297
votes
Accepted
If you have a home mortgage, why do you still have to pay all of the property tax?
You have a misunderstanding of what a mortgage means.
The bank does not own 80% of your home. Instead they have lent you some amount of money, and they have a lien which means they can possess your ...
- 33.1k
237
votes
Should I buy my house in cash, or with a mortgage and invest the rest of my money?
Ask your investor friends if you already owned the house, would they be advising you to take out a mortgage in order to invest elsewhere. If not, ask them to explain the difference between taking out ...
- 7,566
138
votes
How is early-and-often home buying as "get rich" advice feasible?
How do you buy 1 house a year?
You save up the money you make from the rent for a down payment on the next house. Then you save up the money from those two houses and buy two more the next year (or ...
- 131k
112
votes
Accepted
Are my parents ripping me off with this deal that doesn't allow me to build my equity in my home?
It's a little unusual, but I don't think the financial terms are completely unreasonable on their face.
What you describe is similar to an interest-only loan, where you make payments that only cover ...
- 6,971
97
votes
Accepted
How to handle shared mortgage payment if one person can't pay their share?
Transfer the ownership of the house now.
If you have broken up and your SO has moved away you don't want them to have a share in the house you are living in. They can cause you a lot of trouble down ...
- 33.1k
95
votes
Why do sellers care about down payments?
They want to gauge the chance of a successful sale. There's nothing quite as frustrating when selling and moving to a new home as getting into escrow, doing all the paperwork, crossing off all the ...
- 24k
92
votes
Buy house with down payment, no loan, sell instantly
Wholesaling is basically the act of standing in at an auction and "buying" a home on behalf of a yet-to-be-determined buyer. You put a down payment on the purchase, and then, you go out, find that ...
- 17k
87
votes
Accepted
Currently sole owner of a property. My girlfriend is looking to move in with me and is offering to pay 'rent'. Am I at risk here?
The rent payment is in principle taxable. However, you should be able to take advantage of the "rent a room" scheme, and the proposed rent falls well under the £7,500/year tax threshold for that. So ...
- 27.9k
84
votes
Accepted
Why is being "upside down" on a mortgage so bad?
I can think of a few reasons why they seem like a bigger deal to people than similar situations with other loans.
Mortgage values are a lot larger than car loans. For many people, real estate is by ...
- 15.1k
81
votes
Should I buy my house in cash, or with a mortgage and invest the rest of my money?
I think you have a misunderstanding in point 2:
Effectively, the cost of the mortgage in the first year would be much higher than the nominal ~3.5 percent interest rate of the loan.
No, the rate ...
- 131k
81
votes
Accepted
Borrowing money in one country to pay off debt in another
Logistics of borrowing in a different country aside, financially if the reason the interest rates are higher is because inflation is expected to be higher, you might be trading smaller interest ...
- 131k
79
votes
Accepted
What exactly happens to my mortgage debt when I sell my mortgaged home?
You're misunderstanding the interest portion. You don't immediately "become liable for" and owe all of the interest on the loan up front. Any "total interest" calculation presented at the beginning of ...
- 9,505
76
votes
The mortgage company is trying to force us to make repairs after an insurance claim
You submitted a claim for damage to the deck. The insurance company notified the mortgage company.
Now the mortgage company wants to make sure that the collateral for the loan is still in good ...
- 136k
75
votes
Accepted
Considerations when providing money to one child now, and the other later?
Loaning money to close relations tends to end poorly. You are better off not loaning your older child money. This solves all your issues except for one.
You mention that your cash savings are ...
- 76.1k
69
votes
Amortized Loans seem to benefit the bank more than the customer
You're borrowing money from someone else, and "interest" is the cost for borrowing money.
There's no Greedy, Evil Bankers conspiracy at all: it's just math that the cost is high when you owe a lot.
...
- 50.6k
69
votes
Accepted
Is there any reason to not buy if mortgage is comparable to rent?
There are a few economical reasons to rent instead of buy including if the cost are similar.
The first is that you anticipate that you might be moving soon. It is typically expensive to transact real ...
- 76.1k
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 ...
- 47.2k
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 ...
- 50.6k
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
64
votes
Is paying off your mortage a #1 personal finance priority?
Paying off your house quickly should be a #2-level priority, behind making sure you have some basic savings but definitely ahead of any investing concerns, because your house is not an investment; it'...
- 2,177
63
votes
Why would a lien appear on a mortgage after 17 years?
RocketLawyer has a brief review of how to place a lien. Searching Money.SE for 'lien' may also turn up some helpful information for similar situations.
You should exercise extreme caution when ...
- 8,632
60
votes
Accepted
Invest $50,000 in cash or borrow $100,000 and get a mortgage?
I can use that property to get a loan for another real estate? Or that's not how loans work?
That's not how secured loans generally work. You could get a mortgage on your rental property, but the ...
- 131k
59
votes
Why is being "upside down" on a mortgage so bad?
The problem comes when the borrower cannot afford his home.
If a borrower buys more home than they can afford, as long as he can sell the house for more than he owes, he's not in a disastrous ...
- 115k
59
votes
Accepted
Is giving my girlfriend money for her mortgage closing costs and down payment considered fraud?
With the standard "I am not a lawyer" disclaimer, consider this question:
If you and your girlfriend split up sometime after purchasing the house but before getting married, would you expect her to ...
- 2,131
59
votes
Accepted
Tips on making a best and final offer
Personally I would send back this note:
"Thanks, we have already made an offer. Feel free to come back to us if you have a counter-offer in the future. For now we are persuing other properties.
...
- 13.8k
58
votes
Accepted
Mortgage adviser recommends a longer term than necessary combined with overpayments
Two mortgages with the same interest rate and same monthly payment are identical in their total cost and time-to-repayment, regardless of the loan term.
The big caveat here is that the 25-year and 30-...
- 4,596
58
votes
Should I provide my username and password for my brokerage account to my mortgage lender to verify my assets?
If more than one person knows something, it isn't a secret.
There is no legitimate circumstance under which you should provide your personal password to anyone. Ever.
Anyone that asks for your ...
- 1,566
57
votes
Owning house for 3 years. 15 or 30 year mortgage?
You said that you figured the interest you will have paid over the first 3 years will be the same with the 15- and the 30-year mortgages. That is not quite accurate.
Let's look at the numbers.
From ...
- 115k
57
votes
Is there any reason a person would voluntarily choose to have PMI?
Private mortgage insurance protects the lender if you stop making your mortgage payments. It does not benefit the borrower, aside from the fact that many lenders require it if your down payment isn't ...
- 4,596
Only top scored, non community-wiki answers of a minimum length are eligible