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dukeofurl posted:They paid $79,000 - I ran 30 years at 5% through the amotorization calculator. You're comparing apples to oranges with the total amount paid and the 1984 cost of the house, because of inflation. The home's worth, according simply to inflation, should be around the 190k mark. If you adjust what your parents paid, it's more than that, but not by as ridiculous a margin as it at first appears. When the oversupply tapers off and new construction will by necessity cost 190k then the home prices should get back in line.
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Jun 5, 2009 17:39
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qirex posted:Can someone give me a bit of a breakdown on what normal condo fees are? I'm seeing a lot of places with $400+ monthly fees which just sound extremely high for buildings with no pool or doorman or anything like that. It depends on the area and what's included. I'm treasurer for a tiny (8-unit) condo association, our dues are $290/month. We include routine exterior maintenance/grounds upkeep (300-400 per month), cable tv (~250/month), water (~450/2 months), electricity for outbuildings (~100/2 months), sewer (~200/month), trash/recycling (~250/month), pest control (~50/month), insurance (~400/month, walls-out), and earthquake insurance (~2500/year). Leftover is put in reserves, which is tapped for emergency situations like our water going out or non-routine maintenance like tree removal. It's also not really enough, since we had an assessment to deal with reroofing instead of having it already in the reserves.
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Aug 28, 2009 00:36
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Dik Hz posted:Stimulus money isn't free money. It comes from somewhere. Y'all aren't going to reach consensus here. Either deficit spending in a recession is throwing good money after bad or it's a stabilizing factor that more than pays off over the long run. No one knows, but most modern economic theory points to the latter. And the levels of interest paid on cash advances is generally higher than the interest rate of government debt. It's the same trap that people fall into on a personal scale when they talk about debt avoidance. Quite often debt is useful, sometimes even when the interest rates are usurious, if the outcome has a higher expected value. Since you can't compute the expected value exactly, and on a personal scale you only get one shot, most people will recommend fairly conservative debt management practices - go into debt for your education or for a mortgage.
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Oct 26, 2009 21:43
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Verloc posted:Reality check plz: B. It shouldn't put you off too long, since your income is pretty high. Buying a house at this point would make you completely illiquid. I'd say bare minimum of 10% down, a grand or so for various closing costs, and 3 months emergency fund in place. Getting rid of your credit card debt and car note(s) would also give you more of a cushion.
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Mar 5, 2010 22:20
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Safety Engineer posted:Please, for the love of all that is good and holy do not buy a house with someone unless you're already married or planning to marry. In deference to our moderator, domestic partnerships in some jurisdictions can provide similar benefits. At a bare minimum, draft a will when you buy property with someone.
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Mar 6, 2010 20:54
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Leperflesh posted:"My girlfriend" means different things to different people, so I'd ignore a lot of that stuff. My girlfriend was my "girlfriend" for 10 years before we got married, and we were in a committed long-term relationship after the first two. Your mileage may vary. I've met plenty of people who were married but had less of a commitment to each other (or understanding of each other) than my girlfriend and I did after two or three years. I think you're conflating the legal ramifications of being married with the emotional commitment to the relationship. I don't care if you have the most solid of relationships, it's still a better idea to get married before you buy property together. I've had to deal with a lot of the crap head-on, because my partner and I can't get married and domestic partnerships only became an option after we already bought a condo together and merged our finances. But we sure as hell had a will and power of attorney set up before we went all-in.
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Mar 7, 2010 07:50
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Well, we agree that if you're going all-in, you need some legal protections in place. Marriage is a convenient shorthand that's supposed to ensure some form of equitable distribution if it dissolves (hence the need to involve the court), but a pre-nup would make that explicit.Leperflesh posted:In any case, I am 100% on board with the idea that a couple is well-advised to co-habitate for a couple of years before deciding they're ready to commit to a financial union that would be incredibly costly to sever. Whereas I am not. And the 2002 and 2010 CDC fact sheets on marriage show that it's basically a wash for whether a marriage will last, with a slight bias towards the non-cohabitating couples (likely not causal, merely an association). If you are the type of person who, for religious or whatever reason, feels ready to take that step without cohabitating, go for it.
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Mar 7, 2010 09:55
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Backno posted:Going to add into this as well, hell there is a poster here who is fight with his ex-fiance about a house they had together for a few years. Seriously do not get a house with a gf/bf, a group of buddies, etc unles you know you can cover the full mortgage payment your self. And even then, put it in your name only. If you can't get a loan in only your name, you probably can't cover the whole payment by yourself.
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Mar 10, 2010 07:11
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Ophelia's Ashes posted:Buying our first home has turned into a nightmare and I'm about ready to rent the rest of my life. If you're still in a similar position as last month when you posted, you absolutely can't afford to buy a moneypit, particularly not at this price with less than 20% down. If your reduced income for extended maternity leave is still part of the near-future plan, you're setting yourself up for some really tough times.
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Apr 5, 2010 18:35
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Black Jasper posted:My question is do I have much to gain by waiting to see if house prices drop further? By my calculations, if a $200k home drops to $180k my mortgage payment decreases by <$100/mo, which to me isn't something worth waiting for. I conceive that if I wait I may able to purchase more house for the same price, but that would mean higher utilities, taxes, etc. I'm happy with what I can afford right now. What's your time frame? I think you might consider waiting a year for other reasons, to make sure you want to be in this city long-term and to figure out what neighborhood is the best fit for you. Cheaper rent will give you more money towards a down payment or home maintenance fund. If you're thinking about renting a room in your house it'll also give you a chance to try out housemates before you're the landlord.
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Apr 19, 2010 17:07
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necrobobsledder posted:They're getting paid $65k by the PMI company, which makes up all but about $30k from the price, which has been made up for by the interest payments I've made to them in these past few years. They've made money off me, period, and I've come out -$90k and they're maybe up about $5k. PMI protects the bank, not the consumer. I got it because the lender agreed to pay it, my family advisors said I should take the offer by the lender, and I had planned to keep the place a long time, so I preferred to keep as much liquid as possible for emergencies. They're in the business of loaning out other people's money to you in their mortgages. 5k over 3 or 4 years is less than they're paying out in some of their savings accounts (I have one hovering around 1.15% APY), without factoring in any of the other transaction costs.
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May 27, 2010 03:59
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necrobobsledder posted:And even if I had sold the property as a regular sale, they'd have been "hosed over" in some respects because I'd be cutting short the terms of the mortgage. Also, let's not forget that the new owners are getting a new mortgage, so somebody else comes along to take my spot in some respects. In fact, it is in the bank's best interest for me to keep paying interest as long as possible instead of paying down my principal, and I could have hosed them over just by paying off my mortgage so early. The contracted terms are for the bank to make a certain interest rate on the amount they have loaned out. If you pay it off early, they get to loan out that principal to other loans - same as if you had a regular sale. But with a short sale, they have to take the loss on the books for that year. They're only getting back more than they loaned you by a small amount, because that 5% or so interest you paid in over the previous two or three years has been completely erased by the shortfall now. They've mitigated their loss by requiring PMI, but make no bones about it, they're still at a considerable loss compared to someone paying off the entire amount.
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May 30, 2010 17:31
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Leperflesh posted:Let's take this hypothetical scenario and I'm interested in feedback on my thinking here. If the 80k in 'savings' is invested somewhere that has a higher average interest rate than the effective mortgage rate (counting any tax breaks for mortgage interest), then scenario 1 will end up higher than scenario 2 in every case. If it's less, then they'll end up behind scenario 2. In both cases, they own a house. In one case, they've borrowed 80k at x% and invested 80k at y%. If x>y they lose money, if x<y they make money.
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May 13, 2012 03:12
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SpclKen posted:Interesting that you are bringing up these scenarios. My wife and I will be paying off out house within the year and we are 30 years old. My wife is pregnant and wants to retire from her job when the babies come (twins!). We plan to just live off my salary and figure that the less debt and monthly payments are better. I think this is a great idea, but it seems most people here think that I should keep the mortgage. I think it allows us to be debt free while starting a family and even if we miss out on a few percentage points, it will allow us much more freedom on a monthly cash flow so I can max out 401k and save for college funds instead of paying towards the mortgage. I would be happy to give more details if anyone wants. I can understand making a measured decision to do this. That said, most of the people who I've spoken to that have accelerated their mortgage payments are relying on emotional reactions (debt=bad) rather than measuring opportunity costs. It comes down to risk aversion. A safe return (in the amount of their mortgage interest) is better than you'll get anywhere else that is similarly safe. From a retirement standpoint, though, keeping the mortgage around may be a good choice, or only paying the mortgage down once you've maxed out your retirement savings. Generally speaking, as long as the market isn't crashing, the earlier you put in money the better you are. Foregoing some retirement savings to pay off the house quicker is not a good strategy under the assumption of even modest growth. You also may end up with a situation after the house is paid off when you run out of tax-advantaged accounts for investment.
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May 13, 2012 07:12
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Since this is a very weird situation, it involves federally subsidized loans and you haven't gotten any traction going up the chain with the loan agency, you might try contacting your house rep.
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Nov 30, 2012 16:58
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Baronjutter posted:If I can buy a condo and in like 5-10 years sell it and, adjusting for inflation and taking into account my condo fees, break even then that's a huge win because it means I've just saved 5-10 years worth of rent. Heck so long as I come out about even with renting I'm happy because renting in most of north america is horrific. I think that definition of break even is unlikely except in a bubble. Transaction costs are 3% of purchase price and 3% of sale price, annual maintenance is ~1% of current value, add in whatever % is on your mortgage, and inflation is on top of that. The condo fees may take care of some of the annual maintenance, but there are more that are your responsibility alone (appliances, walls-in fixes).
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Dec 6, 2012 19:13
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Rooster Brooster posted:When looking to buy recently I ran the numbers in as much detail as I could to see the difference between renting and buying. Assuming rent would be a bit cheaper than an equivalent mortgage, factoring in the transaction fees, taxes, association fees, insurance, and lost interest on extra savings from renting... let's just say that people who give the 5-7 year range are really stretching the definition of "break even". Even there though, they're using 'break even' as compared to renting - which is how I usually see it written. Expecting to 'break even' as compared to paying no rent is a buy-in-2002 sell-in-2007 experience.
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Dec 6, 2012 23:11
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Pfhreak posted:Well, we put in an offer, got countered, countered back, and back and forth again. We ended up with a price 3% under asking and 11% under the original listing price. In North Seattle, for a 4000 sq foot house, I feel like we came out surprisingly well for first time home buyers. If you want another rec, I bought in the greater Seattle area and we went with Mike Veitenhans (who was recommended by our realtor, but also had high reviews on Yelp). He was methodical and personable during the inspection, and turned around a very detailed report in a day or two.
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Jan 9, 2013 18:21
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Capslock Holmes posted:Thanks for the advice guys. The wife quitting her job wouldn't be just to qualify for the USDA loan (it caps out around 75 here). We're also thinking about the benefit of her being at home with the baby, which is more than just a financial decision, though this is the finance forum I guess. One other piece to consider is rejoining the workforce when your kid's a little older. If your wife is in a situation where it's possible to go part-time (or find a part-time position), that would make coming back way easier. The job-search situation is a lot easier when you're already employed.
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Jan 23, 2013 03:41
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Spamtron7000 posted:For my part, I appreciate the feedback. I sometimes overlook the fact that the banks have recourse inasmuch as they own the house when loans are defaulted. However, I do strongly feel that many American borrowers are smart enough to recognize how the laws that protect them can be abused to either default or sell short out of perfectly good and fair loans and that it's a problem. All the market risk is now passed on to the bank. Sometimes it's a fine line to draw between righteousness and fraud. Many Americans just don't care about that fine line - they're selfish and feel entitled to poo poo all over the same bank who lent them the money to help fulfill the dream of home ownership. That's what I don't like about the system. I understand the sentiment here, but the practicalities of the situation can make it more cost-effective for the banks to eat the difference. Getting a judgment or reinstating debtor's prison costs a lot, often more than the banks would get back out - so it would only be punitive or a scare tactic to keep people on the borderline in line, and a net cost to society at large. As scare tactics go, the fact that you have a credit report that follows you around is a sufficient deterrent for a lot of people. There aren't many folks who would just default if they had the means to comfortably pay their debts - the downside on creditworthiness isn't worth it. Banks tightening lending standards means there are less people on the knife-edge who have to make that choice. They have to find the sweet spot where they can offer a profitable competitive product.
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Jan 23, 2013 21:55
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dreesemonkey posted:If that number is accurate, and our current P/I payment is around $950/mo, I'd need to shovel around $400/mo extra at it to meet that goal? Doesn't seem likely and/or that money would be ultimately better spent going to retirement savings or something. I still would like to pay it off early, but looks less likely now. My vote is with retirement savings, for two reasons: 1. Personal opinion of higher return on retirement savings. Though not guaranteed, my retirement savings (with various tax advantages) will probably beat my mortgage rate (with tax deductions). 2. Cap on annual retirement contribution. If I got rid of my mortgage early, I wouldn't be able to funnel all the money I saved into my retirement because of the limits on annual retirement contributions. Other savings and investment instruments have additional taxes on gains. So I think there's a good chance of coming out ahead by paying the mortgage on schedule, maxing out retirement, then putting any leftover into early mortgage payoff.
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Jan 29, 2013 17:22
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dreesemonkey posted:Well with the "general cost of life" and "things we'd like to do", maxing out Roths would be nice but also not in the cards. My wife and I do about 30-40% of the max in our roths year and it probably won't grow much more than that anytime soon with daycare costs, a small amount into a 529 for my son, etc. I was just curious today what it would take since I said paying off the mortgage before I was 40 would be a cool goal to have. If it were like $250/mo I think I'd commit to it but $400/mo extra is probably out of our reach without some serious lifestyle changes. This is off-topic to the thread, but I'd put retirement before a 529 any day of the week. The oxygen mask scenario applies; get your own on before you help your kid.
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Jan 29, 2013 19:43
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jackyl posted:E: and I have no idea why the gently caress people started talking about health care and cars having to do with mortgages It was someone trying to say that paying off the mortgage only guarantees your shelter, whereas retirement savings are liquid once you reach retirement age and can provide other necessities (or luxuries if you rate health care as such). I'm torn on the risk aversion reasoning. Your retirement accounts are protected from bankruptcy, and your house isn't - there's a homestead exemption but it isn't guaranteed to cover the value of your home.
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Jan 31, 2013 04:36
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Comrade Flynn posted:Thanks! Yeah, no points on this. Congrats, looks really nice. Make sure you're up for the stairs. We just escaped from a tri-level townhouse (with a split lower-level) into a rambler in the exurbs.
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Apr 26, 2013 01:20
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Baronjutter posted:Enjoy your filthy house full of tons of cosmetic damage that was hiding behind the renter's gross furniture? Totally empty can be pretty weird; it's hard to get a sense of the size of rooms without any furniture. Getting rid of 2/3 of your crap and staging works well, though.
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May 10, 2013 00:23
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Orange_Lazarus posted:So what would happen if I paid an additional $12,000 (a years payment) on the mortgage this year? Would that mean I could live payment free for 12 months or would the monthly payment simply adjust and I would have to start paying that month to month? If you mark it as a payment to principal your regularly scheduled payment should stay the same, it'd just shorten the term of the loan. If you don't, they may decide it's a prepayment so you wouldn't owe for a while - but why in the hell would you do that?
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Jun 17, 2013 17:46
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CrazyLittle posted:Yeah, as much as I agree with "do never buy" even in your case, I think your parents should strongly consider "do never sell" as part of it. I don't think you can deffer income against the sale of a house. How much do they REALLY want to pay upwards of 35% on the cost of the house in income taxes? Home sale would be long-term capital gains, not income. First $500k of appreciation is exempt for a married couple if they lived there 2 of the last 5 years. Engineer Lenk fucked around with this message at 15:42 on Sep 11, 2013 |
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Sep 11, 2013 15:40
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Chin Strap posted:How small is too small for a mortgage? We are looking at places in the 70-80k range, and will be able to put at least 30k down. We'll actually be able to pay it completely off in the span of a year or so (80k is less than half our annual income and we have few other expenses). We don't want to wait another year and have it saved up in advance because of timing reasons. If you really want to do this you can always get a regular 80% LTV mortgage with no prepayment penalty and drop a huge payment towards principal straight off. You may want to reconsider this as a strategy, though, since interest rates are still historically cheap and you run a good chance of outperforming it with an index fund.
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Dec 11, 2013 15:28
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Orange_Lazarus posted:So my wife and I are going to go look at a town house tomorrow. The pictures on Zillow look good and it's basically what we want. A small 1b/1b that we could probably pay off completely in less than a year (for freedom) with a decent downpayment. The HOA is about $1404 a year so 1044 more than we already pay, for nothing. I wouldn't live in a townhouse again. Shared responsibilities for the roof/etc. with all my neighbors (some of whom were perpetually cash-strapped) meant that things got put off to the last minute and some of the maintenance didn't get done. With 5-10k in equity you should expect almost nothing after selling, just because of closing costs. In addition, a 1br/1ba sounds like a horrible idea for a couple that's considering children. You're basically downsizing into a starter home/retirement home. If you threw all the money that would have gone into paying off the townhouse into your current mortgage, you can easily get your equity level up enough so that you could sell, rent a tiny apartment for a while, decide if you wanted to do small city living or small country living and then go buy a townhouse or plot of land and a trailer.
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Feb 8, 2014 03:25
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Orange_Lazarus posted:I wasn't aware of the shared responsibilities. So if one neighbor's roof caves in wouldn't his insurance just cover it? Why would I be affected? Some condo/townhouse setups have master insurance policies for the roof/exterior (walls-out) that's held by the association. Walls-in policies are held by individual owners. So for example when one of my neighbors flooded her bathroom and it needed to be stripped to the studs to fix, the HOA insurance policy was involved as well as her individual policy. E: We actually moved from a (1300 sq foot) townhouse to a similarly-sized house with a much better layout (3 floor with split-level bottom floor to 1 story rambler). We were specifically looking for something without stairs, since that was a large barrier to using the space effectively. Engineer Lenk fucked around with this message at 03:54 on Feb 8, 2014 |
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Feb 8, 2014 03:50
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Orange_Lazarus posted:So you have to pay for some of that damage out of pocket or are you just saying that it affected your property value? Neither exactly. It counted as a claim against the master policy on the HOA insurance, though, which led to a premium increase and necessitated higher dues.
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Feb 8, 2014 04:36
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Jastiger posted:Its been for sale, I think for about 30 days. Its showing 39 on Zillow.com Unless something has radically changed about your situation and you can afford 20% down, don't buy right now.
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Jul 31, 2014 05:46
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Jastiger posted:Why not? This is what I remember of your situation: You're a single-income family of three with two adults and a toddler. That single income is base salary + commission, and the base salary is low. This job is fairly new (~1 year old or less), as is the area you moved to. You were living paycheck-to-paycheck less than six months ago. You and your wife aren't always on the same page about finances. These are my assumptions: You don't have a six-month emergency fund. You don't have 20% down. Rather than think about the best-case scenario (building equity!), you need to play defense for a while. Get your financial reserves up so that you're not a leaky roof away from insolvency.
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Jul 31, 2014 17:53
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Jastiger posted:They stuck to their guns and finally came down to $149K and offered 2.5k in closing costs, giving a net cost of $146.5k. Recall that rent is a cap and mortgage/escrow/insurance is a floor. For the increased risk you're taking you probably can't afford to buy a house just yet.
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Aug 8, 2014 22:39
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Spend another year renting, save 20% down. You'll be in a lot better position to buy a house then.
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Aug 25, 2014 22:26
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