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Our buyer is a single woman with no children, and it didn't really strike me as odd. I have known several other women who have bought when none of my single male friends owned property. I think the boys were more interested in having roommates and a bachelor pad and the gals sought independence and financial stability. unrelated: it still hurts taking a bath on the sale, but we're all locked and loaded and close in less than two weeks. gently caress, we need to start packing.
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Dec 31, 2009 23:54
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Guys buy cars and poo poo when young and single. Girls don't. As guys age, more of them become not single. Hence, by buying at a later age, they're more often not single when buying. It's not hard to guess why that's the case, really.
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Jan 3, 2010 09:34
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Well, we're locked into taking the bath on the sale of our current house. All contingencies have been removed and we close in like 8 days. We just found out about some significant HOA violations on the house we are trying to buy (I guess the HOA doesn't like it when you don't pay their dues and then go and paint the house non-standard colors without approval, completely ignoring the documented procedures), and they are totally ignoring our repair list. We might find ourselves temporarily homeless in two weeks if the seller continues to jerk us around. Hooray!
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Jan 4, 2010 02:25
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Ultimate Mango posted:Well, we're locked into taking the bath on the sale of our current house. All contingencies have been removed and we close in like 8 days. On the plus side, you can try to find a house without an HOA. I know some people like them, but man do they sound like a money draining pain in the rear end.
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Jan 4, 2010 03:33
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Inept posted:On the plus side, you can try to find a house without an HOA. I know some people like them, but man do they sound like a money draining pain in the rear end. The HOA itself isn't bad in this case. Its only $75 per month, and it basically keeps the common areas kept looking nice and ensures nobody does something to ruin property values. However, the people who currently owning the house were flipping it. They didn't bother paying the dues or abiding by the rules. They painted the house a dramatically different color from everything else in the neighborhood to make it stand out, probably so it would sell faster. Now the HOA is pissed, and the seller will have to paint it again, and pay fines. The way we found out about this was in a single paragraph buried in hundreds of pages of paperwork. They were hoping we wouldn't find it and make them take care of the issue.
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Jan 4, 2010 17:46
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HOAs are run by whatever member of the HOA has the most free time and interest in being a busybody boss of their own tiny domain, controlling their neighbors and enjoying their little power trip. My wife and I rejected a number of reasonably good opportunities, because they required HOA membership. gently caress that noise. The government and local planning agencies already wield plenty of power and control, in terms of what you are and are not allowed to do (develop, paint, park, enjoy) on your own property, without signing an open-ended carte blanche to let a minority of your neighbors (whoever bothers to vote) boss you around. Think you might ever want one of these things? -A satellite dish -Something besides a well-manicured lawn... say, some native drought-resistant plants or wildflowers -A project car to work on in your driveway -Different-colored curtains -Three dogs -A fence instead of a hedge, or a hedge instead of a fence, or (god forbid) neither of these things -three cars -a motor home -Dry your laundry on a line outside, instead of using a dryer -have a party These are all things that HOAs have been known to ban or control. And you can't at all go by the current rules published by your HOA, because those rules are almost always amendable/changeable by the HOA members/board. Vindictive neighbors like to agitate and propose changes specifically targeting their enemies, and use their political maneuvers to get them passed. It's like loving Survivor or something, little cliques and cabals and retired bitter old people with too much time on their hands who think your son was the one that uprooted their petunias so they'll be damned if you'll be allowed to park that old Ford on the street any more... Ugh. HOAs were a great idea at some point, pooling resources for community projects, so you can have a pool or a common building or shared laundry facilities, but they've become a blight on the country and I wish the powers and restrictions HOAs were allowed to enforce were severely limited by law.
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Jan 6, 2010 00:21
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Leperflesh posted:HOAs are run by whatever member of the HOA has the most free time and interest in being a busybody boss of their own tiny domain, controlling their neighbors and enjoying their little power trip. You mean you don't want some fuckstick telling you where to place your indoor water softener, after paying an HOA documentation and filing fee for the privilege of asking? The one good thing out of the whole process for us is that the seller must rectify the situation so that we don't inherit any violations, liens, or grievances with the HOA before we move in.
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Jan 6, 2010 00:56
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My house I bought is assessed at 250ish, but retail value was 215, think I have any chance of an abatement for my taxes going through? Clearly, I've shown by buying the house at that price that the market value is no longer 250.
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Jan 6, 2010 01:22
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I'm pretty sure that the way a property is assessed for tax purposes varies from state to state, and possibly even from county to county. Without knowing those, I doubt anyone here can say for sure.
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Jan 6, 2010 02:00
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Happydayz posted:Basically single men account for 10% of all home buyers, yet for whatever reason single women account for 21% Also, I've talked to a lot of real estate agents over the past few years and it seems that ground floor 2BR/2BA condos are extremely popular with single female first-time buyers. I mean, they pulled out their stats graphs to show me the demographics of those that might be interested in my place. I was a single male, 23 when I bought my condo and of the women I know, none were even close to being able to afford even a condo. Three years later, I still don't know anyone except relatively affluent males or couples that are buying. Where's all the single ladies? Leperflesh posted:Ugh. HOAs were a great idea at some point, pooling resources for community projects, so you can have a pool or a common building or shared laundry facilities, but they've become a blight on the country and I wish the powers and restrictions HOAs were allowed to enforce were severely limited by law. The HOA I have has had only a couple of the usual problems with HOAs - nobody powertrips over anything and people are genuinely nice and try not to step on each other's toes. My issues are mostly financially based, which can affect any HOA though regardless of whether they're totalitarian or hippie commune in operational style. I'm pretty sure if the HOA had a bit more money and more than half the owners lived in their units it'd actually be quite pleasant.
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Jan 6, 2010 18:54
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It occurs to me that women live longer than men. I wonder how many of those "single" women homebuyers are elderly widows, perhaps moving from the house they lived in with their spouses, to smaller accommodations. I'd hope the statistics would differentiate, but I could see many of them showing up as single, first-time home buyers if their husbands were the ones who bought houses back in the 60s and 70s or whatever.
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Jan 6, 2010 19:02
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Are there are lenders left doing 0 down jumbo loans?
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Jan 6, 2010 19:23
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I don't think so. Not as a matter of course, anyway. It is possible to get a 0-down loan through the rural agricultural development program thing that has been mentioned in this thread previously, but only for buying rural property that qualifies, and those loans are insured/guaranteed by the government. FHA has a minimum 3.5% down loan program and as far as I know that's the lowest down you can otherwise get, regardless. I suppose if you had some exceptional circumstance (e.g., you're extremely rich) but for some reason needed a 0-down loan, there might be a bank willing to work with you, but it's hard to imagine a really wealthy person being unable to come up with a down payment.
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Jan 6, 2010 19:28
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Leperflesh posted:HOAs are run by whatever member of the HOA has the most free time and interest in being a busybody boss of their own tiny domain, controlling their neighbors and enjoying their little power trip. I agree, I would *never* own a property in an HOA again. I might rent one, but I would never own, ever. Never. I hate them with all the passion I can muster for truly petty tyrants. "They have to repaint their houses!" "But... they colors are approved colors right?..." "Yes, but they didn't get approval!" "But... the colors are fine, so they have to get approval and REPAINT IN THE SAME COLORS?" "Yes!!!  "... actual hoa board meeting conversation from a development I used to own in. Enjoy!(Not to mention that if they feel like it, they can get a lein and forclose and auction off your property for something as miniscule as $100 in owed fees to them, which they can impose without any sort of warning for basically anything they want to; totally legal and legit, if you don't believe me you have some reading to do!) Unormal fucked around with this message at 20:13 on Jan 6, 2010 |
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Jan 6, 2010 20:10
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Leperflesh posted:I don't think so. Not as a matter of course, anyway. It is possible to get a 0-down loan through the rural agricultural development program thing that has been mentioned in this thread previously, but only for buying rural property that qualifies, and those loans are insured/guaranteed by the government. FHA has a minimum 3.5% down loan program and as far as I know that's the lowest down you can otherwise get, regardless. NACA does 0% down loans (with no PMI as well), but their loan limits are about 50% of FHA, and they are anything but quick.
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Jan 6, 2010 23:20
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Unormal posted:I agree, I would *never* own a property in an HOA again. I might rent one, but I would never own, ever. Never. I hate them with all the passion I can muster for truly petty tyrants. "They have to repaint their houses!" "But... they colors are approved colors right?..." "Yes, but they didn't get approval!" "But... the colors are fine, so they have to get approval and REPAINT IN THE SAME COLORS?" "Yes!!! Oh I believe it. We have demanded that the seller produce a written letter from the HOA stating that there are no outstanding violations, fines, or liens, before we move forward any further. The seller ignored the HOA for quite a while, and now it seems the HOA is ignoring the seller's requests. Given that there aren't any homes where I am looking that are HOA free, I'll just be glad that I won't move into a bad situation, and know to follow the 'rules'
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Jan 7, 2010 00:02
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You'd think the HOA would be prompt in responding to their requests since they're leaving. "Later! Don't let the door hit you in the rear end!"
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Jan 7, 2010 02:37
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Leperflesh posted:I'm pretty sure that the way a property is assessed for tax purposes varies from state to state, and possibly even from county to county. Without knowing those, I doubt anyone here can say for sure. Barnstable County in MA. I guess its silly of me to ask, the worst they can say is no your abatement is denied, not like they'll assess me at any higher than I am now.
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Jan 7, 2010 02:58
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Realjones posted:NACA does 0% down loans (with no PMI as well), but their loan limits are about 50% of FHA, and they are anything but quick. Hmm. I had never heard of these guys before but I gotta say, this web page does not inspire confidence. Especially Step 5, it reads exactly like a MLM or cult or something. You have to commit to start doing your volunteer work before Step 7, which is the initial Qualification; that's crazy. Any other bank performs a mortgage qualification for free and without commitment. There are some more warning signs. Look at Step 11: "You need to hire a NACA approved home inspector to inspect the property and provide you with a written report containing valuable information such as necessary or future repairs, utilities and energy efficiency. ... If repairs are needed, they must either be made by the seller or from funds provided by the seller, buyer, government entities, or financed as part of the mortgage. " So, you cannot decide to accept a condition problem and fix it later? Yeah, despite their apparent status as a "HUD Certified counseling agency" this deal seems a bit too, uh, 'religious' for my tastes. Maybe someone would be better off saving up 3.5% for an FHA down payment and going with that...
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Jan 7, 2010 20:08
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I think I posted on NACA earlier in this thread but I'll cover it again. Its a lot of work to get a loan through them, but its really worth it.Leperflesh posted:Hmm. I had never heard of these guys before but I gotta say, this web page does not inspire confidence. Especially Step 5, it reads exactly like a MLM or cult or something. You have to commit to start doing your volunteer work before Step 7, which is the initial Qualification; that's crazy. Any other bank performs a mortgage qualification for free and without commitment. You don't have to do any volunteer work for NACA before you get a loan. There is nothing in your loan documents that is contingent on you volunteering to NACA 5 times per year. You sign a "commitment" promise that is completely non-binding. I talked with the NACA lawyer at close and he said its not mandatory legally speaking. I also talked with a few friends who had NACA loans and they said they hadn't actually done anything and no one had ever contacted them (Atlanta area, YMMV). The volunteering is pretty much helping out at a 4 hour meeting or a day in their office, and you can fulfill one by having a NACA yard sign. Leperflesh posted:There are some more warning signs. Look at Step 11: "You need to hire a NACA approved home inspector to inspect the property and provide you with a written report containing valuable information such as necessary or future repairs, utilities and energy efficiency. ... If repairs are needed, they must either be made by the seller or from funds provided by the seller, buyer, government entities, or financed as part of the mortgage. " You must hire a home inspector that has been approved by NACA. They don't work for NACA, they just have done the step of sending in their insurance paperwork and business docs to show they are a real home inspector. If you have your own, they can send in some paperwork and be "NACA APPROVED!". Same for real estate agents and contractors. On the second part, certain things cannot be accepted and fixed later. An inspection report is sent to NACA and anything they deem necessary will have to be A) fixed by the seller B) financed by you and contracted out to be fixed post closing. You will have to get a quote for the work before you close and the quote will have to be approved by their rehab department. For little poo poo like GFCI outlets and other things people can fix themselves the inspector will typically put that in their report to you but not tell NACA because they know whats up. I ended up financing $13K into my mortgage to fix up the house I was purchasing. NACA made me contract out drywalling off the water heater/furnace from the rest of the garage, repair some vinyl siding, garage door openers, repair chimney flue, fix slow drains, new water heater, new AC/Furnace. I also got to finance in "optional" things like all new kitchen appliances and carpet in the bedrooms. This doubled the amount of work I put into buying the house and is a whole other post. Leperflesh posted:Yeah, despite their apparent status as a "HUD Certified counseling agency" this deal seems a bit too, uh, 'religious' for my tastes. Maybe someone would be better off saving up 3.5% for an FHA down payment and going with that... This I agree with. They are rabid about bad lending practices. They blame the recent bust 100% on banks tricking people into bad loans and 0% on personal accountability. They frequently close their offices to fly their entire workforce to picket bank CEOs houses. The 4 hour intro meeting you go to is at least 3 hours of the history of NACA making GBS threads on banks. THE GOOD NEWS: I financed a $110K HOME + 13K in repairs. No closing costs means the seller concessions of $6K went to buy down the interest rate which got the 4.5% rate down to 3.0%, fixed, 30 years, with 0% down. I was about $2000 out of pocket on the entire deal, which went for the pre-buy/post-renovation inspector, filling insurance/tax escrow accounts, and title insurance. THE BAD NEWS: $50/mo NACA membership fee built into my house payment. Cheaper than PMI + higher interest rate. I think I can officially cancel that after 5 years, but as I haven't really jumped on volunteering I think its the least I can do. Adding another middle man to an already retarded home buying process makes for a really painful buying experience. I found my house in mid-March and closed at the end of May which I guess isn't terrible for a short sale. The house must be owner occupied and there is a lien on my title that says this. I can rent out my basement but I may not move somewhere else and rent the property without refinancing my loan. This is to keep people from using NACA to buy rental property. Banks hate NACA. The bank handling the short sale of this house canceled the deal three times, once the day before closing. NACA has a well deserved reputation for taking forever. I think they say give at least 60 days from bid to closing to get all your stuff done, and lots of folks don't like that. I think financing the home I wanted plus most of what I needed to make it livable at 3%/30years fixed at practically no out of pocket cost to me was worth 2 months of excruciating anxiety. Its $60,000 over the life of the loan and $160/mo difference over a 5.25% loan, and that's just the mortgage payment. And their rates are currently 4.65%, -.25% for every point paid (Use seller's concessions for this, because you won't need them for closing costs that don't exist). Edit: If anyone has any questions about getting started doing this feel free to send me a PM and I'll try and answer anything. Arzakon fucked around with this message at 21:04 on Jan 7, 2010 |
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Jan 7, 2010 20:59
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I went to the first intake meeting for NACA and I guess they are ok, but they REALLY slow and won't due anything unless you constantly hound them. The counselors are really overworked and the lady I was with was very nice and I had all my stuff set and she said she'd send it on in a few weeks and then I'd be "NACA qualified" and ready to go. It was no surprise the lady never got back to me and I didn't bother hounding her since I wanted to wait and see what happened with the housing credit. The thing I didn't like about the program is this: let's say your max mortgage payment is $1400. You can't get a loan for place with a payment of $1500, but you can get a NACA mortgage for a three unit building with a $3000 mortgage and rent out the other two units (you have to live in the third). It makes no sense. They won't let you make ANY down payment, even if you want to. Any seller assistance has to be used to buy down the interest rate. A nice feature no doubt, but it does line NACA's coffers. The secondary lien is pretty lame as well. Also I believe it was $30 in membership dues that you have to pay before your first meeting, whether you ever get qualified or lot. I bet a substantial amount of their income is from people paying those $30 dues. The NACA office I went to had sold 300 homes in the last year. There were 400 people at the meeting I went to alone (and they have a meeting every week basically), so even if only 20% ever meet with a counselor...that's a lot of money. I would imagine that getting a seller to accept a NACA mortgage would be even harder than an FHA mortgage. It is a great deal once you get through all the hoops though.
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Jan 8, 2010 02:12
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Realjones posted:I went to the first intake meeting for NACA and I guess they are ok, but they REALLY slow and won't due anything unless you constantly hound them. Dependent on the counselor but serious hound the hell out of them if your paperwork is ready there is no reason she can't click the "submit" button on her computer. Realjones posted:
The loan max they let you have is whatever gets you to 35% debt to income ratio which is generous. No idea on that 2 unit stuff that seems really weird. How single family homes work is that you have a payment to meet that includes the house payment, taxes, insurance, and the $50/mo NACA membership. When you get approved you will get something that says "You are approved for $150K at *current rate, 4.625%*". Now that means you can go find a home that is $175K and have the rate bought down by a point by the seller and it will get approved because the payment is the same. Or, as happened to friends of mine, you can find a house inside the city for the amount you are qualified for with an additional $3600 in taxes per year than outside city limits which is what the estimates lean towards. Then you walk away because throwing away another $300/mo to the city is retarded. (Atlanta city limits is a very small area and if you are inside them you pay ~4% instead of ~1-1.3% for everywhere else). It doesn't help if the $155K home you are buying sold last for $450K and is still tax assessed in the $350s. Realjones posted:They won't let you make ANY down payment, even if you want to. Any seller assistance has to be used to buy down the interest rate. A nice feature no doubt, but it does line NACA's coffers. The secondary lien is pretty lame as well. Whoever told you this is wrong on the down payment part. It was a key part of my post pre-approval meeting on you can either put a down payment on the house or buy down the interest rate to get into your approved monthly payment range. Sellers money does have to go to the interest rate buydown, or you can just go to the seller and say "lower your price by the amount of concession" instead. Realjones posted:Also I believe it was $30 in membership dues that you have to pay before your first meeting, whether you ever get qualified or lot. I bet a substantial amount of their income is from people paying those $30 dues. The NACA office I went to had sold 300 homes in the last year. There were 400 people at the meeting I went to alone (and they have a meeting every week basically), so even if only 20% ever meet with a counselor...that's a lot of money. NACA is a non-profit organization so they aren't really out for your :20bux:. The first thing I was asked was if I had a bankruptcy and if so save your money and don't pay for the credit report or membership fee. The counselors so get paid pretty well but are completely commission based off of number of sales they close. Its really odd how lazy some of them are when I learned this. Luckily there is nothing to up-sell you on when everyone gets the exact same terms. As to the 400 people that is just at the initial meeting which costs nothing and is informational. A lot get disqualified due to bad credit/bankruptcies within 3 years. I would bet at least 80% shouldn't be buying a house in the first place and couldn't get the required $34000 in savings to even get to the pre-approval stage. They will work with you if you have marginal credit but that involves budgeting and proving to your counselor you are worthy. Lots of hoops. I wouldn't doubt a NACA bid could get given lower priority to others because it can take a while especially if there are repairs. The chances of a NACA loan falling though once accepted are pretty slim, and their underwriters are pretty quick. Pre-approval by NACA is just as easy as a FHA loan. If your counselor says you are good you are good. If you have good credit and the loan passes the debt-to-income ratio check you are fine.
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Jan 8, 2010 02:44
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Although I can qualify for financing on my own, I've been having difficulties getting an offer accepted on a home (generally offering 20% down with conventional financing). The market in my area is flooded with investors buying up homes with cash in my price range and reselling them for far more with a fresh paint of coat and new carpet. Recently, my aunt has offered to help buy a home by offering cash and then having me take out a mortgage on the home so I can pay it off on my own. So, how does this work if I buy a home with my aunt's cash? Say I'm buying a $200,000 home and I pay $40,000 and she pays the remaining $160,000. Can the home go in my name alone, or would there be tax issues with that? Or can the home go in both of our names, with her essentially selling me the 80% of the home she paid for 90 days after closing? And how to I go about proving that I (my aunt) has the cash available for purchasing a home? Would it be easier to have my aunt purchase the home outright in cash and then have her turn around and sell it to me 90 days later (is there any reason it couldn't be less if I'm using conventional financing?)? And would any particular manner of buying a home with my aunt's assistance disqualify me from the first time home buyer credit? I really wanted to go out and buy a home on my own and I will end up paying for every cent of the home either way. Apparently this isn't any financial burden for my aunt, so I don't see the harm in exploring my options.
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Jan 8, 2010 06:38
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There's no reason why you and your aunt can't go out and buy a home together. You can decide how you want to take the title (e.g., whose name goes on it), and the seller doesn't give a crap where the cash comes from; the only ones who care about that are the mortgage companies (e.g., banks), and the FHA or other parties providing insurance. Since you're paying cash, there is no mortgage and you don't need mortgage insurance so you're golden. The main concern for you and your aunt is the tax consequences. If her money is considered a 'gift' to you, in that large amount, there could be a tax consequence. You need to consult with a CPA. After the sale, you and your aunt can enter into a formal contract between the two of you in which you pay her back, and that's fine. If you want a mortgage, though, you'll then have to deal with a mortgage company, and they'll care about things like where the money comes from, what the actual value of the home is, etc. etc. If your aunt is expecting to get her money back in a few months by you opening a mortgage on the house and giving that money to her, then you're engaging in a more complex contract/transaction and bringing in the third party and now things get complicated. I think it should be possible to do but you should be aware that you probably can't get, in writing, a contractual agreement from a bank guaranteeing they'll give you the mortgage until you actually apply for it. So, you and your aunt should be prepared for a circumstance whereby you for whatever reason cannot qualify for a mortgage and she therefore cannot sell the house to you. If the two of you can come to an agreement about what to do in that worst-case scenario, then I'd say go for it. It might be worth getting pre-qualified for the amount you'd owe ahead of time, just to reassure yourselves that you are more likely to be able to get the mortgage, but a pre-qualification is never a guarantee. Edit: I should add that I feel your frustration. I made an offer on a house ($236k) that was subsequently sold for $210 to an all-cash investor. That said, I wound up getting the second house I bid on, even though my agent warned us that we might have to make 6 to 10 bids in this market. You might find that patience and perseverance will eventually put you in a position where your higher offer is more attractive to a given seller, or, you manage to bid on a house and not face competing cash bids. If these investors are flipping houses and getting a profit from it, then that means that basically they're paying less than market value for those houses; so if you pay market value (e.g., outbid them substantially) you should still be getting the house for a reasonably good, market price. It smarts, but that might be the best solution, rather than take the risk that you wind up being unable to get a mortgage to pay back your aunt (e.g., she winds up stuck with your house). Or I guess if that happens you and your aunt could slap on a coat of paint and flip the house yourselves... Leperflesh fucked around with this message at 20:16 on Jan 8, 2010 |
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Jan 8, 2010 20:07
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Not sure if this is the right place to ask this, or if the question has been answered (I know it's not in the OPs, but I don't yet have time to skim all 26 pages). I recently bought a Co-op, and have started mortgage payments. I've been told/urged by family/friends to change my payment plan from once a month to twice a month, which will supposedly save a lot on interest. Can anyone here explain to me why it is that paying more frequently makes a big difference? I have a 30 year fixed mortgage.
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Jan 10, 2010 20:07
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People apparently have these ideas that changing your payment schedule can make magic happen, but it all boils down to this: pay more towards principal, and you'll pay less in interest over time. 26 biweekly payments is an entire extra month's payment each year compared to 12 monthly payments. But you can get the exact same effect by just paying a little more towards principal each month. That's probably easier, since most banks seem to be set up for it these days. Edit: See if you can pay enough extra principal each month to get it paid off in 15 years. If you didn't stretch when you bought the place, you might be able to swing it, and that would cut your total interest payments more or less in half. Play with this: http://www.mtgprofessor.com/Calculators/Calculator2a.html slap me silly fucked around with this message at 20:13 on Jan 10, 2010 |
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Jan 10, 2010 20:10
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slap me silly posted:People apparently have these ideas that changing your payment schedule can make magic happen, but it all boils down to this: pay more towards principal, and you'll pay less in interest over time. 26 biweekly payments is an entire extra month's payment each year compared to 12 monthly payments. But you can get the exact same effect by just paying a little more towards principal each month. That's probably easier, since most banks seem to be set up for it these days. Okayyy that makes sense. I am actually already doing this then, sweet. My monthly payment is approximately $1200/month, and so far I've been paying an extra $200 in principal each month, which comes out to an extra 2 months payment a year.
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Jan 10, 2010 22:55
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Biweekly payments actually accellerates repayment of principal even beyond the fact that you're making 26 payments instead of 24/2 payments; and that's because of timing. Say you'd normally make your next payment on Feb. 1st. If you instead make a payment on Jan. 15th, you'll be paying the accumulated interest from Jan. 1st through Jan 15th, plus some amount of principal above that accumulated interest. Since you've now paid a bit of the principal (albeit a very small amount, especially early on in a mortgage), when you make your Feb. 1st payment, the total principal - and thus, interest accrued - in that second 2-week segment is just slightly less than it would have been. This is because the interest is a percentage of what you still owe on the loan - principal PLUS accrued interest. The interest gets compounded while you wait! By making more frequent payments, you're paying that accrued interest off before it 'has a chance' to compound as much. The difference is not very big, though. I checked out both methods using this calculator: On the 24-payments-per-year plan, your total payments add up to $463,603.40. On the 12-payments-per-year plan, your total payments add up to $463,813.20 Woohoo! You saved a little over $200 for your trouble! Now, making 26 payments makes a much bigger difference. If you make 26 payments, each of which is half of your basic monthly payment (so you're actually paying extra each year); you pay $644.21 every 2 weeks, you pay off your mortgage in 656 payments (25 and a quarter years!), and your total payments add up to $422,601.76. So over the life of the loan, you actually save $41,211.44. That's pretty substantial and well worth it... assuming you pay off the entire loan. The extra payments start to make a big difference after a few years, when you've made more headway into the principal than you would have otherwise. If you're only in the home for 3 or 4 years and then you resell it, the difference isn't that big. If you can afford it, it might still be worth it to you, but the biggest difference is well down the road. If you're going to retire in the house you just bought, it's a huge and very significant bonus. It's not really the 26-payments thing that does it, mind you; it's the more basic idea of making extra payments. You could also just make a 13th payment each year - some people who always get Christmas bonuses like to just put their bonus in as an extra payment - and it works out about the same. Or you could just add a hundred dollars to every payment each month. Do it consistently for years, and you save tens of thousands of dollars (and possibly several years) on the total cost of your loan. Leperflesh fucked around with this message at 17:44 on Jan 11, 2010 |
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Jan 11, 2010 09:41
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Leperflesh posted:principle The word is PRINCIPAL.
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Jan 11, 2010 15:22
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Furthermore, whether it works out the way you describe depends on when and how the bank credits your payments. For instance, I made an extra payment on November 12 but my bank calculated the December interest as though it had been deposited Nov 1. I'm guessing if I had deposited it after the 15th, they would have credited it to December instead. It is far easier for me to add a regular amount each month, and then write an occasional extra check if I feel so inclined, than to mess with a non-monthly schedule.
slap me silly fucked around with this message at 16:07 on Jan 11, 2010 |
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Jan 11, 2010 16:04
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My wife and I are looking at a house in a neighborhood and it is being sold after some reason of non-payment (Current owner is Federal Home Loan Mortgage corp/Sheriff xfer) Sold in 1986 for 45,000, 1991 for 74,000, 2000 for 105,000 before being transferred over. The house needs to be inspected of course, and I know that from photos online of the house it definitely needs interior paint. The house is being sold for 57,000, but it is being taxed at 3,061.70 (Paid in halves). I was wondering if anyone knows how sale value would affect the tax. Would it lower the tax? According to the county auditors website: Market value for land is 26,800/ house 85,800 = 112,600 total. While the assessed value is 9380/30,030 = 39,410 I guess I'm having trouble figuring out if its being taxed at market or assessed value.
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Jan 11, 2010 17:13
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ufsteph posted:The word is PRINCIPAL. Ugghhh. You know, it looked wrong, but when I wrote 'principal' that started looking wrong too. Thanks, I'll fix it. El Mariachi, nobody can tell until you find out what the tax rate is; that is, what percentage of value of the house is owed as property tax each year. You should be able to find that number from your city or county's website, or failing that, by calling them. Leperflesh fucked around with this message at 17:47 on Jan 11, 2010 |
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Jan 11, 2010 17:43
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Sorry. The auditor's website listed a bunch of numbers I didn't understand, but I googled the tax rate for the city and it came up at 2.49, and the result of that is close to the taxes listed- when using the market value of house. The site also specified that it was determined by market value.
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Jan 11, 2010 19:20
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Leperflesh posted:
It sounds like really the most important thing in this sense is just making extra payments towards the principal by whatever means possible. The place I bought is a 2 bedroom Co-op in NYC, and while I don't expect to stay here the rest of my life, I could easily see living here the next 5-10 years, and opting to try and rent it out when I want to move on (my Co-op has awesome rules). The way I've seen it, dumping money into the principal now is still worthwhile, because if I sell the place in 7 years, assuming I sell it for what I paid, or even one penny more than that, all the money that I've put into principal will come right back to me. Am I right in thinking this way?
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Jan 11, 2010 19:28
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principal
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To update on my situation, in case anybody comes upon a similar situation in the future or if anybody has already done something like this and would like to advise me further: I've decided that the easiest way for me to use my aunt and uncle's cash to buy a house with the goal of refinancing is to make my aunt and uncle the lien holder and have them hold the title. My uncle's actually an accountant and I spoke to him about this and he's willing to give me this private mortgage for up to 5 years (although I could obviously refinance with a bank sooner). Doing things this way avoids issues with gift tax and such. I would pay interest on the loan from him and he would have to pay tax on the interest (which is money he's making off me anyway). A contract making them the lien holders would also allow me to bypass the six month seasoning requirement the bank has to allow me to refinancing. If I did pay in cash and hold the title myself, not only would I have to wait six months, but the loan from the bank would be a "cash-out" loan which would have more restrictions on how much money they would give me in terms of how much equity I have in the home. The complication I have now is this: How do I go about making an offer using my uncle's money? This purchase will have no contingencies (my uncle is not concerned about an appraisal), so it would be like most cash offers. The hitch is that it is still more or less "financed". Would I send the listing agent an offer with my name all over the contract calling this a "cash" offer and providing a statement from my uncle and his bank of proof of funds and that the money is immediately available for this use? Or would I write up a contract stating that this purchase is being financed but is not actually contingent on anything at all? I'll be contacting a local title company's lawyers and my real estate agent to figure out if anybody has any idea what we should do. Also, I happened to come across a foreclosed home that went on the market for a few hours and then came right off. We visited it today and then asked the listing agent if we could submit a cash offer to the bank (while it's off the market and no one else will!), and he said to send over the offer and he would give it to the asset manager. So, I might be able to get a good deal on a house without competing with multiple offers as I have on the other NINE CONTRACTS I've submitted. (When I say multiple offers.. I mean anywhere from 5 to 30+, no exaggeration. The Northern Virginia market is a poo poo hole for first time home buyers looking for homes around $200,000)
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Jan 11, 2010 19:32
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senor punk posted:It sounds like really the most important thing in this sense is just making extra payments towards the principal by whatever means possible. Possibly. You must keep in mind that the value will change over time. If it drops, it will eat into your principal. If it drops enough, you could lose everything you put into the home, and then some! On the other hand, if it rises, than you'll effectively gain free value. And if the value remains flat, you'll be paying less interest over that 7 year period than you would otherwise. You need to compare the value of making larger payments on your property, to what else you could do with that money (the opportunity cost). If, for example, you get 4% on that extra investment (in lower interest paid), but you could have gotten 6% with some other investment, then it wasn't worth it. There are other kinds of opportunity cost too; maybe you would have used that money to go on a big vacation to europe, or to buy a car? The value of those things can only be assessed by you. Another thing to keep in mind is liquidity. Money you put into your house is less liquid (because selling a house takes a long time and is costly) compared to other investments. Even if you make a percent or two more by making higher payments, vs. some other investment, if there is a possibility that you might need that money for something else in a year or two, a more liquid investment might make more sense for you. (Of course, it is possible to access the equity in your home by taking out a home equity loan... but you'll pay interest for the privilege.) I refer you to the long-term investing thread. Figuring out the best way to invest your money for long-term gain is not always straightforward.
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Jan 11, 2010 19:39
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How do cosigners for mortgages work? I'm currently living in a lovely but paid off condo townhouse. This is in Ontario  . I can't stand having neighbours and they can't stand me. As such I want to buy a single home. Not to mention the 600$ I pay every month in condo fees is just stupid. The townhouse is owned by a corporation under my dads control and is worth 200k on a good day. But is in a relatively lovely neighbourhood ( low income rentals across the street) so will be hard to sell + capital gain taxes are a bitch. For this reason I don't want to liquidate, i'd rather rent it out and have it pay the condo fee + a couple bucks for maintenance. With it being winter and a recession housing prices are reasonable, I can get a VERY nice house for 300k or so. Thing is, i'm in my very early 20's and have little to no credit. Even a couple blemishes over a cellphone bill fiasco with Bell Canada. I make a good wage, about 2100$ bi weekly after taxes. Have no bills whatsoever or obligations beyond paying for university ( 5k a year). I know I won't be approved for a mortgage, so I asked my dad if he would be willing to cosign for me and help me with my downpayment. He said yes but told me to do my homework on the feasibility of me actually getting the loan with his signature. He has perfect credit, a 6 figure salary and 7 figure net worth. With 2 other mortgages under his belt totally at about 500k owed with about the same paid. I was under the understanding that a cosigner meant only their credit is really considered. But i've heard different. Also whats the deal with this new HST tax? Is the rebate worth pursuing or should I just buy before it comes into effect?
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Jan 11, 2010 21:56
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belle of my ballz posted:
Although I don't have an answer I would like to know how you make $2100 biweekly after taxes while in University?
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Jan 12, 2010 04:48
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belle of my ballz posted:With it being winter and a recession housing prices are reasonable, I can get a VERY nice house for 300k or so. Why do you want to purchase a home that costs 5.5x your gross annual income? Why do you want to buy period? If you're 21-22, tying yourself to multiple properties will make it difficult to be mobile if you ever want to go somewhere else.
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Jan 12, 2010 05:01
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Ophelia's Ashes posted:Although I don't have an answer I would like to know how you make $2100 biweekly after taxes while in University? IT business analyst mainly for banks I work for a small but lucrative firm. My coworkers that have graduated bill on average 1000$ a day for the same services I now do for a fraction of that. I also work 9-12 hour days on average. Including travel to sometimes dangerous places.
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Jan 12, 2010 05:36
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