325
votes
Accepted
My friend wants to put my name down for a house he's buying. What risks would I be taking?
That "something" you are signing means you are liable for the mortgage payments - yes, all of them - if he can't or won't pay at any point.
The limit on what the bank will lend him based on ...
- 24.4k
185
votes
My friend wants to put my name down for a house he's buying. What risks would I be taking?
What are the risks, if any
The risks are exemplified by the outcomes presented on this website, including:
What can I do when the co-signer hasn't paid anything on the house in 7 years and now ...
- 4,243
73
votes
Accepted
Could the loan officer deny me even if I have the money as a first time home buyer?
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 ...
- 42.9k
66
votes
Accepted
How does paying off the mortgage work if I demolish a home and rebuild another home on the property?
The existing mortgage is for that house on that land.
It's (almost certainly) an "owner-occupied" mortgage.
Thus, you'll have to talk to the bank. They'll want you to refinance the ...
- 50.8k
65
votes
Does paying a mortgage early mean you effectively paid a much higher interest rate?
I see your confusion:
You're looking at the interest as if it applied to the whole loan balance. That's not what actually happens--the interest rate remains the same but as you pay down the loan the ...
- 5,068
54
votes
My friend wants to put my name down for a house he's buying. What risks would I be taking?
Wrong way round. Transitional arrangements are non-binding guidelines that the lenders can observe if they choose to. The borrower - like your friend - doesn't get to choose whether to use them or ...
- 6,981
52
votes
How does paying off the mortgage work if I demolish a home and rebuild another home on the property?
A mortgage is a secured loan, like a car loan.
A secured loan has collateral - the thing of value that backs up the loan. When the collateral stops having value, the loan principal is immediately due ...
51
votes
Accepted
Does paying a mortgage early mean you effectively paid a much higher interest rate?
Your first sentence is written in a way that highlights a common misconception about how term loans work:
Most mortgages use an amortization schedule that have you pay more interest than principal ...
- 47.3k
50
votes
Accepted
Preapproved for mortgage loan but won't tell me interest rates
If you are truly preapproved (not just prequalified) then they are required to supply you with a Good Faith Estimate within 3 days. The interest rate will appear on that document. It's subject to ...
- 5,311
46
votes
Accepted
Should I pay loan balance down early even if I can't pay the whole thing off?
If your goal is to save money, then make payments (of whatever size) as early as possible and don't wait. There is no benefit in paying it in large chunks. Think of it this way: Your interest is a ...
- 53.3k
42
votes
Could the loan officer deny me even if I have the money as a first time home buyer?
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 ...
- 606
41
votes
Accepted
Can an unmarried couple buy a home together with only one person on the mortgage?
It is highly unlikely that this would be approved by a mortgage underwriter.
When the bank gives a loan with a security interest in a property (a lien), they are protected - if the borrower does ...
- 2,131
39
votes
My friend wants to put my name down for a house he's buying. What risks would I be taking?
You should only loan money to friends or relatives if you are fully accepting the possibility of never ever getting that money back.
And in this situation it can happen that you will be forced to ...
- 1,919
36
votes
Accepted
Preparing for a mortgage application in a year and a half
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 ...
- 78.5k
35
votes
Is it smarter financially to buy a starter home or go for the long-term goal?
I highly suggest you read other posts that discuss the math of home buying. There's a lot of information and shared experiences of the total cost of ownership.
I'd recommend buying the smallest home ...
34
votes
Rebuilding when current house has a mortgage
The main complication is that you're destroying the collateral for a loan that you owe almost $200k on. Builders can do this because they're including their profit margin in the equity on the new loan....
- 140k
28
votes
Is it smarter financially to buy a starter home or go for the long-term goal?
Assuming that both homes will appreciate in value at the same rate, and the real inflation-adjusted appreciation is non-negative, you will almost surely save money by buying the more expensive home ...
- 2,316
26
votes
Accepted
What is the best way to loan money to a family member until CD matures?
I will first look at your three scenarios:
I could gift her $37,000 and ask her to pay it back later. But that
exceeds gift limits and also seems “wrong” as it isn’t a gift.
The lender will notice ...
- 144k
23
votes
Do I need my own attorney during mortgage refinancing?
I've never used an attorney for a mortgage refinance before, and never wished I had either. There really isn't much more to a refinance of a mortgage than any other type of refinance (e.g. car, ...
- 47.3k
22
votes
Is it smarter financially to buy a starter home or go for the long-term goal?
"Where to live" has too much of an impact on your entire life to make this a decision based purely on maximizing the financial outcome, or similar.
If you truly expect you will be unsatisfied with ...
- 42.9k
21
votes
Preapproved for mortgage loan but won't tell me interest rates
This is definitely strange. I've had a number of occasions where I've contacted a bank and asked what their interest rates were on one type of loan or another, and they've always been very willing to ...
- 22.9k
19
votes
Can an unmarried couple buy a home together with only one person on the mortgage?
I will expand on Bacon's comment.
When you are married, and you acquire any kind of property, you automatically get a legal agreement. In most states that property is owned jointly and while there ...
- 78.5k
18
votes
Mortgage refinancing fees
tl;dr: I think you can find a much better deal.
Doing a strait refi will cost you some amount of money. However, a 2.5% fee ont top of closing costs seems really high. You can get a quote from ...
- 78.5k
18
votes
Does paying a mortgage early mean you effectively paid a much higher interest rate?
It is not so much that you are miscalculating, but that what you are calculating is not meaningful in the context you're trying to use it ("the annual rate of the loan"). You are essentially trying to ...
- 9,602
18
votes
Accepted
If I purchase a house through an installment sale, can I use it as collateral for a loan?
If the seller retains the title then you don't own the property and cannot collateralize it.
In the end it's up to the bank what would an acceptable collateral be.
- 181k
16
votes
My friend wants to put my name down for a house he's buying. What risks would I be taking?
Something else to consider, even if your friend is on the up and up and never misses a payment: Until the house is paid off, any time you apply for credit banks will count the mortgage payment on ...
16
votes
Where to keep savings for home loan deposit?
Start with you bank/credit union and see if they have any FDIC/NCUA insured products that have a higher interest rate. If their offerings don't get you any additional interest then you may have to ...
- 144k
15
votes
Buying a mortgaged house
Just as a renter doesn't care what the landlord's mortgage is, the buyer of a house shouldn't care what the seller paid, what the current mortgage is, or any other details of the seller's finances.
...
15
votes
Accepted
Credit advice in preparation for buying a house a year from now?
In my opinion you don't need to do much if anything differently. Keep on top of your payments and your credit score will improve over time (but is already quite good). If your cards have relatively ...
- 70.8k
14
votes
Why is proof of income requested for certain loans but not others?
Why don't you just put your down payment on one of your credit cards?
(Note: I'm not actually suggesting that you do this. Please read on.)
There are a few reasons why you wouldn't (or couldn't) do ...
- 116k
Only top scored, non community-wiki answers of a minimum length are eligible