101

If you are going to finance a used car, it is frequently best to arrange financing before you even pick out the car. The easiest way I recommend is to talk to a local credit union or two. They'll be able to tell you your interest rate and terms without having to talk to the dealer at all. Most likely, they'll be significantly better than the dealer at ...


93

They want to gauge the chance of a successful sale. There's nothing quite as frustrating when selling and moving to a new home as getting into escrow, doing all the paperwork, crossing off all the check lists, only to find out that your buyer didn't qualify for the loan and the mortgage fell through. By asking about your down payment (20% or more is often ...


42

CC debt is My Hair Is On Fire!! debt, because the interest rate is so high. So... yes, you should pay that off first (unless you like subsidizing my 1.5% Cash Back Rewards and "Fat Cat Bankers" while slowly impoverishing yourself).


24

It sounds like you're basing your understanding of your options regarding financing (and even if you need a car) on what the car salesman told you. It's important to remember that a car salesman will do anything and say anything to get you to buy a car. Saying something as simple as, "You have a low credit score, but we can still help you." can encourage ...


22

The typical home mortgage is amortized to give you a consistent payment amount through the duration of the loan. What you'll see is that each month a greater portion of your payment goes to principal rather than interest. When looking at loan calculators look for ones that show the full amortization schedule to get a good picture of how the variables ...


20

You're asking several related questions - about credit scores, how to use cash, and how to buy a vehicle. If we break them all down and start with what to do with your $5k in cash - it makes sense to use that to pay down credit card debt, since it's likely costing you an arm and a leg in interest right now. Even if you decide you need a vehicle badly, and ...


19

If the appraisal is less than the purchase price and the down payment is small, the bank might not approve the mortgage.


13

This is of course a perfectly normal thing to happen. People trade up to a bigger house every day. When you've found a bigger house you want to move to and a buyer for your existing one, you arrange 'closing dates' for both i.e. the date on which the sale actually happens. Usually you make them very close, either on the same day or with an overlap of a few ...


13

Keep in mind, this is a matter of preference, and the answers here are going to give you a look at the choices and the member's view on the positive/negative for each one. My opinion is to put 20% down (to avoid PMI) if the bank will lend you the full 80%. Then, buy the house, move in, and furnish it. Keep track of your spending for 2 years minimum. It's ...


12

There are far more questions to be addressed here than one answer can address. Let me work backwards, and start with the easy part - "I make $120K/yr, what can I afford?" You are making $10K/mo. A great income. A well written mortgage will allow you to use 28% for housing, that's the mortgage, property tax, insurance, and HOA. On $2800, let's take out $500 ...


11

If you have good credit, most banks should be comfortable giving you a loan that you can clearly afford for only 10% down. If you put less than 20% down, you'll almost certainly have to pay for PMI (Private Mortgage Insurance). This will be rolled into your regularly monthly payments. Once you've paid enough of your mortgage off that you have 20% equity, ...


10

I'm going to answer your questions out of order. Emergency fund: Depending on how conservative you are and how much insurance you have, you may want anywhere from 3-12 months of your expenses on hand. I like to keep 6 months worth liquid in a "high-yield" savings account. For your current expenses that would be $24k, but when this transaction completes, you ...


10

No your assumption is incorrect. Its kind of like a "whichever is lower" kind of answer. A lender will loan 80% on the appraised value or sales price whichever is lower. Although in most cases they match up as the same number but if they don't they will take the lower number and loan on that. However, if the appraisal was 5k lower I would go back and ...


10

Rollovers are different than Contributions. You can rollover any amount as often as you want in every year, as it is basically just a transfer to an equivalent ('already taxed retirement') account. They do not affect the contribution limits. Contributions to 401k ROTH are limited per calendar year, and it doesn't matter through which employer they are made....


10

Do not buy a car on credit. Ever. The fact that you have credit card debt makes it an even worse idea, but there are just so many reasons you should never buy a car on credit. For $5000 you can get a great, excellent-condition car. You could probably even get one for $3500-4000 and put the rest towards paying off the credit cards. I don’t want to put the ...


9

You're not clueless at all. You don't mention that you have any debt, but if you have consumer debt, you might want to consider accelerating your payments on those debts unless you're already doing so. You and your wife have a baby on the way. They're an absolute joy (we have a 7-year-old), but they're also a financial strain. If I were in your shoes ...


9

If you know that you have a reasonable credit history, and you know that your FICO score is in the 690-neighborhood, and the dealer tells you that you have no credit history, then you also know one of two things: Either the dealer is incompetent at finding credit ratings, and thus is incompetent at finding good loans for people like you, or The dealer is ...


9

The definite answer is "maybe." A bank can demand that you have all funds readily available X number of days prior to a closing. On the other hand, if you have steady income, and today's shortfall is minimal, a bank may ignore it, and trust that you'll appear at the closing with the proper funds. This is really a question for the bank. I'm sure members ...


9

Are there any advantages to layaway? There are two main advantages. First, when you pay the initial deposit the seller reserves the item for you at a given price. This is helpful with unique products, like a high-end custom-made watch. If there is only one of those watches in the entire world, then it's nice to know that the seller won't sell it to anyone ...


9

There are a few reason this is different than the sub-prime mortgage crisis, and why doing this can be profitable: Interest rates for these vehicles is commonly far, far higher than 'regular' car loans (think 10%+ vs 3%). That much of a rate differential wasn't really seen in mortgages in 2007, even 'NINJA' loans. The cost of the car itself can be easily ...


9

the house's appreciation, if any, is unlikely to keep pace with average market returns is ENTIRELY the wrong way to look at this. The house's value will appreciate (or depreciate) based on its entire value, no matter what the loan-to-value ratio of your mortgage is. An extra 5% downpayment is not an investment into real estate, it is a reduction in your ...


8

Banks worry that the large gift might be a loan that is ultimately expected to be repaid. If so, that affects the cash flow of the recipient, and makes it more difficult to make the mortgage payments to the bank. In some cases, of course, it is an informal loan: Dad advances a large $X to son to use as a downpayent, but does not charge interest and the ...


8

What you're looking at is something called "Bridge-Financing". Essentially, it allows you to borrow your down-payment from the bank, using your old home as collateral. The interest rate varies, but if you get the bridge from the same institution as your new mortgage, they will often be a bit flexible. You take possession of the new home, and begin ...


8

How can I determine whether it makes sense to reduce/eliminate 401K contributions for the next year and put that money towards the downpayment fund, then resume normal 401K contributions once the dust settles on the house purchase? You'll have to look at your marginal tax rate to assess how much the government will take for each dollar you decide to ...


8

One option is to drop the percentage deposited into the 401K to get the maximum match, and put the rest into the house fund. The amount that will accumulate for the down payment will not be as great, but it will not be as devastating to your retirement funding as a total halt. With each paycheck you decide not to contribute to the 401K, the money the company ...


8

Can you reduce your interest rate? Talk to the lender. Maybe. Probably not. The rate reflects their perception of how much of a risk they're taking with the loan. But if all you're borrowing is $2000, the savings that you might get out of any adjustment to the rate is not going to be all that significant. Sure, it would be nice, but it's not going to be ...


8

I somewhat agree to Alex B's post. I was a finance manager for 7 years both prime and sub-prime(special)(in other words bad). The parts he's 100% right on. Hit up you local credit union then your bank. Get your financing done first if you can. Now 690 credit score is one of 3 bureaus, not all banks and lending institutions use all three or the same ...


8

Absolutely. Your situation isn’t as common to a bank as a new purchase, but it’s also not uncommon. People die all the time leaving a house to more than one heir. If you go to a bank, they will likely treat it as a new purchase. No need to think about a HELOC and the variable rate it brings. You are buying it from your siblings. As long as you qualify for ...


8

Because, ultimately, the seller is likely going to have multiple offers for the house and will have to decide which to go with. In that situation, one of the most important weighing factors is: how likely is the seller going to manage to get to the finish line? Because there's actually a really long time between when an offer gets accepted and when the ...


8

A personal story, previously shared in an answer to another question: For the last house I sold, the buyer was doing a no-money-down mortgage and had no money for a down payment. He was even borrowing the closing costs. We accepted the offer, but when the bank did the appraisal, it was short of the purchase price. For most home sales, this would not be a ...


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