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The rate is the rate such that the present value of outflows (payments) is equal to the present value of the amount(s) borrowed. The present value of a cashflow is: c / (1+r/c)^(t*c) Where c is the amount of the cashflow, r is the rate, c is the number of compounding periods per year, and t is the number of years. Once your calculation is set up to ...


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What happens if someone (say Joe) gets a 1k personal loan and puts up a car (Joe's moms) for collateral It does not happen because the bank will want the car title and a signature from the owner. Which is not joe. Now, if Joe's mom agrees - then she actually enters into a contract with the bank to provide the guarantee and the question makes zero ...


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when collateral is required by a bank, they usually want a way to make sure that the item can't be sold without their permission, and they want to make sure the borrower actually owns the property. When getting a mortgage or a car loan, the lender makes sure that either they are explicitly listed on the car title, or their lien is filled with the local ...


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What happens is that Joe goes to jail for fraud.


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I am sorry for your loss and the most important thing is to remain calm during this difficult time. The tone of your question suggests that there might be an adversarial relationship with the boyfriend. "All the money" is a vague term. So let us break it down a bit. The car: My assumption is that the car was totaled. So first, the insurance company ...


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It may be a good idea to have a backup option. This way if borrower discovers the first lender has unreasonable fees of or makes unreasonable requests during the underwriting process, the borrower has some freedom. If your hard credit pulls for a mortgage or auto loan are around the same time, the credit rating agencies recognize it as shopping around. ...


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First, you should be looking at the cash flow as well as the profits. You are making $91/month in profits, but because you still have to pay the principal part of the mortgage, you actually have a negative cash flow. If you refinance to a 15-year mortgage, that effect is even more pronounced: your cash flow will be worse (because you have to pay more in ...


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This is how I see the calculation: My projected rent is: $1850 now the expenses: My monthly expenses would be: (my current mortgage split is 649 (interest) + 412 (principle). I am including the interest part as an expense) Mortgage : 649 (interest part) HOA : 510 Property tax: 352 Estimate of monthly repairs : 100 Don't forget ...


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You're overlooking some huge tax considerations. Deducting mortgage interest First, you get to deduct the interest, taxes and insurance on the home, because it's your primary or secondary home. So I see $1001 of interest and taxes, armwave $99 of insurance, and that's $1100/month or $13,200/year of deductions. (By the way, if this is news to you, you ...


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I'm not sure what "tilt effect" you're looking for (it's possible that there are multiple things in the world with that name). If we're going by this article or this paper, the tilt effect is a recognition that, over time, mortgage payments get effectively cheaper for most borrowers. Underwriting guidelines don't (generally) change with inflation so the ...


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Broadly speaking, FNMA and FHLMC allow the government to ensure liquidity in the mortgage market (by ensuring that lenders have a guaranteed buyer of conforming loans) and to provide a small subsidy on mortgage rates. The intention of loan limits is to ensure that these subsidies are focused on "middle class" borrowers rather than the super wealthy. If ...


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In reality, buydown scheme doesn't help reduce property inventory during a housing slump. Because the bank will be wary to approve a higher mortgage amount. Ironically, it is widely used to encourage flipping during housing speculation booms. In which speculators are using the scheme as leverage to scoop many houses to flip. Here is how it works: one only ...


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The only way to see the full picture is to create a spreadsheet with two sides: On the first side, map your income from the investment property over the years, including everything down to potential vacancies, repairs costs, and closing costs On the other side, map how much you'd make by selling the house at a given point of time and investing the remainder ...


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Is my calculation correct? More or less. Your list of expenses is not complete and repair/maintenance expenses can vary wildly. You'll also depreciate the house (not the land), so with your current numbers you could be running a loss for tax purposes which can offset income tax on other income and basically act as a discount to your cost of equity, so ...


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Three additional things to consider. (1) Are you planning on buying a house in the new town you will be moving to or are you renting? If you choose not to sell your old house and buy a new house you will have less money available for a down payment, which will result in a longer mortgage at a higher interest rate. (2) This assumes you will be able to have ...


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Without knowing your financial goals, income, other assets, etc, I can't make a recommendation. For example, do you have a sufficient emergency fund to cover both the expenses for this home and your new one should you lose your tenant and/or your job? However, one part of the calculation you did not mention is tenant turnover. Does your projected rent ...


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Does it make sense for me to keep the house Are you willing to be a landlord for $91 a month? What happens if your house goes unrented for 3 months? 6 months? How will you pay its mortgage? In my opinion, you don't have enough buffer to make this worth the risk. If you could afford for it to go unrented for 6 months then it might be a good investment in ...


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The above is an example of how the mortgage tilt effect actually hurts the borrower. When there is an inflation, each payment is worth less in real terms, because inflation erodes its purchasing power. In my example, the loan is 30 years with monthly payment about $2500. The blue line shows the trajectory of principal payment in the absence of inflation ...


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How does this help to get rid of the excess inventory? In other words, why would borrowers "better" or more easily qualify for the loan if the developer does the buydown? Buy-downs were popular in the United States before the great recession because it made it easier for the buyer to get approved for the loan. The first years payment (which was reduced ...


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To add the @Kevin's answer: Question 1: The dealer will give you a Retail Purchase Agreement, also known as a purchase order. This documents contains your information, the car's information, plus all expenses and fees associated to the purchase. You send the bank a copy of the purchase order, and the bank sends the dealership Drafting Instructions, which ...


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I can't speak to the history of it - most likely some bank came up with the idea as a way to reduce a borrower's interest rate. It is effectively "prepaid interest". You pay a "fee" upfront in exchange for a lower fixed interest rate. Whether this is beneficial to you as a borrower depends on how long you keep the mortgage (the longer you keep it, the ...


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You should refer to your contract. But usually it won't. Every over-payment will be counted toward the next payment. So of you pay the first month 450, the second will be billed as 350 and so on. So on paper, if you pay 450 every month, at the end you will have 2400 of over-payment. Which then leaser can book (usually after your written request) that ...


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You are looking for something similar to loans when there is a structured settlement. This is generally done when a person is receiving payments spread over many years, but they want to receive the money now instead of a monthly or annual check for many years to come. Your situation is different because your payout next year isn't 100% guaranteed. That ...


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