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Does anyone know what mortgage lenders think of applications where the income is investment returns (or capital drawdown in dire circumstances) rather than salary? Canadian lenders ideally, but I’m thinking that things aren’t totally different in the US.
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Feb 14, 2018 21:21
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Subjunctive posted:Does anyone know what mortgage lenders think of applications where the income is investment returns (or capital drawdown in dire circumstances) rather than salary? Canadian lenders ideally, but I’m thinking that things aren’t totally different in the US. Like daytrading/short term trading profits, or is your last name DuPont and you have millions in a trust and take regular disbursements from the investment returns? Canadian mortgages are quite a bit different than US mortgages. Not sure if underwriting is similar though.
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Feb 14, 2018 22:18
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ZachAttack posted:This is great info, I have some follow up questions of you dont mind. No, the appraisal is something ordered by your mortgage company as part of their underwriting process. This can also be automated in some circumstances, where you will pay less than the full appraisal cost. If you've already paid for an appraisal then you're further along in the process than ideal for shopping the loan, but it is still possible to make up the fee in closing costs. Your current appraisal is likely worthless to the next bank unless they happen to use the same company or you catch them on a good day. The loan estimate is pretty easy and should be spat out at every step of the way. They will ask you for annual W-2 income, debt, and a credit check. This is fine do not sweat the extra pulls. You will have to sign a sheet of paper with the lender you close with indicating they were all shopping for this mortgage and none of them resulted in a line of credit. If they ask you for further documentation other than "your word" (more or less) tell them you will provide that if you decide to go with them, but to cut you a loan estimate now so you can shop the loans. "If I'm lying in a material way you're going to find out, I have no interest in wasting my time." better.com literally has a button where you can view the current one based on buttons you have pressed. I was extremely impressed with them. Closed on time with minimal hassle, but it was a refi so I didn't care about strict timing. Subjunctive posted:Does anyone know what mortgage lenders think of applications where the income is investment returns (or capital drawdown in dire circumstances) rather than salary? Canadian lenders ideally, but I’m thinking that things aren’t totally different in the US. Do you have a "high end" bank account e.g. "Citi Private Bank"? If so - call them. If not - get your partners together and make them offer you one, including all of the associates. They're the ones who are going to understand those complicated situations.
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Feb 14, 2018 22:40
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skipdogg posted:Like daytrading/short term trading profits, or is your last name DuPont and you have millions in a trust and take regular disbursements from the investment returns? My name isn’t DuPont, and there’s no trust involved, but it would be regular disbursements. H110Hawk posted:Do you have a "high end" bank account e.g. "Citi Private Bank"? If so - call them. If not - get your partners together and make them offer you one, including all of the associates. They're the ones who are going to understand those complicated situations. I do have a private banking account, but I’m not sure I want to go with my bank. Their rates don’t look great. If that’s what it comes to then that’s what I’ll do, though. The partners aren’t allowed to loan money to each other, I believe! Thanks.
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Feb 14, 2018 23:21
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Subjunctive posted:I do have a private banking account, but I’m not sure I want to go with my bank. Their rates don’t look great. If that’s what it comes to then that’s what I’ll do, though. Yeah check the cheap ways first. If they all balk at it (I doubt they will) you can go with the big bank. You would pay more, but you would actually get your loan. This falls squarely in "rich people problems." I meant if you don't magically have a private bank account to have your partners call the primary bank your company uses and force them to offer one to the members of your LLC/LLP.
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Feb 14, 2018 23:36
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Subjunctive posted:Does anyone know what mortgage lenders think of applications where the income is investment returns (or capital drawdown in dire circumstances) rather than salary? Canadian lenders ideally, but I’m thinking that things aren’t totally different in the US. In the US it would depend on the source and structure of the income, and also if it is coming from businesses you are an owner of (as opposed to just holding stock) then they would want it to be from the same businesses each year. If it is stable or increasing year to year you should be OK. The required documents would vary depending on source and structure. If you own more than 25%of a business they ask for a lot more docs.
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Feb 14, 2018 23:45
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Subjunctive posted:My name isn’t DuPont, and there’s no trust involved, but it would be regular disbursements. The DuPont comment was tongue in cheek. In the US, in my prior experience, if you can provide solid documentation of income for the last 2 years underwriting shouldn't be an issue, especially if you have other reserves available to you. Full disclosure I haven't really paid attention to the mortgage industry in 10 years or so, it's possible one of the thread regulars that works in the industry contradicts what I just told you. I don't think much has changed though.
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Feb 15, 2018 01:07
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skipdogg posted:The DuPont comment was tongue in cheek. In the US, in my prior experience, if you can provide solid documentation of income for the last 2 years underwriting shouldn't be an issue, especially if you have other reserves available to you. Full disclosure I haven't really paid attention to the mortgage industry in 10 years or so, it's possible one of the thread regulars that works in the industry contradicts what I just told you. I don't think much has changed though. Ha ha yeah sure no changes at all in the last 10 years...
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Feb 15, 2018 01:48
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If you are self employed they will want tax returns and a k1 or whatever you get, plus a letter explaining wtf you do from someone you work with.
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Feb 15, 2018 01:51
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Mahoning posted:Each area is different but in my area, the independent mortgage brokers typically have the lowest closing costs compared to the big banks who typically have the highest. I would almost always recommend to shop around only with local banks, local credit unions, and local independent mortgage brokers. They not only tend to have the lowest costs, they are typically more flexible too. And as someone rightly said earlier, all things being equal, you want someone who is capable of closing the loan on time (or sooner!) because that is honestly the #1 thing that delays closings. Any good realtor or real estate attorney is going to know the lenders who are cheap and/or can close a loan in the promised amount of time (or at least who to stay away from). In my area the big banks were the cheapest in terms of rate, which dwarfed any closing costs differences. Our loan took half a month longer than expected to close but honestly the seller was the party in a rush not me.
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Feb 15, 2018 08:18
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Mandalay posted:In my area the big banks were the cheapest in terms of rate, which dwarfed any closing costs differences. Our loan took half a month longer than expected to close but honestly the seller was the party in a rush not me. Yeah like I said, each area is different. (And actually, as a bit of an aside, I don't think people understand just HOW different areas are. It's why real estate "advice" on the internet should always be taken with a grain of salt. I have worked in real estate for 5+ years and honestly when I hear people talking about real estate in other areas of the country, sometimes it sounds like a foreign language. A small example but around here, absolutely nobody says a house is "in escrow".) For some people though, closing on time is the most important thing for any number of reasons. Not the least of which is if the deal doesn't close within the timeline on the contract, the seller is under no obligation to extend the contract (or release your earnest money) and sell you the house. Obviously most sellers would be dumb to do this, but hey...if they have a backup offer that's cash and can close in two weeks, why should they wait for your big bank to get their poo poo together? Who's to say they won't ask for another extension?
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Feb 15, 2018 16:01
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Yeah. That’s why I was really happy with my purchase of the Nolo guide to buying a home in California (a book). They had specific advice for Southern California customs and such.
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Feb 15, 2018 16:18
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Is there any particular reason why you're allowed to loan off your 401k up to 50% of it's value as opposed to an IRA traditional where you can only withdraw $10k which is just considered a non penalized withdrawal and not a loan? Or is it just arbitrary bullshit like most of the rule differences between 401k/IRA?
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Feb 18, 2018 07:26
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FungiCap posted:Is there any particular reason why you're allowed to loan off your 401k up to 50% of it's value as opposed to an IRA traditional where you can only withdraw $10k which is just considered a non penalized withdrawal and not a loan? Arbitrary bullshit. That's not even close to the most ridiculous. Take a look at the differences between after tax 401k contributions, converting them to Roth 401k, and converting them to a Roth IRA if you want a headache.
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Feb 18, 2018 08:54
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For those of you who have bought older houses, how did you handle the plumbing during the home buying process? I suspect that a house we're interested in has pipes older than 1975, with lead in their the solder or the pipe itself. It does have some copper pipes (unknown what percent). I haven't paid for a lead water concentration test yet, or had the house inspected yet. The safety of the water is a pretty big question mark. Anyone else deal with this? What'd you do? Or would you do?
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Feb 19, 2018 20:39
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I'm not knowledgeable about this but I imagine any pipes that old have already leached most/all the lead out of the solder, and/or that there's enough mineral build up in the pipes that it's not an issue.
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Feb 19, 2018 20:56
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After our offer was conditionally accepted, we scheduled both a general inspector and a plumber (Thanks H110Hawk). The plumber offered to do a sewer inspection for $225 (scope with a camera) and offered to inspect the overall plumbing + sewer inspection for $375. The guy gave his blessing with the caveat that plumbing could fail at any time in the future but that we should cross that bridge when we get to it. I get the impression that plumbing being a ticking time bomb is just part of the joy of homeownership.
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Feb 19, 2018 20:59
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Mandalay posted:After our offer was conditionally accepted, we scheduled both a general inspector and a plumber (Thanks H110Hawk). The plumber offered to do a sewer inspection for $225 (scope with a camera) and offered to inspect the overall plumbing + sewer inspection for $375. Wait so he said the plumbing was fine but also could fail at any moment? Was that maybe just a legal thing since you can't really thoroughly inspect the plumbing without opening the walls?
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Feb 19, 2018 21:16
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pmchem posted:For those of you who have bought older houses, how did you handle the plumbing during the home buying process? We bought a 1952? We had a full scope inside & out as part of the initial inspection. The pipes were a mishmash of half a dozen different materials of different ages - there was some lead used, but only on the sewer outtake, so not a concern insofar as drinking water. Most of the outtake were cast iron or clay with some abs(?) and the rest was a mix of pvc, copper and abs depending on function and age. Honestly it hasn’t been that big of an issue. We’ve also done a fair chunk of remodeling over the past few years and replaced whatever we could reach/made sense to replace.
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Feb 19, 2018 21:18
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pmchem posted:For those of you who have bought older houses, how did you handle the plumbing during the home buying process? I bought a house built in 1962 and the things that would have been helpful to test would have been: 1) run every fixture at once and see where the pressure is and isn’t. 2) fill up each sink and drain it to see how clogged everything is. 3) overload the roof gutters and make sure they drain (the downspouts connect to below grade pipes at my house). 4) make sure there is an easily accessible clean out (there wasn’t. They dry walled it in.)
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Feb 19, 2018 21:27
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QuarkJets posted:Wait so he said the plumbing was fine but also could fail at any moment? Was that maybe just a legal thing since you can't really thoroughly inspect the plumbing without opening the walls? Yep I think so. I asked the plumber how long the pipes would last (this is our first time owning a house) and he gave approximately that answer.
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Feb 19, 2018 21:52
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HEY NONG MAN posted:I bought a house built in 1962 and the things that would have been helpful to test would have been: All good points, although every home inspection I’ve been on, they’ll run all the faucets at once to test the pressure and the draining in one shot. Remember that clogged or not properly graded gutters and downspouts are one of the main causes of water in the basement. Also with regards to the downspouts, it’s also a good idea to make sure they drain somewhere other than out into the yard. I’ve seen so many times where the downspouts empty out 10-15 feet away from the house which is just gonna end up leeching back into your basement if you’re in a rainy enough area. Out to the street and eventually a storm drain is one method, but I’ve been told that’s not legal everywhere, so be careful with that.
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Feb 19, 2018 22:38
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tortilla_chip posted:So in my situation the Costco (!) referred lenders ended up being the way to go. Yeah this was our experience too. They were a pain in the rear end to deal with but cheapest by far.
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Feb 20, 2018 23:12
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Ugh, this process sucks. Initial inspection was fine and thought everything was in order, but at the recommendation of our agent we checked moisture in the exterior because there's stucco Dryvit. Turns out the exterior has allowed moisture into the wood and we have to get that evaluated now and an estimate to repair, but it's huge if it's superficial vs interior rot. Getting an estimate, but had to argue hard with the seller to get an extension to do so, and it's not clear they'll agree to repair and/or give a credit/reduction in price to offset it all. It'd just be awful if hey surprise, it's actually a $40k job and not a $5k job and they refuse to do a full repair. Glad we got the inspection, but drat this process is stressful.
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Mar 2, 2018 02:45
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Chu020 posted:Dryvit This is pretty much a deal killer that your agent should have told you about way before this. To be fair, it has a bad name because of bad installs. but if that's a known thing you area all dryvit homes are just toxic for the very reasons you are talking about. I'd have a conversation with your agent. A "this is how you get fired if you don't have a really drat good answer" conversation.
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Mar 2, 2018 02:53
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Our house has EIFS, but it was installed directly over brick, so aside from having to keep an eye out for potential termite tubes going up into the delicious water sponge siding, I should be fine.
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Mar 2, 2018 03:30
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Motronic posted:
My house has real stucco over insulation, over a drainage plane, and it still keeps me up at times. Of course, the original EIFS install (in ~1994) led to rotting, which meant the prior owner put in a new exterior and all new windows a couple years before we bought it. Yay. Our entire subdivision was built around that time, mostly using EIFS. Probably less than 20% of them still have the original EIFS.
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Mar 2, 2018 11:07
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gvibes posted:Older installations were “bad” due to manufacturer instructions though, right? Like, installers were told no drainage plane/moisture barrier was necessary or something like that? Maybe I’m remembering incorrectly. That seems to be my recollection as well. Non-dumb contractors knew that wasn't gonna work and either did it right or didn't use it at all. It was the lowest bidders that loved that poo poo because the instructions basically said "no prep, just slap it on!"
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Mar 2, 2018 21:24
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So I just moved into the condo my parents own and have been renting out to tenants for 30+ years. My dad was bragging about how great the most recent tenant was and what good shape they kept the condo in, etc. After they moved out we went in to inspect and found severe water damage in the kitchen from a leaky dishwasher (obviously had been happening for a long time and they just ignored it) and all the window/sliding glass door screens destroyed, as well as a number of holes in the wall. There's just a bunch of issues that weren't even their fault that my dad would have taken care of right away, like old plastic light fixtures that are melting and some vents that are falling off, that they chose to ignore instead. Now instead of bragging how good of a tenant she was, he's thinking about how much of her deposit he'll keep. The leaky dishwasher is the one that confounds me, she lived there with 2 kids and was ok with a ton of mildew under the kicthen sink for possibly months? You can see the water damage through the wall in the bedroom. At the very least we'll have to replace all the kitchen cabinetry around the sink and dishwasher, and maybe even some drywall. The moral of the story is don't trust tenants ever, no matter how much you like them. (Despite this all, by the way, my mom said this is the best condition it's EVER been left in. Previous tenants had absolutely trashed the place even more.) Bonus: check out how 70s this place is. Gotta love that pointless banister in the middle of the room and the ugly chandelier that defines your Dining Room Table location unless you want to bonk your head on it constantly! (Yeah that's all coming out.) 
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Mar 2, 2018 21:50
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Looked at another half dozen places today, this poo poo is exhausting. Found one place that's got a lot of pros and some substantial cons - it's enough under budget that I could probably do some major repairs/upgrades before moving in, but not everything I'd want to do. That's not necessarily a deal-breaker, it's big enough that I could basically just quarantine substantial chunks of the house while I finish it to my liking, but then there's stuff like yard size, etc. which I can't change at all. It's also got no cooling whatsoever, so that's basically an immediate x thousand dollars to put in AC that I can't put towards whatever else. It's also essentially a large single bedroom house with a lot of attached storage space and a variety of places to poo poo, despite being listed as 3 bed, 3 bath. The 700-800 sq. ft. basement is completely unfinished, which I don't mind doing myself, but it has some more worrying details and the staircase down looks like it was built by someone blind drunk. Raw, warped wood nailed in at weird spots with like a 1.5" gap between the stairs and the interior wall, all the way down. The steps are unfinished 2x8, the face of each stair is warped, miscut plywood haphazardly nailed in. All in all, the interior layout is great though and most of the stuff I'd otherwise want to do is just cosmetic.
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Mar 3, 2018 00:33
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H110Hawk posted:Yes. Because most people think they're all the same or don't know they're allowed to shop it around and negotiate pricing. Get 3 bids for the same loan and compare them. Pretty much the only thing you need to worry about is their ability to close within the deadline. You will likely see thousands of dollars in difference between lenders. Some are as simple as "This bid is entirely identical but this one says Mortgage Fee: $2,500" or whatever - It's the ticketmaster game but without the monopoly. Thanks for this post, added into the OP. I don't check this thread often anymore so if there is anything that people think should be added/changed, please pm me about it!
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Mar 3, 2018 06:00
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Hauki posted:Looked at another half dozen places today, this poo poo is exhausting. Found one place that's got a lot of pros and some substantial cons - it's enough under budget that I could probably do some major repairs/upgrades before moving in, but not everything I'd want to do. That's not necessarily a deal-breaker, it's big enough that I could basically just quarantine substantial chunks of the house while I finish it to my liking, but then there's stuff like yard size, etc. which I can't change at all. It's also got no cooling whatsoever, so that's basically an immediate x thousand dollars to put in AC that I can't put towards whatever else. It's also essentially a large single bedroom house with a lot of attached storage space and a variety of places to poo poo, despite being listed as 3 bed, 3 bath. The 700-800 sq. ft. basement is completely unfinished, which I don't mind doing myself, but it has some more worrying details and the staircase down looks like it was built by someone blind drunk. Raw, warped wood nailed in at weird spots with like a 1.5" gap between the stairs and the interior wall, all the way down. The steps are unfinished 2x8, the face of each stair is warped, miscut plywood haphazardly nailed in. If you see something like that stairway to the basement, it's always a red flag. Proceed with extreme caution. Also, you don't need to spend $10,000 to put in central air. Just get a few window units. They are very efficient nowadays. I cool pretty much my whole house with four units. One in each bedroom and a higher BTU unit downstairs. The bedroom units are all like 3.8 Amps and very efficient/quiet.
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Mar 3, 2018 14:58
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I have a few questions: When should be the age I should buy I house? How many years do I have to live somewhere before it is smarter buying a house than renting? My mom always tried to put in my head that a house was an "investment", but are there other ways I can invest for my future without worrying that I'll live in a box a couple years outside of retirement?
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Mar 3, 2018 20:24
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Never to all of the above.
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Mar 3, 2018 20:28
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punk rebel ecks posted:When should be the age I should buy I house? That decision has little to do with age. It's about your life and financial situation. punk rebel ecks posted:How many years do I have to live somewhere before it is smarter buying a house than renting? It depends on market and you risk tolerance, but the rule of thumb is about 5 years. punk rebel ecks posted:My mom always tried to put in my head that a house was an "investment", but are there other ways I can invest for my future without worrying that I'll live in a box a couple years outside of retirement? Your mom sounds well meaning, and obviously from a different generation. As well as someone who hasn't spent much time keeping up with modern finances. You should be prioritizing tax-advantaged retirement accounts for retirement savings. Another rule of thumb: put 15% of your income into one. Anything more specific to your situation will require a lot more information, like your current financial and job situation and life goals.
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Mar 3, 2018 20:30
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couldcareless posted:Never to all of the above. This is a more accurate answer.
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Mar 3, 2018 20:33
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punk rebel ecks posted:I have a few questions: There is no rule. You should buy a house when doing so fits your lifestyle and financial situation. quote:How many years do I have to live somewhere before it is smarter buying a house than renting? It is never automatically smarter to buy a house than rent. Everything depends on the details of your personal situation. e. Motronic's 5-year "rule of thumb" is making some assumptions that I'm not making. quote:My mom always tried to put in my head that a house was an "investment", but are there other ways I can invest for my future without worrying that I'll live in a box a couple years outside of retirement? Yes. You can and should save money for retirement irrespective of whether or not you own or rent the place you live in. And, given that you always have to live in a place, the "investment" of your primary residence isn't really the same as retirement savings - if you have to sell your home to afford to eat when you're 75, then where the gently caress are you gonna live? Moreover, houses actually kind of suck as investment vehicles compared to the alternatives. You should buy a house when you can afford to do so, and when doing so fits your situation and goals. Nobody can give you useful advice about either without knowing a lot more details.
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Mar 3, 2018 20:34
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Leperflesh posted:e. Motronic's 5-year "rule of thumb" is making some assumptions that I'm not making. Yep yep. "Rules of thumb" are packed with assumptions about all kinds of things that make blindly following them Not A Good Idea At All. They are a starting point for research into your specific circumstances and a basic sanity check.
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Mar 3, 2018 20:41
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Thanks for the responses. Basically I'm in my late 20s and moving around the country to decide where I want to live at. I took the plunge a few months ago and drove all the way out to the Pacific Northwest blind. I'm currently living in Portland and am happy with it so far. However, I am a bit concerned as house prices are really high here. The same goes to other places I think I may try out living, specifically California. I mean I think it would be cool to live in these areas but I am worried I can't do so long term due to high housing prices. Motronic posted:Your mom sounds well meaning, and obviously from a different generation. As well as someone who hasn't spent much time keeping up with modern finances. Why are things different now than before?
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Mar 3, 2018 21:03
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punk rebel ecks posted:Why are things different now than before? People of older generations seem to think that a home CAN NOT EVER LOSE VALUE. This was never the case, and the assertion was laid bare a decade ago. Less than 30 years ago, who would have thought that the markets that crashed and never recovered would have done that? If you end up in one of the places where this happens, not only is your home worth less but you probably don't have a job anymore - or at least not as good of one. And your mortgage payment stays the same. Fresno, Vegas, Bakersfield, Ft. Lauderdale....none of these (and more) have actually recovered yet. Large areas of Detroit is are waste land where the city can't afford to keep public utilities running anymore because of low population density/tax revenue. And now you're talking about bubble market places like Portland and (I assume coastal) CA.
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Mar 3, 2018 21:32
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