this ruins your wives credit you can still ride out the shitstorm by keeping your credit good. You should pursue cash for keys, short sale, whatever you can to avoid foreclosure if you can though.
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May 12, 2014 16:57
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mindphlux posted:Because presumably you don't just have 250k-350k sitting around in assets. I agree with everything slapmesilly said, including her confusion at your comments about damage to net worth. But I just wanted to add confusion as to this statement. Why not? If you save 50% of your net worth as a dual income family where your net income is ~100k (so about 65k gross per person), it only takes 5 years to get to 250k saved. edit Wait, or are you not considering stocks as assets? Rurutia fucked around with this message at 17:14 on May 12, 2014 |
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May 12, 2014 17:11
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I finally found a home in the Denver area for a reasonable price and was able to submit an offer as soon as it hit MLS. I'm pretty excited. The market is absolutely nuts in the Denver metro right now (see my earlier post history in this thread), but having contracted with a buyer's agent who was able to move quickly on showings for good properties was a huge help. My major lesson was that if your buyer isn't getting you into places and scheduling showings as soon as you see them hit MLS, don't be afraid to move on quickly. $240k, 1868 finished sq. ft., 1 car garage, 3 ba, 1 full, 2 3/4ths baths, den, all appliances included, mid-sized backyard, close to shops and the major arteries into Boulder and Denver. My drive distance to work increases to 19 miles one way (38 miles R/T), but the home is in (what appears to be) pristine condition, hardwoods throughout, etc. Very little updating and almost no major issues during the walkthrough visual inspection. It's a half block from a nice little lake and walking distance to a retail center. I feel like I got into a great area that will appreciate well. Also, no HOA!  I have a real inspection scheduled for tomorrow, and I guess my appraisal sometime soon.  There are so many dates and deadlines I'm trying to juggle now that it's getting a bit overwhelming - inspection deadline, property insurance objection deadline, appraisal deadline, first time homebuyer class + credit deadline, etc. It's been a really trying process so far but I'm confident that it will be worth it. It better be worth it. 
ex post facho fucked around with this message at 17:27 on May 12, 2014 |
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May 12, 2014 17:25
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Elephanthead posted:On a plus side you are not responsible for your spouses debts in Indiana. If this ruins your wives credit you can still ride out the shitstorm by keeping your credit good. You should pursue cash for keys, short sale, whatever you can to avoid foreclosure if you can though. Potentially just shirk it off on a cash sale, restructure the remaining debt into a longer loan or using your own home equity to pay it off and just eat the difference (which is hopefully not >30k?) 30k debt sucks and it would suck to get caught with it, but you've been pretty solid from what I remember of your management so it might be better than destroying your credit. Rurutia posted:I agree with everything slapmesilly said, including her confusion at your comments about damage to net worth. But I just wanted to add confusion as to this statement. Why not? If you save 50% of your net worth as a dual income family where your net income is ~100k (so about 65k gross per person), it only takes 5 years to get to 250k saved. Not only ignoring stocks as assets, but also ignoring compound gains in investment opportunities. mindphlux posted:(which could implode ala 2008 at any time) If you had money in the market the day before the implosion in an S&P 500 index, you would have far outpaced 3.5% between then and now. If you took your money out after an implosion, that's bad investment behavior, not an opportunity cost. If you had your money in a house the day before the implosion, you could still be burned, but that's irrelevant to your loan (not entirely, but let's say that since it actually helps your position). You've got to be very long run in any long loan structure, so when you've forced yourself to think of a 30 year timeframe, the risk exposure of a few index funds isn't much. Once you're down to just a few years left on that mortgage/looking at retirement? Then seriously consider going into the equity because an implosion would suck. Also consider that standard type rule of "100-Age in high risk, Age is low risk" distribution of investments, and you can probably treat your mortgage like bonds. Diversification is the key thing, because you're comparing a risk asset with a much higher rate of return versus a no-or-lo risk asset with a much lower one.
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May 12, 2014 17:36
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gotcha. I must have been misunderstanding something - when I was looking at the numbers for myself, it seemed to make sense to at least aggressively build equity the first couple years until mortgage payments were around 50% principle 50% equity - but something about my assumptions of what would happen with money saved via stocks etc sounds like it's wonky. Thanks for the replies.
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May 12, 2014 17:40
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silvergoose posted:Don't even. Not as a permanent measure, but surely it's something to consider if they want to fix it up for sale and it doesn't move right away - unless the monthly mortgage amount isn't a huge burden for them.
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May 12, 2014 20:51
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OneWhoKnows posted:Not as a permanent measure, but surely it's something to consider if they want to fix it up for sale and it doesn't move right away - unless the monthly mortgage amount isn't a huge burden for them. We could absorb it but not easily. She's talking to a realtor tomorrow. Progress, it would seem.
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May 12, 2014 23:20
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If the difference in my monthly mortgage payment (with insurance and all other etc.) is only $33/month, does it make sense to take a higher loan rate at 4.625% instead of 4.375%? Basically, some forms from my lender are showing me that I'll have ~$3,369 in savings at closing if I take the higher rate of 4.625%. My monthly mortgage payments will be $33/mo higher than they would be at 4.375% over the life of the loan. To break even on the money I would save at closing, I would need to remain in the home for ~102 monthly payments or approximately 8 1/2 years. If my girlfriend/eventual wife and I plan on moving before or slightly after that period of time has elapsed, it's a no brainer to take the slightly higher rate to save significantly on closing costs, right? Someone check my thinking here. \/\/ - It's in Northglenn, so close enough. My round trip to Boulder from this place is about 38 miles. Not great, but still a reasonable distance for a house in the Denver metro area to me. You can basically write off living in a house anywhere closer than Broomfield if you're not in the low six figures. ex post facho fucked around with this message at 00:32 on May 13, 2014 |
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May 12, 2014 23:27
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a shameful boehner posted:There are so many dates and deadlines I'm trying to juggle now that it's getting a bit overwhelming - inspection deadline, property insurance objection deadline, appraisal deadline, first time homebuyer class + credit deadline, etc. It's been a really trying process so far but I'm confident that it will be worth it. Cool that you found a place in Broomfield! My process went about as smoothly as one could hope for (got keys two weeks ago), and it was still a long pain in the rear end. [Edit] Just saw you already scheduled the inspection. I was going to suggest the guy I used, because he was awesome.
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May 13, 2014 00:26
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^if it is Bromfield then close but not my neighbor.a shameful boehner posted:I finally found a home in the Denver area for a reasonable price... Not going to lie it sounds like you are going to be my neighbor. What cross roads will you be near?
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May 13, 2014 00:31
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It'll be off 104th, a few blocks to I-25.
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May 13, 2014 00:44
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a shameful boehner posted:Basically, some forms from my lender are showing me that I'll have ~$3,369 in savings at closing if I take the higher rate of 4.625%. My monthly mortgage payments will be $33/mo higher than they would be at 4.375% over the life of the loan. You actually need to calculate the present value of your future savings to compare to the present value of your closing savings, after taking into account that the money could be invested, so at 3% hypothetical inflation and 4% real ROI you would need to remain for a bit over 11 years.
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May 13, 2014 00:51
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a shameful boehner posted:It'll be off 104th, a few blocks to I-25. Ah cool, good luck with closing it all down. I am at 80th and Wadsworth. spwrozek fucked around with this message at 01:59 on May 13, 2014 |
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May 13, 2014 00:51
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/\/\ - Thanks man, looking forward to the next big step in this process.  baquerd posted:You actually need to calculate the present value of your future savings to compare to the present value of your closing savings, after taking into account that the money could be invested, so at 3% hypothetical inflation and 4% real ROI you would need to remain for a bit over 11 years. To me it seems like a no brainer to take the higher interest rate then, since it's quite likely we'll move on before that period of time has elapsed. Plus, even if we don't, we could probably refinance the mortgage down the road for a lower payment if we needed to.
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May 13, 2014 00:56
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baquerd posted:You actually need to calculate the present value of your future savings to compare to the present value of your closing savings, after taking into account that the money could be invested, so at 3% hypothetical inflation and 4% real ROI you would need to remain for a bit over 11 years. Yeah, you can't compute the break-even point just from the difference in monthly payments. In addition to return on savings you also have to consider the difference in taxes. Overall it sounds like it's not worth paying for the lower rate in this case.
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May 13, 2014 01:20
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a shameful boehner posted:I finally found a home in the Denver area for a reasonable price and was able to submit an offer as soon as it hit MLS. I'm pretty excited. Congrats! For my housing search, nothing really worth looking at has come up in over 2 weeks now. It's not like I'm being super picky at what I look at either, there just isn't much hitting the market.
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May 13, 2014 02:07
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Pardon if this has been asked before, but has anyone gone with new construction and have any advice/tips/regrets? My wife and I have been looking for a while now with the goal of buying end of this year-early next year, and we've stumbled upon a new neighborhood where a new home is not only the right price, but also in a good location. There are some great closing cost incentives in addition to whatever other promotions they have going on at the time. The home is Centex. Just wondering if anyone had gone this route.
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May 13, 2014 13:28
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I bought a new Centex home about 4 years ago. What do you want to know? edit: Now that I'm in front of a computer I can add quite a bit to this. Here's a quick list of pro/cons and other general advice. Pro's of new construction:
Cons
I could go on and on really, but overall I'm happy with my house, and I'm happy with the location it's in. In hindsight though I much rather have rented a house in my current neighborhood for less than 100 extra dollars a month than my current mortgage payment. We have a young family and don't live close to our relatives, so right now the option to move is off the table unless I bring about 10K to the table when I go to sell the place. Fun fact about 30 year mortgages, I've made about 52 payments on my house at an appx cost of 67,600 dollars (1300/mo). Of that money spent I've reduced my actual mortgage balance appx 10,000 dollars. The other 57,600 dollars went to interest, taxes, and insurance premiums. If I do sell my supposed 10,000 in 'equity' will be instantly demolished by realtor fees. If I could break even on the transaction I would sell my house tomorrow. Who wants to talk about throwing money away? Don't get me wrong, I love living in a house, I just don't think I love owning a house. Another tip, if you do buy a house you're going to get bombarded with tons of service offerings and extended warranties. I added up the cost of all the extended warranties and service plans they wanted to sell us and it added up to over 1300 dollars. This was for the Stove, Microwave, Fridge, Washer, Dryer, Water Heater, A/C unit and the TV we purchased. I chose at that point to 'self insure'. I basically bet that in 3 years I wouldn't spend 1300 dollars fixing whatever broke instead of spending 1300 on extended warranties. I've come out far ahead. In a little over 4 years the only thing I've had to do was have the A/C unit looked at once for a cost of around 300 dollars. The service guys come out of the woodwork as well. Alarm companies, Pest control, Lawncare, you name it, they pay to get a list of new homeowners. They'll be knocking on the door and mailing you crap every week for the first few months. skipdogg fucked around with this message at 16:35 on May 13, 2014 |
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May 13, 2014 14:18
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So far my free Zillow ad has brought in two lookie loos. You suckers using fancy Realtors are throwing away more money then renters!
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May 13, 2014 15:11
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So the inspection found a roof less than 5 years old, a water heater manufactured and installed in the last year, a furnace manufactured and installed in the last year, insulated windows, no cracks in the foundation all the way down to the crawlspace, a half block to a lake, a half block to shopping, and was built in 1961. Hardwood floors throughout, all appliances included. Saw all this and confirmed with an inspector with my own eyes, including crawling through the crawlspace. Holy poo poo, I feel like I hit the house lottery. Either that, or it's built on a pet cemetery or something. There are some trees close to the house, so still gotta get a sewer scope, but still pretty amazed. Apparently the biggest potential issue is that there are some pipes of differing material joined together in the plumb which can cause electrolysis between the metals and corrode the pipes. I'm not sure whether or not that's a big enough issue to warrant including in the objection (since there aren't issues now), otherwise, the house is pristine. \/\/ There are a few locations where GFIs aren't installed and the installation in the attic is old but not asbestos. Didn't do a radon test since it's a tri-level built on a hill with no basement or downstairs bedrooms and a walk-out basement in the den. Load tested at 100 amps and according to the inspector that's enough to power the house. ex post facho fucked around with this message at 05:57 on May 14, 2014 |
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May 14, 2014 05:41
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2 things to consider or remember is that the house could have asbestos insulation, especially in the attic, and the house wiring could be under powered for today's loads. Also did they have GFIs installed in all the wet locations (my house from '78 had no GFI and the wiring is funky as hell)? Does sound like you have some good bones though!
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May 14, 2014 05:51
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a shameful boehner posted:So the inspection found a roof less than 5 years old, a water heater manufactured and installed in the last year, a furnace manufactured and installed in the last year, insulated windows, no cracks in the foundation all the way down to the crawlspace, a half block to a lake, a half block to shopping, and was built in 1961. Hardwood floors throughout, all appliances included. Saw all this and confirmed with an inspector with my own eyes, including crawling through the crawlspace. My inspection came in unbelievably clean too, and then the day after closing, I discovered water damage and subsequently mold. Happy closing!
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May 14, 2014 07:26
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http://www.bloomberg.com/news/2014-05-13/fannie-freddie-overseer-easing-loan-buybacks-mortgages.html So glad that we've learned from our mistakes. Predicting house prices to rise sharply for 5 years and then crash terribly.
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May 14, 2014 10:38
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I defaulted on a smallish student loan (<$10k) a few years back. Long story short, I am now gainfully employed (>$50k/yr) and was able to pay off the loan in full pretty quickly. Now, come to find out that was probably a mistake. I had never heard of student loan rehabilitation and now I guess there's no way to get that default off my credit report. Is there any hope of me getting a mortgage (I'm a veteran as well) or should I tell my lady that we have to wait like 4 more years for our hopes and dreams to come to fruition?
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May 14, 2014 14:13
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Bloody Queef posted:http://www.bloomberg.com/news/2014-05-13/fannie-freddie-overseer-easing-loan-buybacks-mortgages.html The best part is when the guy complains that the scrutiny given to their bad past loans, has continued to be applied to current and new loans. If they couldn't be trusted then, there is no reason to trust them now. Golluk fucked around with this message at 15:42 on May 14, 2014 |
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May 14, 2014 14:32
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A dude on my facebook who sells houses just posted a video of a home showing for a 3 story home. It's currently uninhabited, the owners have moved already. When he walks in with the client, their feet splash in the standing water on the floor. A pipe had burst in the top floor's bathroom, and all three floors are soaked.
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May 14, 2014 15:31
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All floors freshly washed down?
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May 14, 2014 15:43
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How do I know what's worth haggling over following the inspection? I know the real answer is "whatever you don't want to fix yourself" - and I'm okay with doing some basic home repairs - but ultimately I don't want to risk the seller walking away because the next buyer won't quibble. For example, there are some door catch springs missing from the front and rear doors. Not a major replacement. An outdoor garden faucet is missing the valve head (still works fine though with little spigot controls on the end). Not a major replacement. The gutters have debris that needs clearing and drains needing to be flushed, and some very small branches (<4" diameter) from a nearby tree that could rub on the roof shingles. Probably stuff that could be done in a weekend. However, the one potentially big issue that was noted were the connections between copper and galvanized plumbing which can cause corrosion, especially given the high mineral content in the water here in Colorado. According to my inspector that's probably worth consulting with a licensed plumber about how to install "Dial Electric" pipe separators, but I honestly don't know the first thing about what that would entail, cost of hiring a plumber to fix, etc. I feel lucky given the relatively pristine state of the rest of the home, but that one worries me a bit. ex post facho fucked around with this message at 16:49 on May 14, 2014 |
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May 14, 2014 16:44
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A lot depends on the market. If this house or similar houses have been on the market for a while, then you can afford to play hardball, but if houses tend to sell quickly in this particular neighborhood I'd only bring up stuff if I'm 100% okay with walking away over.
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May 14, 2014 17:21
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identity49 posted:I defaulted on a smallish student loan (<$10k) a few years back. Long story short, I am now gainfully employed (>$50k/yr) and was able to pay off the loan in full pretty quickly. Now, come to find out that was probably a mistake. I had never heard of student loan rehabilitation and now I guess there's no way to get that default off my credit report. I've found that this will really depend on the underwriter. Talk to a loan officer and see what your options are. I've heard of pay for delete arrangement, but I think you're SOL if you've already paid the defaulted loan in full - somebody correct me if I'm wrong.
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May 14, 2014 17:32
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First major housing dilemma. So we're buying a place in South East London and we had our offer accepted about 4-5 weeks ago. It's a top floor 2-bed maisonette (we're top floor with ground floor being rented out by freeholder). We had a valuation done and the surveyor came back and said the roof needs a complete overhaul. We've told this to the vendor and said we'd want this done by him before considering buying it. He's come back and agreed on fixing the roof. The issue comes up where the real estate agent has told us that the vendor won't spend the money on the roof unless we're committed to buy (ie. the roof repair is put in the contract). His stance obviously is that he doesn't want to spend the money without some commitment from us. While I could understand his point, if we were to say not interested and he re-listed it, the same issue would come up with the next potential buyer's survey. I spoke to our solicitor and he was weary stating that we could get screwed over by the vendor whereby we complete and he never holds his end of the deal (the cost of taking them to court could be higher than actual costs). One other option our solicitor mentioned was entering in the contract that completion won't be done until the roof has been fixed and independently reviewed to be adequate. I figured we could also enter a clause stating that any shortfalls in the quality of the roof would be withheld from the purchase price of the property. Still though, the solicitor said it's still not optimal because you're introducing a grey area in the contract (what would be considered an adequate level of quality?) Now normally I'd walk but given the price we're buying it for and the current prices of the property around (if you can even find any inventory), we're getting a good price on it. Anyone have any experiences adding clauses like this to the contract?
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May 14, 2014 17:39
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a shameful boehner posted:How do I know what's worth haggling over following the inspection? I know the real answer is "whatever you don't want to fix yourself" - and I'm okay with doing some basic home repairs - but ultimately I don't want to risk the seller walking away because the next buyer won't quibble. Check the terms of your contract to be sure, but there's probably nothing to lose by claiming defects, regardless whether they end up agreeing to anything. Either they agree to a fix or credit, or they ignore you. In the event of the latter, you can rescind your claim and move on with closing. The contract probably doesn't let the seller just walk because you asked for inspection concessions, unless your realtor sucks at writing a contract. As for the specific plumbing issue, see if there are any plumbers who can give you a free quote. Having hard numbers to claim is a good place to start.
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May 14, 2014 17:42
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I'm not familiar with the house hunting and closing process in other countries, but as far as I'm aware, you would be within contract to walk away after repairs are done if they are found to be unsatisfactory.
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May 14, 2014 17:44
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Filthee Fingas posted:First major housing dilemma. In my opinion, you want the job done right, and the definition of right is going to differ between both parties. There is no incentive for the seller to do anything but the worst possible roof job to still conform to having "fixed the roof." Adding, in writing, what constitutes "fixing the roof" to the contract is going to be a huge headache. I would look into whether you can have them pay you cash at closing to fix the roof, after which you use it to get the roof done. Then the hard part is going to be negotiating the cash amount. They'll get some quotes, you get some quotes, you compare and find out their quotes are 1/3rd your quotes, and you negotiate from there. As I'm sure you're aware, getting cash at closing is much different than lowering the house price, if you're financing. It costs the seller nominally the same amount, but in one situation you are out a lot more out-of-pocket.
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May 14, 2014 17:51
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