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74

It is normally a bad idea to cash in retirement accounts to buy a house, in your case it is a horrible idea because you are way behind on saving for retirement. Other fallacies in your reasoning: A house is not an investment, it is an expense. Paying rent is not throwing your money away. A cheaper house affects the resale value. That argument makes ...


73

A financial institution is not obligated to offer you a loan. They will only offer you a loan if they believe that they will make money off you. They use all the info available in order to determine if offering you a loan is profitable. In short, whether they offer you a loan, and the interest rate they charge for that loan, is based on a few things: How ...


70

You're making $100k together per year: you're not in the donut hole, you're in the top 25% of all households, and the top 10% of non-family households (as yours would be). To be blunt, you're not in the "rely on assistance" area: you're in the "save up for your downpayment" sector. My suggestion would be to figure out a way to save more than $200-$400 a ...


53

This is 100% routine and happens in almost every home sale. Whoever you're buying from probably owes a mortgage too! This gets handled during closing, and it's "behind the curtain". You/your finance company hands over a check for the full purchase price to the escrow agent, a neutral middleman who assures proper money flow. The escrow agent splits the ...


50

So you're making $150,000 per year and you have $245,000 in debts. You're in your late 30s and have $41,000, or less than 1/3 of a year's pay, put away for retirement. That's a bad situation, but not disastrous. Lots of people have recovered from far worse. But like the old joke goes, when you realize that you're deep in a hole, STOP DIGGING. The worst ...


48

IMHO you are in no position to buy a home. If it was me, I'd payoff the student loans, pay off the car, get those credit card balances to zero (and keep them there), and save up at least 10K (as an emergency fund) before even considering buying a home. Right now you have no wiggle room. A relatively minor issue with a purchased home can send you right ...


48

Rent. You have no idea whether you will still be in the same part of the country five years from now; you may not even be in the same country. A house is a boat anchor you really do not need or want at this time. It's also a set of obligations you may not want to take on yet. And buying is not automatically more financially advantageous than renting, when ...


48

A "seller concession" is a good solution for a buyer with no cash who wants things done on the house. You keep the sale price the same, and give them cash back at closing, which they use for the repairs. This solves the buyer's problem of having no cash and needing a way to fund the repairs, and it reduces risk for you, the seller, since you're not paying ...


47

As RonJohn points out, selling a house that still has an outstanding mortgage balance is very common. However, having a mortgage can make it harder to sell, one situation to consider is if the local real-estate market takes a dip after you buy. Say you put 5% down on a $150k house at 5% interest, in 3-years you decide to move, but the market value of the ...


45

Two reasons are typically cited (I've heard these from Dave Ramsey): Generally you get a little better rate on a 15-year loan than a 30-year loan, so equal rates at 15 and 30 years is (typically) a false comparison. It's less risk for a bank when there's a shorter term. If you've got these side-by-side, I'd suggest looking for a better lender for the 15-...


44

If I were you, I would rent. Wait to buy a home. Here is why: When you say that renting is equal in cost to a 30-year mortgage, you are failing to consider several aspects. See this recent answer for a list of things that need to be considered when comparing buying and renting. You have no down payment. Between the two of you, you have $14,000, but this ...


43

My credentials: I used to work on mortgages, about 5 years ago. I wasn't a loan officer (the salesman) or mortgage processor (the grunt who does the real work), but I reviewed their work fairly closely. So I'm not an absolute authority, but I have first-hand knowledge. Contrary to the accepted answer, yes the bank is obligated to offer you a loan - if you ...


38

The biggest red flag is the fact that your parents may lose their house. There are multiple parts of the decision. The first is pure math. Given your income, expenses, and savings, how much can you afford, and does that get you the living quarters you need? Economically does it make sense based on the local economy and housing prices to buy now in that ...


36

There is some element of truth to what your realtor said. The seller takes the house off the market after the offer is accepted but the contract is contingent upon, among other things, buyer securing the financing. A lower down payment can mean a higher chance of failing that. The buyer might be going through FHA, VA or other programs that have additional ...


35

Property ownership in the U.S. (or at least the places I'm familiar with in the U.S.) are public record. That includes tax assessment information which, necessarily, includes the value of the property. Contact your county assessor/recorder for more information. You could obfuscate ownership through the use of trusts.


35

If it was me, I would work on getting the collections debts cleaned up before anything else. When you get your tax refund checks, call them and offer them between .50 and .75 on the dollar. Write one check not make payment plans. Get it in writing that the debt is settled. Don't give them access to your checking account, and if you do use a CC, to pay ...


32

I understand $14k/yr $5.4M max This isn't the right way to say it. Your dad has a $5.4 million estate tax exclusion that can be used for gift tax. In addition to that (not instead or as part of), he and his wife each have a $14k/year gift tax exclusion. So if you aren't paying for two years from today, you actually have three years of gift tax exclusion: ...


31

I haven't heard 30-year mortgages called unwise. As @jared said, the shorter terms often will be cheaper if you are going to pay off within that term anyway, but the extra cost of the 30 may still be justified because it gives you the "safety net" of being able to fall back to the lower payment if money gets tight. Cheap insurance if you might need that ...


29

It's that 4th note which concerns me. It's the idea of committing to 30 years of debt. You're grossly over-thinking a problem that got solved the day after mortgages were invented. https://blogs.findlaw.com/law_and_life/2017/07/can-you-sell-a-home-if-you-still-owe-on-your-mortgage.html Most people sell their homes before the mortgage is paid. What ...


28

The common "rule of thumb" I have seen is that mortgage payments (including taxes and insurance) should not exceed more than 25-30% of your gross income. That is to leave room for income taxes, living expenses, etc. So 30% is definitely on the high range, and 40% would leave you house poor. I would also not count on "other investments" to make up the ...


25

Whatever you do, you need to be saving a lot more to have a good chance at retirement at a reasonable age. With a combined salary of $150,000, I'd recommend: contributing the maximum allowed amount to your 401k, $18,000/year each, contributing the maximum allowed to an IRA, $5,500/year each, and investing about that much again paying down your debts, and ...


25

Typically when you put in your first offer you'll sign an exclusivity agreement with the preparing agent that requires you to use them for a set length of time. Showings are kind of like an interview process for many realtors, if you like them you can stick with them, if not, feel free to date around. Some agents may push an exclusivity agreement earlier, ...


23

That seems a very bad offer, it borders on fraud. In the current US economy, you should be able to get between 3 and 4 % APR (and that number is what you should look at). That means that for $300,000 over 30 years, you'd pay $1,265 to $1,432 per month. If you are able to pay more than that monthly rate, you should go for less than 30 years - 20, 15, 10, ...


23

There is a mathematical way to determine the answer, if you know all the variables. (And that's a big if.) For example, suppose you rent for 4 years and the price of rent never increases. The total amount you will have paid is: 600*48 = 28,800. If you currently have money sitting in the bank earning only a negligible amount of interest, and you can ...


23

I'm from Germany as well and I tried to collect as much information as possible the last month. However, the subject is very complex and depends on a lot of factors. From what I heard so far (having friends working at big banks), it's typical to have a mortage lasting for 30+ Years. So I'm pretty sure you could afford the house with your current income, ...


22

The biggest factor is: Are you really going to invest the difference? It is easy to say you will now, but unless you have a ton of discipline or some form of automatic investing, that is a hard thing to do in practice. Another consideration is that the 30 year loan will usually cost you more over the life of the loan because of the length of it. Another ...


22

The simple answer is that you are correct. You should not purchase a house until you are financially stable enough to do so. A house is an asset that you must maintain, and it can be expensive to do so. Over the long term, you will generally save money by purchasing. However, in any given year you may spend much more money than a similar rental situation - ...


22

I am motivated to sell, should I agree to replace AC? There's no simple answer, home sale negotiation has a lot of variables. Here are some things I consider when deciding what I will/won't do to sell a house after receiving inspection objections: Time on market - If I blow up a deal, how long will I likely be waiting for another offer and how much will ...


21

If you even qualify for a no-down payment USDA loan, which I'm not sure you would. It would be extremely risky to take on a $250K house loan and have near-zero equity in the house for a good while. If property values drop at all you are going to be stuck in that house which likely has a pretty high monthly payment, insurance, taxes, HOA fees, maintenance ...


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