34

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. Since you're having a new house built, you would need to make sure that the construction cost plus the $185K you currently owe is sufficiently less than the ...


15

Different counties could vary on what they report, but in my county there is a searchable public record when you file a mortgage on a property (including the mortgage amount) and when the mortgage is released. There is no public information on how the mortgage was released (or the payoff amount), so if the refinance is with the same institution, then there ...


14

If you had no expenses related to the property as the owner of a rental property: no interest payment on the mortgage, no real estate tax, no condo fee or HOA fee, and no insurance, and no utilities; then yes the entire rental income minus depreciation would be taxable. But most people who have rental property aren't in that situation. They do have to pay ...


8

D Stanley's answer is excellent and just to provide information on different jurisdictions, I will explain how mine works: Any time a lien is filed in my county, that is public record. So if you initiate any kind of mortgage, that information is available publicly and often generates a number of solicitations. Some companies are savvy enough to look back ...


8

I agree with D. Stanley's answer and started a comment that was getting a bit long. One option here might be to get completely new loan that covers not only the construction but the remaining balance on the existing mortgage. At first this seemed unlikely to fly but it's not too different from getting a loan to buy a plot of undeveloped land and build a ...


7

The general consensus on paying points to lower your mortgage interest rate is that it's a bad idea. The reason is that it takes a while to break even, say 5-10 years before it was worth it to do so. If you refinance or sell before the break even point then the purchase of points was wasted. If you start overpaying the mortgage to pay it down early, this ...


6

Visit a mortgage broker or go to a loan officer at a bank and they'll be more than happy to prequalify you for a loan. That will tell you what they estimate you can borrow and will be vastly more accurate than what appears below. You can plug the numbers into a prequalification calculator and get another estimate-- they're doing the same calculations ...


5

You've pretty much nailed it conceptually, but you are implying something which I think should be explicitly called out: Plus if we actually pay 20% to 50% down payment, and if the mortgage interest per year is $6,500 or more, then in this case, all the rental income is tax free? Not exactly. You just made the case that there is no rental "profit"...


5

No, there is no minimum limit to get the government bonus How you transfer the money will depend on the platform, I am with Nutmeg and have set up a direct debit. When it first started however, I had to remember to log in and transfer the money The maximum you can put in a LISA is £4000 a tax year. You cannot put any more in (although note if you have a ...


5

Doing something solely "so that I can claim a higher tax deduction" is generally not a good idea. While a tax deduction is an usually incentive to do something, you should only do that thing (e.g. donate money, pay mortgage interest/points, etc.) if you were inclined to do so anyway. Generally, in order to take a deduction of $X, you must give away/...


4

Is there an actual way of figuring out which lender will have the best interest rate, or are they all going to be essentially similar enough to where it doesn't matter that much? In that case, I would be best off choosing the lender who is easiest to work with and has the most competitive closing costs, or some other factor that is important to me? The ...


3

The depreciation is more of a tax deferment. When you go to sell the property, the basis is reduced by the depreciation you have claimed over the rental period and the IRS will "recapture" the depreciation with a Section 1250 25% tax rate. This is excepted from the personal exemption on primary home capital gains (the situation where capital ...


2

You are "fighting two battles" when obtaining a home loan. They are debt to income ratio and income. Your income is healthy given that you are young and single. However, many lenders will not give you credit for the part time job. They reason you could quit anytime, and it might be wise to do so if it jeopardizes your full time job. While that ...


2

This is a problem that people currently face when trading houses. Typically, one does not have the amount of a home purchase laying around even if their net worth far exceeds their purchase price. Getting a conventional mortgage cost real money, and some borrowers may not qualify for a second mortgage. For this reason most home traders make the new home ...


1

I am a financial and monetary economist and there really isn't anything quite exactly what you are describing. Let me describe what is missing from your post. Let me first begin by mentioning two different types of deeds. One is a fee simple deed. The other is a grant deed. Three states use grant deeds. The mortgage laws around grant deeds, of necessity,...


1

In a buyer-financed mortgage, you add the actual interest paid to you to your taxable oncome, year for year, as you get it. If you don't get any more interest - for whatever reasons - you don't have to pay taxes for it, obviously. The lost interest is just that - income you should have gotten (and taxed), but you didn't. There is no tax advantage to it for ...


1

Justin Cave has a good answer and Pete B.'s is decent, but there's a bit more to this that hasn't been said yet. As Justin Cave mentioned, there's a lot of mortgage calculators out there that'll help you figure out some of the pure math of the mortgage, but that's only skimming the surface of what you'll need to know about the process, so I won't go into ...


Only top voted, non community-wiki answers of a minimum length are eligible