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Yeah, it seems like the PMI piece isn't that hard to figure out (actually, I didn't know there was a chance I'd be able to avoid it). What's harder for me to get a handle on is costs outside of the mortgage/tax/PMI side of things.
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Oct 9, 2016 13:51
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Elem7 posted:So that begs the question, what's the cost difference between a typical forced air system and radiant flooring for an entire 2500 square foot house? Very very dependent on the house and what kind of radiant you want. Hydronic is the most popular/cost effective long term. If you have a finished home with an unfinished basement it could be quite inexpensive to handle the first floor. Second floor - not so much. Now if all of this was under construction still the costs change wildly. Basically what is comes down to is you need to lay a lot of pipe to make this work, and the floor surface will dictate how well it works. Carpet....not so good. Wood floors - sure. Tile - awesome. Then you get into the part about what heats the water that goes through these pipes. It could be as simple as an electric water heater with a circulator pump (not very efficient) to something exotic like a solar water heater with a tankless gas backup. And it's relatively easy to change later as compared to the tubing install. Alereon posted:If you're building a new house I'd think it would make more sense to just put in better insulation than a fancy heating system. As with everything, this is a cost/benefit calculation. But two comments: better insulation vs. "fancy heating system" isn't mutually exclusive and radiant is hardly "fancy." For some context, here's about $60 worth of oxygen barrier PEX and zip ties that I installed on the remesh before pouring the concrete floor. Took a couple hours, was cheap and drat near impossible to do later. It runs on an $80 taco circulator pump with a craigslist-sourced $200 tankelss water heater with a home built control system (basic thermostat, 24vac transformer, 24vac to 120v contactor). Because this is not a constantly conditioned space and I live where it freezes the "loop" was filled with an antifreeze mix so it can be safely left off during freezing temperatures.  This stuff doesn't have to be hard or expensive.
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Oct 9, 2016 15:55
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So what do you do to cool that space in the summer? Can't imagine radiant floor works very well for cooling, so is it forced air for heat and cooling or radiant for heat and mini-split for cooling? The latter with 2 systems is I imagine more expensive.
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Oct 9, 2016 19:01
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RICHUNCLEPENNYBAGS posted:Is it crazy to think about buying a house if I'd only be able to put around 10% down?
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Oct 9, 2016 19:49
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Elem7 posted:So what do you do to cool that space in the summer? Can't imagine radiant floor works very well for cooling, so is it forced air for heat and cooling or radiant for heat and mini-split for cooling? The latter with 2 systems is I imagine more expensive. I have a forced air gas furnace/AC unit as well. Which is great for a space like that - radiant takes quite a while to come up to temperature while the forced air doesn't. What you don't see in the picture is the other bay as well as a separate office (on it's own radiant and forced air zone). I've used the AC in the garage portion once or maybe twice I think - screw cooling an entire garage, that's what a shop fan is for. I'm already filthy when I'm working out there, sweaty is fine as well. More expensive initially? Absolutely. Glad every time I use the radiant because it's so drat comfortable + lower energy utilization overall? Yes.
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Oct 9, 2016 20:20
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Another question: is there some way I can figure out the tax implications of buying a house/paying a mortgage? Playing around with the various rent or buy calculators suggests there might be a lot of upside here but I don't have any idea how to start figuring out how much.
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Oct 10, 2016 00:35
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RICHUNCLEPENNYBAGS posted:Another question: is there some way I can figure out the tax implications of buying a house/paying a mortgage? Playing around with the various rent or buy calculators suggests there might be a lot of upside here but I don't have any idea how to start figuring out how much. The broad strokes are: subtract mortgage interest from your taxable income.
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Oct 10, 2016 02:52
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Motronic posted:The broad strokes are: subtract mortgage interest from your taxable income. Only if you itemize.
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Oct 10, 2016 04:21
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Drunk Tomato posted:Only if you itemize. That's a great point. Most people are like "I can deduct all of that interest!" while forgetting that you have to forego your standard deduction when you itemize, so for most people there actually isn't much tax benefit. Figure out what a year of interest looks like (probably not much with today's rates), subtract the standard deduction from that, then multiply that amount by your highest marginal tax rate. That's probably how much you're saving. On a $200k house with 20% down, the interest payments don't even come close to the standard deduction, so there's no income tax benefit QuarkJets fucked around with this message at 09:10 on Oct 10, 2016 |
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Oct 10, 2016 09:08
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Motronic posted:The broad strokes are: subtract mortgage interest from your taxable income. Well... Ok, that makes sense.
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Oct 10, 2016 09:55
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QuarkJets posted:probably how much you're saving. On a $200k house with 20% down, the interest payments don't even come close to the standard deduction, so there's no income tax benefit Well, that's good to know. That's right in the price range and down payment % my wife and I are looking to buy. I keep have friends and relatives tell me "remember you'll get all these tax advantages too" when I complain that prices are too goddamn high for the deferred-maintenance money pits that seem to make up 90% of the market here. So I'm glad to know the promised tax breaks will likely be useless, the same as it was with my student loan interest. Is the child credit bullshit too? Because my wife and I have deferred having kids until we found a house. But it's taking so goddamn long to find a place worth buying were just forging ahead with that. Screw it, we'll all live in one bedroom, the kid can sleep in a drawer for a few years.
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Oct 10, 2016 13:38
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QuarkJets posted:That's a great point. Most people are like "I can deduct all of that interest!" while forgetting that you have to forego your standard deduction when you itemize, so for most people there actually isn't much tax benefit. Same here. My interest rate is so low that I haven't been able to itemize for years.
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Oct 10, 2016 13:57
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HVAC question (wrong thread for this?): My wife and I are in escrow on a newly-renovated home. The pre-renovated home was about 2000 sq ft, and they basically added a new floor when renovating so it's now 2500 sq ft. We got the home inspection report today, and the inspector noted that the heating and cooling systems (installed circa 2007) are rated for the previous living space - specifically, 80,000 BTU heating and 3 ton cooling. This is in Lansing, Michigan. My question is, how much of a problem is this going to be for us? Will we need to replace them in order to properly heat and cool the house, or is it fine as long as the house is insulated well?
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Oct 10, 2016 14:42
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LogisticEarth posted:Screw it, we'll all live in one bedroom, the kid can sleep in a drawer for a few years.
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Oct 10, 2016 16:28
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LargeHadron posted:HVAC question (wrong thread for this?): Heating and cooling is usually oversized now. The idea is to have them run flat out on the coldest or hottest day of the year and still be comfortable, but newer builds often don't reach that level of utilization. I would say don't try to replace, just expect to pay for some additional attic insulation and update your weather stripping and see how it goes. Maybe do an energy audit.
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Oct 10, 2016 16:32
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So, I have a question. We (my wife and I) are selling our house, and it's a situation where my father in law put 100k down on a house for us, which we would then pay the mortgage on. Seems great, right? Well, no, he made us sign a contract that says we start off with 1/3 share in the house (1/6 each) and he owns 2/3s. He's a laywer, and I've misunderstood a lot of the process and assumed this was a gift - it's not, he's invested and expecting to make money off it, and becomes angry and abusive at us when we expect him to help us out in any way. It's one of the reasons we want out of this deal - and also because the market is way, way up and I'm worried about it going down again and getting us stuck. Now, according to the contact, we should be getting more percentage of the house as we pay the principal (interest, property tax, and repairs contribute absolutely nothing to this, even though we've been paying that entirely ourselves to the tune of well over 100k for the last 3 years). Here's the exact text of that part: (Us) will pay to (Him) VIA PAYMENTS TO THE TRUST DEED a royalty which shall be calculated as follows: PERCENTAGE OF PURCHASE PRICE AND COSTS OFFSET BY PAYMENT OF PRINCIPLE CONTRIBUTION REVIEW AND INCREASED EVERY TWO YEARS. Upon satisfactory payment of principle the percentage of ownership by (Us) shall be increased every two years to the percentage the principle payment represents of the purchase costs: shared equally until the percentage of ownership reaches 40% for (Him), 30% for (Me), and 30% for (Wife). He says he's willing to do an increase right now in our percentage even though it says it's only every 2 years. Here are the numbers below - according to this contract, what should our percentage be going to? Our current %: 33.33 His current %: 66.66 His down payment: 100k Starting mortgage amount: 385k (house was bought for 485k in Jan 2014) Amount of principle we have paid since the house was bought: 17,913 Current mortgage amount: 370,087 Our modified %: ? His modified %: ? I'll also be contacting a lawyer to review this. I'm not too worried about him backing out of the deal, as he's agreed to sell (and he needs the money right now because he's a compulsive house and car buyer). But I want to be sure I know what I'm talking about. As a side note, Zillow says the house is currently worth 655k (!!!). You can see why we want to sell, and he'll be making a tidy profit on top of his initial 100k investment for sure. Rotten Red Rod fucked around with this message at 16:39 on Oct 10, 2016 |
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Oct 10, 2016 16:34
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LargeHadron posted:HVAC question (wrong thread for this?): Too many variables to give any kind of advice. If I was really worried about it, I would find a really really good HVAC contractor (family owned, in business for 20+ years) and find the old crotchety dude that works there and pay them to do a fully Manual J load calculation on the house and maybe a manual D. Sizing/Capacity is just one small piece of a much larger puzzle. I could be wrong, but I bet not a lot of thought went into expanding the HVAC system and you may run into some comfort issues. Whether those issues are major or not, and worth correcting, only time will tell.
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Oct 10, 2016 16:45
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QuarkJets posted:That's a great point. Most people are like "I can deduct all of that interest!" while forgetting that you have to forego your standard deduction when you itemize, so for most people there actually isn't much tax benefit. This doesn't account for the fact that someone taking the standard deduction now may still have the ability to deduct other things, but doesn't/shouldn't because they don't exceed the standard deduction. So really, where you say "subtract the standard deduction from that", you should be saying "subtract the standard deduction, less any other deductions you're eligible for". For example, if you have state income tax. For me, personally, looking at buying a house, I'll get the full benefit of the interest tax deduction because my state tax is higher than the standard deduction, so I'm already itemizing.
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Oct 10, 2016 17:05
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Rotten Red Rod posted:I'll also be contacting a lawyer to review this. I'm not too worried about him backing out of the deal, as he's agreed to sell (and he needs the money right now because he's a compulsive house and car buyer). But I want to be sure I know what I'm talking about. You definitly need your own lawyer because this whole situation is hosed up. He puts up about 20% of the cost of a house and somehow he's entitled to 66% of the value? Something tells me that your lawyer will tell you to pay him his 100K back and that he can go pound sand after that. Was your bank aware of this situation with your down payment when you got this mortgage? I remember signing documents stating that our down payment was not any kind of loan or money that anyone would want back from us. If you signed similar papers and then have this, with your father in law's name and signature on it, it's proof that he helped you commit fraud.
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Oct 10, 2016 17:06
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Rotten Red Rod posted:So, I have a question. We (my wife and I) are selling our house, and it's a situation where my father in law put 100k down on a house for us, which we would then pay the mortgage on. Seems great, right? Well, no, he made us sign a contract that says we start off with 1/3 share in the house (1/6 each) and he owns 2/3s. He's a laywer, and I've misunderstood a lot of the process and assumed this was a gift - it's not, he's invested and expecting to make money off it, and becomes angry and abusive at us when we expect him to help us out in any way. It's one of the reasons we want out of this deal - and also because the market is way, way up and I'm worried about it going down again and getting us stuck. The way I calculated it you own around 35% of the house now. You've paid off 17.9k/385k (4.6%) from the principle, and when it's fully paid off you'll gain 70%-33% = 37% of the house. So today you have 33% + 4.6% of 37%, which is around 35% total.
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Oct 10, 2016 17:06
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skipdogg posted:Too many variables to give any kind of advice. Thanks. I realize I was a little vague. The HVAC was upgraded in 2007, but the house wasn't remodeled until ~2015, so the HVAC was never actually expanded to fit the new living space. I'm not *that* worried about comfort issues, as I'm used to living in un-cooled top-floor apartments that get to 86 degrees (and humid!) in the summer.
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Oct 10, 2016 17:20
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Rotten Red Rod posted:So, I have a question. We (my wife and I) are selling our house, and it's a situation where my father in law put 100k down on a house for us, which we would then pay the mortgage on. Seems great, right? Well, no, he made us sign a contract that says we start off with 1/3 share in the house (1/6 each) and he owns 2/3s. He's a laywer, and I've misunderstood a lot of the process and assumed this was a gift - it's not, he's invested and expecting to make money off it, and becomes angry and abusive at us when we expect him to help us out in any way. It's one of the reasons we want out of this deal - and also because the market is way, way up and I'm worried about it going down again and getting us stuck. Holy poo poo you got hosed over big time. Hopefully his share is calculated after paying off the bank. But even then if you sell for $655k you will get $615k after realtor fees, and then the bank will take $370k. So that leaves him with $154k and you with $91k. You would've been better off doing 3% down and paying PMI. Hashtag Banterzone fucked around with this message at 17:38 on Oct 10, 2016 |
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Oct 10, 2016 17:31
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Hashtag Banterzone posted:Holy poo poo you got hosed over big time. Is his share calculated before paying off the bank or after? By my reading it is worse than that; he'll get a good bit more than 40%
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Oct 10, 2016 17:36
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Economic Sinkhole posted:You definitly need your own lawyer because this whole situation is hosed up. He puts up about 20% of the cost of a house and somehow he's entitled to 66% of the value? Something tells me that your lawyer will tell you to pay him his 100K back and that he can go pound sand after that. Was your bank aware of this situation with your down payment when you got this mortgage? I remember signing documents stating that our down payment was not any kind of loan or money that anyone would want back from us. If you signed similar papers and then have this, with your father in law's name and signature on it, it's proof that he helped you commit fraud. Yeah if the bank doesn't know then y'all just committed fraud and you really need a lawyer. On the other hand you own about 37 percent of the house so the 200k appreciation will translate into about 50ish thousand dollars of profit after commission, for no money down, that worked out. Also don't do poo poo like that ever again, it was dumb.
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Oct 10, 2016 17:36
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RICHUNCLEPENNYBAGS posted:Another question: is there some way I can figure out the tax implications of buying a house/paying a mortgage? Playing around with the various rent or buy calculators suggests there might be a lot of upside here but I don't have any idea how to start figuring out how much. You got a bunch of confusing answers so I thought I would try. Federal taxable income is broken up into 3 broad categories: income, adjustments, and deductions. Income is obvious, adjustments are essentially "super deductions" because they work with a standard deduction, and then there is the deduction part. Any taxpayer can take either a standard deduction (6300 single/12600 married) or add up all the deductions they qualify for, whichever is greater. For the vast majority of taxpayers, all the deductions they qualify for are essentially: Charity + State income OR sales tax + Property tax + Mortgage interest So if you are single, pay about $5,000 in state income tax, no charity, and are looking to buy a house with 3k in property tax and 300k mortgage @ 3%, you would do this: ($9000 interest + $3000 property tax) - ($1300 gap that exists between the standard deduction and current deductible items) = $10700 extra tax deductions. If your taxable income is well into the 25% bracket, then you would save $2675 per year in federal income tax. If you have the same exact stats but you are married, then it becomes ($9000 + $3000 - $7600) = $4400, so you would only save $1100 in federal income tax.
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Oct 10, 2016 18:10
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Rotten Red Rod posted:So, I have a question. We (my wife and I) are selling our house, and it's a situation where my father in law put 100k down on a house for us, which we would then pay the mortgage on. Seems great, right? Well, no, he made us sign a contract that says we start off with 1/3 share in the house (1/6 each) and he owns 2/3s. He's a laywer, and I've misunderstood a lot of the process and assumed this was a gift - it's not, he's invested and expecting to make money off it, and becomes angry and abusive at us when we expect him to help us out in any way. It's one of the reasons we want out of this deal - and also because the market is way, way up and I'm worried about it going down again and getting us stuck. Jesus never do business with this man again. He is toxic and using his Esquire title to bully you. Demand an amortization table out of him. If you ever do decide to do business with him again, hire your own attorney paid for by you and representing your interests. You should hire an attorney to deal with closing out this contract to guarantee he doesn't still have an interest in your finances.
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Oct 10, 2016 19:16
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Economic Sinkhole posted:You definitly need your own lawyer because this whole situation is hosed up. He puts up about 20% of the cost of a house and somehow he's entitled to 66% of the value? Something tells me that your lawyer will tell you to pay him his 100K back and that he can go pound sand after that. Was your bank aware of this situation with your down payment when you got this mortgage? I remember signing documents stating that our down payment was not any kind of loan or money that anyone would want back from us. If you signed similar papers and then have this, with your father in law's name and signature on it, it's proof that he helped you commit fraud. It is hosed up and I agree. I just want out though, and we have the opportunity to do so with ~90k+ because of the market currently, and we're going to use that to move out of state and start over, and never talk to him again. There's no way we can pay him his 100k back right now, this house has continually sucked our income to the point where we're practically living paycheck to paycheck, even with renters. He made this same deal with her older sister, by the way. She's currently unable to pay the mortgage and is completely stuck - when a tree fell on her house he took the insurance money and used it on bad investments instead of fixing it. We're lucky that we have an opportunity to get out. Hashtag Banterzone posted:Holy poo poo you got hosed over big time. Hopefully his share is calculated after paying off the bank. But even then if you sell for $655k you will get $615k after realtor fees, and then the bank will take $370k. So that leaves him with $154k and you with $91k. You would've been better off doing 3% down and paying PMI. in_cahoots posted:The way I calculated it you own around 35% of the house now. You've paid off 17.9k/385k (4.6%) from the principle, and when it's fully paid off you'll gain 70%-33% = 37% of the house. So today you have 33% + 4.6% of 37%, which is around 35% total. Thank to both of you, that's about what I expected. You can see why we want out of this. H110Hawk posted:Jesus never do business with this man again. He is toxic and using his Esquire title to bully you. Demand an amortization table out of him. If you ever do decide to do business with him again, hire your own attorney paid for by you and representing your interests. You should hire an attorney to deal with closing out this contract to guarantee he doesn't still have an interest in your finances. Agreed, and thank you. We plan to cut him out of our lives entirely after this. Rotten Red Rod fucked around with this message at 19:31 on Oct 10, 2016 |
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Oct 10, 2016 19:29
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If nothing else my time on the something awful dot com forums has made me more appreciative of the normal, healthy relationship that I have with my parents and in-laws who have never once tried to scam me out of hundreds of thousands of dollars.
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Oct 10, 2016 19:49
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ego symphonic posted:If nothing else my time on the something awful dot com forums has made me more appreciative of the normal, healthy relationship that I have with my parents and in-laws who have never once tried to scam me out of hundreds of thousands of dollars. My time with my wife has done the same. My parents have bailed us out multiple times with no strings attached, and they even offered me their paid-off condo rent-free. I don't want to take it because they need to sell it off to pay off the mortgages on their main house that they had to take out to support my brother and I and still have enough for retirement.
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Oct 10, 2016 20:06
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One thing that really needs to be cleared up is whether his share is before or after the bank is paid off; there's definitely a reading of what you've shared that basically indicates he has a ~63% ownership in the house, and no responsibility for the mortage. In that case, if as speculated earlier the house sold for $655k with $615k left over, he'd be due $387k, there would be $245k left over after the bank is paid off, and you'd *owe him* ~142k, instead of walking away with any sort of money.
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Oct 10, 2016 20:18
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Steve French posted:One thing that really needs to be cleared up is whether his share is before or after the bank is paid off; there's definitely a reading of what you've shared that basically indicates he has a ~63% ownership in the house, and no responsibility for the mortage. In that case, if as speculated earlier the house sold for $655k with $615k left over, he'd be due $387k, there would be $245k left over after the bank is paid off, and you'd *owe him* ~142k, instead of walking away with any sort of money. I'm not really sure I follow...? The mortgage still has 370K left to pay off. I'm going to post a full version of the contract with names redacted, just a moment.
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Oct 10, 2016 20:28
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Rotten Red Rod posted:I'm not really sure I follow...? The mortgage still has 370K left to pay off. That would be good. The question is does he own a percentage of the Equity or a percentage of the asset?
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Oct 10, 2016 20:31
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Steve French posted:One thing that really needs to be cleared up is whether his share is before or after the bank is paid off; there's definitely a reading of what you've shared that basically indicates he has a ~63% ownership in the house, and no responsibility for the mortage. In that case, if as speculated earlier the house sold for $655k with $615k left over, he'd be due $387k, there would be $245k left over after the bank is paid off, and you'd *owe him* ~142k, instead of walking away with any sort of money. Yeah that should definitely be called out.
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Oct 10, 2016 20:37
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daslog posted:That would be good. The question is does he own a percentage of the Equity or a percentage of the asset? Don't know. I need help because I don't know what I'm doing, haha. Here you go - father in law's name is in green, my name is in red, wife's name is in blue, and address of house is in yellow. Page 1: http://i.imgur.com/2OCmlKr.png Page 2: http://i.imgur.com/Snn6pWt.png Edit: as a side note, the lawyer I found charges $330 an hour (or $90 for the first 20 minutes of our first ever session). He's specialized in real estate. Is that a fair price? I've never used a lawyer in my life so I have no idea. Rotten Red Rod fucked around with this message at 21:44 on Oct 10, 2016 |
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Oct 10, 2016 20:38
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What names are on the mortgage? And what names are on the title of the house?
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Oct 10, 2016 20:48
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Droo posted:What names are on the mortgage? And what names are on the title of the house? Both my name and his name are on the mortgage. I think all 3 names are on the title, but I have to look through my documents at home to know for sure. Edit: 99% sure all 3 names are on the title. I have to get it from the county clerk's office to be sure, but they're closed today (Columbus day). My wife's name is not on the mortgage because of her credit. Rotten Red Rod fucked around with this message at 20:57 on Oct 10, 2016 |
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Oct 10, 2016 20:52
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Of course there's an arbitration clause.  There's a decent chance this entire letter represents a conspiracy to commit fraud, as well as actual fraud, depending on the degree to which the lender was fully informed of it.
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Oct 10, 2016 20:52
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Rotten Red Rod posted:Don't know. I need help because I don't know what I'm doing, haha. On paper, this deal doesn't look that bad really. Basically, it seems you have agreed that in consideration for the $100k down payment and presumably actually getting the house loan in his name (edit: confirmed), you have exclusive right to use it and an ownership interest increasing from 33% to 60% over time. Try getting any other 100k loan without repayment needed on the presumption of future appreciation of a primary residence and I bet you the terms would not be as good. Actually, I think I heard about something like this in the news recently - this was a mortgage lending strategy in the 80's, and the homeowners were whining about it (not saying you are) because they didn't understand why their $800k house only nets them like $50k when they sell it. You've sacrificed future gains and mobility for short-term benefit (the $100k). As an investor, he certainly took on a variety of risks and should be compensated.
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Oct 10, 2016 20:57
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Rotten Red Rod posted:Don't know. I need help because I don't know what I'm doing, haha. I think I see how this works. Could you provide some samples of how the amount you pay him? It might make it easier to back into the formula if we had the math.
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Oct 10, 2016 20:58
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Leperflesh posted:Of course there's an arbitration clause. I see. If I want to abide by it, and get my 33 or 35% or whatever of the profit, what should I do? I'm justifiably worried he will try to block the sale if we call him out on this, and we are totally screwed if so. daslog posted:I think I see how this works. Could you provide some samples of how the amount you pay him? It might make it easier to back into the formula if we had the math. Pay him? I pay the mortgage and property taxes. I've never paid him directly.
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Oct 10, 2016 20:59
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