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67 votes

Math Behind Buying a House

Compared to the other answers, I feel like I'm taking crazy pills, because: Is my following calculation correct? Sorry to be the bearer of bad news, but no, this is not correct. In 3 years, if ...
  • 46.4k
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 ...
  • 49k
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 ...
34 votes

Does this sound like a great idea regarding being a landlord and starting a real estate empire?

The idea you present is not uncommon, many have tried it before. It would be a great step to find landlords in your area and talk to them about lessons learned. It might cost you a lunch or cup of ...
  • 75k
30 votes

Best ways to invest for a planned house purchase in 1 year?

The standard answer is that if you need the money soon (less than three or so years), you should not be putting it in risky investments and just park the money in your savings account or similar "safe"...
  • 2,097
30 votes
Accepted

Should I buy a nicer house in a worse area for less than I budgeted?

Welcome to Money.SE. You know, questions like this can help point out good/bad for a given choice, but there isn't likely to be a 'right' answer. I can offer a well reasoned answer, only to find ...
28 votes

Math Behind Buying a House

There are other things you need to account for in your math: Property Taxes Home Insurance Utilities Maintenance Neighborhood dues (maybe) Yes you build up equity in the house, but you still pay ...
  • 117k
26 votes

Offered money to buy a house, seller is asking for more to cover gap between their listing and mortgage owed

It is certainly legal to ask you, but you are of course not required to 'donate' another 4000 - that is your choice. If the deal falls through because of these 4000, it is the seller's fault, and you ...
  • 37.1k
25 votes

Wired to the wrong account

You will have to pay for an attorney. Initiate a SWIFT recall. You've already tried the easy thing - simply asking for it back, and that didn't work. They likely don't have a legal right to keep the ...
  • 4,069
22 votes

Does this sound like a great idea regarding being a landlord and starting a real estate empire?

A lot of people do this. For example, in my area nice townhouses go for about $400K, so if you have $80,000 you can buy one and rent it. Here are the typical numbers: Monthly Payment 30-year loan at ...
  • 9,342
19 votes

If a home has increased in value, why would an essential component of the home depreciate?

Insurance companies pay for the cost of unexpected events not for the cost to maintain your house. Without any unexpected events, you need to replace your roof about every 20 years and insurance won't ...
  • 7,383
18 votes
Accepted

Buying a house. I have the cash for the whole thing. Should I still get a mortgage to get the homeowner tax break?

Not for the tax break, no; as others have said that still costs you money. However, with rates being low right now and brought a bit lower by the tax break, this is an opportunity for the safest form ...
  • 32k
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

Should I buy a nicer house in a worse area for less than I budgeted?

Leading up to the last big housing dip, many people borrowed near their limit planning on increased home values to provide them with equity, many of them were stuck in a bad spot when home values ...
  • 66k
14 votes

Best ways to invest for a planned house purchase in 1 year?

There are no safe one-year investments that pay a high rate of return. If they existed, then everybody would be putting all their money into them. If you want to be confident that the money will ...
  • 9,046
14 votes

Why would a bank not "buy a house for me" if they own the house until I've paid it anyway?

Simple answer, they are in the banking business not the landlording business. The same reason a coffee shop won't sell you a car even if there was some scheme where it benefitted them.
  • 51.7k
13 votes

Options for building equity while living with parent?

My first thought - Cash is also "equity". You don't say how much you're contributing to the loan on your MIL's house, but one way to built "equity" would be to save as much cash as ...
  • 117k
12 votes

Buying a house. I have the cash for the whole thing. Should I still get a mortgage to get the homeowner tax break?

"Getting a mortgage for the interest write-off is like buying packs of baseball cards for the gum." That said, I'd refer you to The correct order of investing as much of that question really overlaps ...
12 votes

Does this sound like a great idea regarding being a landlord and starting a real estate empire?

This is a reasonable idea and many people have done it. But there are some risks that you need to mitigate. Overleverage. If mandatory payments are more than you can handle, you could lose your ...
  • 3,997
12 votes
Accepted

Bought a house last year should I hire a tax consultant?

I will give a modified version of JoeTaxpayer's advice. First, congratulations on your marriage and house purchase. Next, do not use the Married Filing Separately (MFS) option unless you absolutely ...
12 votes

Container Homes, do they hold value?

This may end up getting closed as too opinion based but I'll take a crack at it. You'd probably have problems with appraisals because it would be difficult to find comparable properties. At a ...
12 votes
Accepted

Strategy to Negotiate a House Purchase in an Uncertain Economy

In my view, there's no good reason not to make an offer now at the price you want. If you're coming in low it's best if you can add strength to your offer in other ways. For example you could offer a ...
  • 66k
11 votes

Home sale: No right to terminate?

The most likely reason for this is that the relocation company wants to have a guaranteed sale so as to get a new mortgage in the new location. Understand that the relocation company generally works ...
  • 20.8k
11 votes

Why not pay down payments on multiple houses and hand them to rental management companies?

The same thing that keeps everyone from investing in any "on average" profitable space - risk and opportunity cost. Renting a house isn't always profitable, for a wide variety of reasons. ...
11 votes

If a home has increased in value, why would an essential component of the home depreciate?

These values are completely disconnected You say "price of a house" but that's wrong. The sale price is the value of house + the land it is on. Shockingly often, the value of the house ...
10 votes

Bought a house last year should I hire a tax consultant?

There's no reason to file separately. And your situation is pretty simple. You can use the most basic level of tax software. In fact, given that we are less than 3 weeks to tax day, any tax guy ...
10 votes
Accepted

Townhouse or stand-alone house for a first home?

First, some general advice that I think you should consider A good rule of thumb on home buying is to wait to buy until you expect to live in the same place for at least 5 years. This period of time ...
10 votes

Should one always put 20% down?

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 ...
  • 6,227
10 votes
Accepted

How to get an offer on a house accepted?

Is there anything else I could do to make sure my offer got accepted and I do not get outbid? Having been in this position both as buyer and seller, the only thing that springs to mind is getting the ...
  • 3,665
9 votes

50k into 24 month 1.15% p.a. term deposit, did I make a mistake?

The most important thing you did was have the opportunity and discipline to save a significant amount at a young age; this was not a mistake. You might have earned a little more in the next 2 years in ...
  • 28.8k

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