New answers tagged

3

Ignoring the specifics of the scenario (transfer to estate, recovery of collateral), here's how basic Bad Debt is accounted for: Bad Debt is an expense for the lender. It's a decrease in an asset account and an increase in an expense account. For the borrower, it would be an income ("Forgiven Debt?") since they had a reduction of debt and no change ...


0

If the buyer dies his estate will inherit the debt (if they want to receive the inheritance they will have to pay the debt). This is not an absolute safety, as maybe no one wants to accept the inheritance (debts are higher than assets) or there may be other situation (bankruptcy). In your specific case in which the loan is to be used buying a defined item, ...


1

It simply depends on the type of loan. Typically, with a "personal loan" from a bank, yes, you can do precisely this. I have indeed done this a couple times for various reasons and repaid the whole thing after just days, and paid only a trivial amount of interest on the whole affair (like "a dollar" or such). So yup, no problem. But, very ...


0

Yes, in fact as long as you pay in legal tender they cannot refuse your payment. It is quite common that people who intend to build a credit record open clothing accounts at big retailers buy clothes on credit and pay them off the next month.


0

It depends on the type of loan. A mortgage, personal loan, etc. will typically start accruing interest immediately. If you pay it back the same day, there may not be any interest, but if you pay it back 29 days later, you will likely owe most of one month's interest. Depending on your unstated goal, it may still be worth it. For instance, I recently took a ...


13

I think you're describing credit cards. It's literally a 30-60 day (depending on when you make the purchase) interest-free loan that you should pay back on time to avoid interest. If not credit cards then a HELOC (Home Equity Line of Credit). Just about any line-of-credit loan will fit your description. If you explicitly want a "personal loan" then ...


5

This is commonly allowed on margin loans. I use this from time to time either when replacing one security with another or when selling a security to cover an expense. The loan covers the time period between when then funds settle for the security sold and when the expense is paid for or the funds are provided for the security bought. If settled within the ...


23

"Immediately" per the title, mortgage refinance loans and many other consumer loans are covered by the Truth in Lending Act providing a Federal 3 day "right of rescission", where you can cancel the loan within 3 days and owe nothing. Pennsylvania separately provides a 3 day right to rescind for any contract over $25 where a salesperson ...


85

It will depend on the terms and conditions of the loan you take. Some loans have penalties on early repayment while others do not.


2

I think your innumeracy is making you overthink this. Date Amount ----------------------- 2020-12-01 $1,000 2021-01-01 $1,000 2021-02-01 $1,200 etc. The biggest problem is not misplacing the sheet of paper you record this on. I'd recommend taping it to the inside of your bedroom or a closet door, so it's not out in the open ...


0

Answering the question posed by the thread title directly, I'm saying "no". The key words from the question are "point" and "sense". The word "sense" is a fuzzy term. There are prices at which you should obviously buy, and there are prices at which you should obviously walk. In between these there is a grey area, not a ...


14

Make a spreadsheet. On your own device, a Google Sheet or any other reputable cloud service provider. Make columns that each say someone's name and "gift" or "loan". Eg "Mum loan", "Mum gift", "J loan", "J gift" and so on across the sheet. Make a column before all of those for the date. Now enter a ...


-2

tl;dr: Rent money is gone, mortgage payments are an investment I bought an appartment (in Germany) when I was fairly young and had landed a good job, and it was one of the best decisions I've ever made. At the moment, you lose 600 € every month. This money simply disappears. If you would pay the same money for mortgage, in the first few years, a large part ...


5

Instead of thinking about hypotheticals, lets run a basic scenario. My assumptions: Your rent is 600 EUR and will increase by 3% per year Real estate sale prices will increase by 3% per year on average Utilities are not included in your current rent and would be about the same whether you buy or rent (so we can exclude them from the calculus) Austrian real ...


1

Loan rates are made up of several components, three of which are: funding cost (cost to the bank to get the money to lend to you); profit margin (how much the bank wants to earn from the lending); and risk (cost to the bank if you default on repayments). Each bank - and possibly even each business unit - can have a different funding cost. The source of ...


3

Here's the issue that no one ever talks about. A piece of real estate always generates a rent. In an owner occupied home, you don't notice this because you pay and receive the rent. Essentially, you move the money from your left pocket to your right pocket, and the "transaction" is a wash. In this sense, a home is an asset that produces income. Now ...


2

Is it now a better alternative to keep renting and wait for the real estate market to cool off? According to the given data - renting is preferred (financially). However, if one is feeling compelled to own a home, I'd also consider: Building a new house Taking a larger mortgage (with variable interest) Make an extra effort to increase income/saving to ...


8

The calculation you are trying to make is laid out in some detail in the German context, that is mostly applicable to your situation, in the various books by Gerd Kommer (Kaufen oder Mieten etc.). I encourage you to read it. His end result is that in most cases, renting is financially more prudent than buying given the current market, assuming you take the ...


1

If you're trying to answer the fairly specific question of "is renting or buying cheaper in my area", there are two key numbers, that are loosely comparable, and can both vary significantly with time and between different areas: the rental yield and mortgage interest rates. The rental yield is the fraction of the cost of a home you'd pay in rent ...


0

A couple considerations that, at present, haven't been addressed. What are the laws surrounding what your landlord can do? I know some jurisdictions tie the hands of landlords so that they can't unilaterally decide not to renew your lease or to raise rent to an amount commensurate with the for purchase market. As your own math shows, you are living at a ...


1

Seems like you are in an area where renting is cheaper than buying. That's great for you (see others answers for more details). Another alternative to consider is to continue renting your flat and invest your money by buying a flat somewhere else more profitable solely for letting. This way, you can keep the flexibility from renting, and still use the ...


2

Answering the question: How does a median income like that still allow homes to become this ridiculously >expensive? A couple earning your stated median income each, 4.400€, with 60.000€ in savings (20% of your stated 300.000€ price tag), can afford to pay a 20 year, 2% fixed mortgage monthly payment of 1.214€. I say, they can afford it, in the sense of ...


2

Governments are choosing to support even median income families, recently, in both renting and homeowning. You might look for these subsidies. The city of Vienna lists housing subsidies here. For a US comparison, the city of Boston lists housing subsidies here.


2

Not really. If renting or buying were clearly preferable, then that's what everybody would do (roughly). Instead they are just different, and different people at different points in their life might prefer one over the other. The finances between buying and renting, while quite different, are mostly a wash overall. Either choice can go well or poorly for you ...


42

There are two ways to view this question. The simplest is the rough and ready approximation that you should be willing to buy a house for about 20 times the annual rent for a comparable house. With your rent of €600/month, that works out to a fair price of about €144,000, if the place you are thinking of buying is comparable to where you live now. If the ...


3

With high interest rates for crypto loans, I'm currently thinking of lending out my cryptocurrency on a crypto lending platform like Celsius Network. However, I'm not too sure about the implications The main implication is the high interest rates mean that the risk is high. Anyways, I want to know if there is anything more to crypto lending other than ...


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