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My wife inherited a little old house last year in a town we weren't even living in, which we quickly sold. Does this disqualify us from being first-time home buyers? Hoping not since we've never had a mortgage before and have never actually bought a house.
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Aug 11, 2015 00:23
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What kind of benefits do you think being a first time home buyer gets you? The free money is gone sadly.
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Aug 11, 2015 00:48
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Good point, I guess I assumed there was some kind of FHA loan with lower interest, but was probably just thinking of that tax credit. -e Oh yeah, I was looking at early withdrawals from Roth IRAs earlier. Just getting a little antsy with interest rates maybe going to rise (though the last I heard is maybe not til early 2016), trying to resist the urge to feel rushed. I just keep alternating chants between historically low rates and do never buy sadus fucked around with this message at 01:39 on Aug 11, 2015 |
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Aug 11, 2015 01:34
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Keep in mind everyone else is borrowing cheap too so the market has reacted to it. You may find home prices dipping a bit when rates rise (or maybe not, who knows)
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Aug 11, 2015 04:05
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Nobody actually knows when rates will rise or by how much. People have been yammering about how the rates are going to go up soon since 2010. They're bound to go up eventually, but don't let that dominate your decision-making: prices will probably react to rising rates by either going down, or not rising as much as they would have.
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Aug 11, 2015 06:26
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sadus posted:Good point, I guess I assumed there was some kind of FHA loan with lower interest, but was probably just thinking of that tax credit. IRA withdrawals are a bad deal no matter how you slice them anyway. 401k loans are better since you can at least pay that back, but you probably still shouldn't do that, either
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Aug 11, 2015 07:11
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Andy Dufresne posted:Keep in mind everyone else is borrowing cheap too so the market has reacted to it. You may find home prices dipping a bit when rates rise (or maybe not, who knows) It'll have to dip or at least freeze, because so many people buy based on the monthly payment (ergo all the 'buy now, interest rates mean you can get more house!!' crap), not the house value; rates going up means that prices can't climb unless people are making more money (haahha)
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Aug 11, 2015 15:15
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QuarkJets posted:IRA withdrawals are a bad deal no matter how you slice them anyway. 401k loans are better since you can at least pay that back, but you probably still shouldn't do that, either The only time you should do that is if you somehow retroactively know that the market drops during your payback period, so the amount you're paying back in is greater than what it would have dropped to. But since you can't do that...
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Aug 11, 2015 16:30
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Everything I can do is done. All bank and financial paperwork is to the lender, insurance is purchased, now we play the waiting game. We aren't scheduled to close until the 31st...this is going to be a long-rear end, boring-as-gently caress game.
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Aug 11, 2015 16:38
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Don't worry. Without fail your lender won't get the closing packet started until the 30th.
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Aug 11, 2015 18:15
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No Butt Stuff posted:The only time you should do that is if you somehow retroactively know that the market drops during your payback period, so the amount you're paying back in is greater than what it would have dropped to. Or, if you don't have enough for a 20% down payment and the monthly PMI would be greater than your average monthly return on the amount that you borrowed. If you're borrowing $10k out of your 401k that was making roughly 5% APY, it's worth borrowing that money if you're looking at a PMI payment that's greater than $42/month 401k loans are also useful if you have some sort of really high interest loan that you can pay off with lower-APY 401k money. As an extreme example, if you're getting charged 20% on some hosed up personal loan and you have the option of borrowing $10k out of your 401k to eliminate that, then I'd say that's a great deal and you should jump on it.
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Aug 11, 2015 19:18
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401Ks can be used as a qualifying cash reserve though which is good if you are buying before selling your current home since they don't consider equity in that home as an asset.
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Aug 11, 2015 19:22
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Has anyone here taken out a home equity loan? The market here is so crazy I'm considering buying a house with cash and then "refinancing" back to a mortgage afterwards, just to make my offer more attractive to the seller. I've only read a few things about it but wanted to know if this was even a feasible idea.
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Aug 11, 2015 19:34
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My mom owns her first house outright so while she waits for it to sell, she borrowed against it to pay cash for her new house. I'm not sure if it's an "equity" line of credit or a mortgage against the first house or what the exact mechanism she used was.
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Aug 11, 2015 19:43
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QuarkJets posted:401k loans are also useful if you have some sort of really high interest loan that you can pay off with lower-APY 401k money. As an extreme example, if you're getting charged 20% on some hosed up personal loan and you have the option of borrowing $10k out of your 401k to eliminate that, then I'd say that's a great deal and you should jump on it. One of the big problems with 401k loans is that if you're ever fired or quit, they immediately become due. And if you have a big outstanding 401k loan, and your company knows that, they might use it against you when it comes to raises, bonuses, etc. ("what's Mike gonna do? quit?  " )I have a high-interest personal loan due to selling a very underwater home, but I wouldn't for a second consider using a 401k loan for that reason.
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Aug 11, 2015 20:19
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moana posted:Has anyone here taken out a home equity loan? The market here is so crazy I'm considering buying a house with cash and then "refinancing" back to a mortgage afterwards, just to make my offer more attractive to the seller. I've only read a few things about it but wanted to know if this was even a feasible idea. A lot of lenders will waive the cash out interest rate penalty when paired with a cash purchase even on conventional mortgages. Most banks will do LOC with less hassle though but your terms will be more limited. A LOC is usually much easier to close then a mortgage though and you just do it at the bank branch. I think they like to loan 75% of appraised value or less.
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Aug 11, 2015 21:59
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To piggy back on this, if you do want to go the mortgage route instead of the LOC, typically as long as you can document the purchase without a lien, you can borrow up to 80% of the purchase price on a conventional mortgage. You can go higher if you have some improvements documented. The guidelines for delayed financing aren't that complicated so as long as you ask for it upfront, you shouldn't have much trouble getting answers. YMMV on the LOC vs mortgage after a cash purchase.
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Aug 12, 2015 00:15
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Yeah, from what I've read a LOC will generally be much lower and have shittier interest rates, good to know they're easier to close though just in case.
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Aug 12, 2015 00:37
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If I've locked in my rate with a lender, am I committed to using them? I sent out an email bomb on Zillow and got back better offers than the best from my current company. (3.25% at 1% origination + 1 points vs. 3.25% at .87 point)
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Aug 12, 2015 01:19
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Okay, who's done a 203(k) and what should I know about them?
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Aug 12, 2015 03:49
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Harmburger posted:If I've locked in my rate with a lender, am I committed to using them? I sent out an email bomb on Zillow and got back better offers than the best from my current company. (3.25% at 1% origination + 1 points vs. 3.25% at .87 point) You aren't committed, no.
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Aug 12, 2015 04:31
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moana posted:Has anyone here taken out a home equity loan? The market here is so crazy I'm considering buying a house with cash and then "refinancing" back to a mortgage afterwards, just to make my offer more attractive to the seller. I've only read a few things about it but wanted to know if this was even a feasible idea. Did this and used the heloc to do a remodel - first loan ive gotten so nothing to compare it to but it was easy. Took a week, notary came to my house. Had to show appraisal records and bank account info mostly if I recall.
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Aug 12, 2015 08:07
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Nail Rat posted:One of the big problems with 401k loans is that if you're ever fired or quit, they immediately become due. And if you have a big outstanding 401k loan, and your company knows that, they might use it against you when it comes to raises, bonuses, etc. ("what's Mike gonna do? quit? Yes, that is a potential issue. But since the 401k loan amount is never huge anyway (usually it can't be less than 50% of the principal, iirc?), I'd rather have a $10k loan from 401k than a $10k personal loan at huge interest.
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Aug 12, 2015 09:04
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QuarkJets posted:Yes, that is a potential issue. But since the 401k loan amount is never huge anyway (usually it can't be less than 50% of the principal, iirc?), I'd rather have a $10k loan from 401k than a $10k personal loan at huge interest. Yeah, if your credit isn't poo poo and you don't max out every available line of credit, you can take out a personal loan to pay back your 401k in the worst case and be no worse off than you would be sitting with the personal loan, except for paying less interest over the time period where you had the 401k loan instead of the personal loan.
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Aug 12, 2015 13:49
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Dwight Eisenhower posted:Yeah, if your credit isn't poo poo and you don't max out every available line of credit, you can take out a personal loan to pay back your 401k in the worst case and be no worse off than you would be sitting with the personal loan, except for paying less interest over the time period where you had the 401k loan instead of the personal loan. That doesn't address the employer using knowledge of the loan against you (as evidence they have leverage over you), though. And they totally would. quote:But since the 401k loan amount is never huge anyway (usually it can't be less than 50% of the principal, iirc?) This really depends on how big your 401k is, doesn't it? If you had 300k in your 401k, you could take out a 150k loan. Nail Rat fucked around with this message at 15:52 on Aug 12, 2015 |
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Aug 12, 2015 14:25
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Nail Rat posted:That doesn't address the employer using knowledge of the loan against you (as evidence they have leverage over you), though. And they totally would. It's a horrible idea, but you can always cash it out when leaving a job I believe, it counts as income but you can settle up the balance owed on the loan out of that. At least it's an option if anyone is ever specifically threatened like that.
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Aug 12, 2015 16:27
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sadus posted:It's a horrible idea, but you can always cash it out when leaving a job I believe, it counts as income but you can settle up the balance owed on the loan out of that. At least it's an option if anyone is ever specifically threatened like that. I'm more just referring to the passive advantage they get when it comes time to salary reviews, etc. If an employer thinks you need the money badly, they're likely to give you less. Offering them visibility to the fact you have a large loan out works against you professionally. Case in point, a colleague who had a large (10k+) 401k loan out to cover a custody battle got a 1k raise, which may not have even been 1%. By comparison, in six years I've never gotten less than a 4% raise at this company. The cumulative effects of being screwed out of $3k a year could very well over time have more of an effect than extra APR on a personal loan. Of course, he did leave shortly afterwards, but we both think that perceived immobility/lack of leverage on his part was used against him in salary decisions. Nail Rat fucked around with this message at 16:37 on Aug 12, 2015 |
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Aug 12, 2015 16:33
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You work for a horrible lovely company and/or people. If some employer ever tried to use personal information like that against me in a salary negotiation I'd walk instantly. Holy poo poo that's awful. I realize I have the luxury of working in an industry and location where it wouldn't be that hard to get another job, so maybe it's not always that easy. But I refuse to believe that "most" employers would do such a tremendously lovely thing with an employee they valued at all.
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Aug 12, 2015 19:28
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Nail Rat posted:That doesn't address the employer using knowledge of the loan against you (as evidence they have leverage over you), though. And they totally would. Yeah it does; if you can just pay it off at any time with a personal loan then your employer doesn't actually have any leverage from knowing about the 401k loan. It's also extremely unlikely that your manager would even have access to this kind of financial information.
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Aug 12, 2015 19:28
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Leperflesh posted:You work for a horrible lovely company and/or people. If some employer ever tried to use personal information like that against me in a salary negotiation I'd walk instantly. Holy poo poo that's awful. Just to see whether I'm getting this right, the proposed chain of events is: 1) Employee tells a bunch of people about his 401k loan for some reason, so that his manager hears about it 2) Employee finds out that his raise is going to be less than 1% 3) Employee accepts raise without question 4) Employee later speculates with colleagues that his 401k loan was the cause of his small raise It's really unlikely that his employer actually used personal financial information against that other employee when determining raises. I see a lot of raw speculation over what amounts to an extremely small loan amount that he could have easily repaid with a higher interest personal loan.
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Aug 12, 2015 19:39
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Leperflesh posted:You work for a horrible lovely company and/or people. If some employer ever tried to use personal information like that against me in a salary negotiation I'd walk instantly. Holy poo poo that's awful. Yeah that scenario is basically a scene from Horrible Bosses. The real world does not work like that at all.
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Aug 12, 2015 21:48
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Well, I personally feel the rest of you are not jaded enough about employers. Employers are in general horrible people because it all comes down to them wanting to make the most money by spending the least money. The COO makes all salary decisions in our company, and every dollar he gives out is a (small) amount off of his own year-end bonus. I believe in that context, he would use any and all information he has available. 
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Aug 12, 2015 21:49
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Everyone saying that bosses aren't actually that horrible are amusingly naive. That being said, any COO who tried to use a 401k loan as leverage during salary negotiations is seriously overplaying his or her hand because the consequence of someone walking is they have to secure a higher interest personal loan for the same amount to pay off the 401k loan. Is your COO otherwise grossly professionally incompetent Nail Rat? Be sure to post your opinions on a google indexed public forum, tia.  (Maybe your coworker was just lovely at negotiating and the COO picked up on that and didn't give him good raises.)
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Aug 12, 2015 22:34
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Nail Rat posted:Well, I personally feel the rest of you are not jaded enough about employers. Employers are in general horrible people because it all comes down to them wanting to make the most money by spending the least money. The COO makes all salary decisions in our company, and every dollar he gives out is a (small) amount off of his own year-end bonus. I believe in that context, he would use any and all information he has available. It's not a matter of whether or not the employer is a shitheel. Seriously, did you actually read anything that I posted? I know that you really want the 401k loan to be the reason that your friend got dicked over in salary negotiations, but it simply doesn't make any sense. In the very worst case scenario, your friend could have just taken a 401k withdrawal to pay off the loan and eaten a small penalty. It's really just not important enough to have any influence. e: You may as well be blaming your friend's preference for chocolate ice cream as a contributing factor in the raise negotiation. QuarkJets fucked around with this message at 04:51 on Aug 13, 2015 |
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Aug 13, 2015 04:45
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Nail Rat posted:Well, I personally feel the rest of you are not jaded enough about employers. Employers are in general horrible people because it all comes down to them wanting to make the most money by spending the least money. The COO makes all salary decisions in our company, and every dollar he gives out is a (small) amount off of his own year-end bonus. I believe in that context, he would use any and all information he has available. Why buy a house then? Your employer knows you have a house so can't move easily and have a huge debt.
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Aug 13, 2015 12:06
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Just n=1, but my 401k loan is not immediately due if I leave the company and I don't feel bad at all about using it for a home down payment. If I had saved the money separately (not in 401k) for the down payment and then decided to not buy a house I would have lost that tax advantaged space.
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Aug 13, 2015 20:20
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Christ. First realtors are all horrible people, and now "bosses" are all horrible people too. This is BFC, we should really try to stick to giving factual, helpful, even-headed advice without ahahahah I can't even finish this sentence, this really is too much to expect, isn't it.
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Aug 14, 2015 06:38
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Leperflesh posted:Christ. First realtors are all horrible people, and now "bosses" are all horrible people too. There's a difference between being an actual horrible person, and being someone who you should trust only as far as you can throw them. Most people really suck at understanding and negotiating fair compensation for the value they provide to a company, even more so than they suck at getting a fair deal in real estate.
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Aug 14, 2015 09:09
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Finally got the survey back on the property we're buying, and there were issues with the wood framed double glazing meaning they need to be replaced, it's about £2-3k worth of work and I was going to do what appears to be the standard thing of asking the seller to front some of the cost, but I don't know really how to go about the negotiations. He could very well just say "no" and I'd have to go "well all right then" because I'd rather not let this house go. I'm also not sure how the process goes if he does agree- I presumably have to contact my mortgage lender again and say that the mortgage has been reduced- does that then mean an additional waiting period while they adjust things, then even more time spent having contracts drawn up again? I'm just trying to get my head around the various factors in play to weigh up what it's worth doing.
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Aug 14, 2015 10:07
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Changing your mortgage amount is not a problem. The seller can very well tell you no, but they could say yes on the concession. I don't think they can cancel the contract if you ask for a concession.
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Aug 14, 2015 16:23
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