30

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 another respected member offers the exact opposite. Given the way you frame the question, I'd prefer the 'worse' house in the 'better' area. As you suggest, its ...


20

Yes they can. If you review your agreement with the bank thus far, you will almost certainly see clauses to that effect (if you have no mortgage approval/agreement yet, then of course they can ask for whatever they want). The issue isn't exactly the 20% you're providing for the purchase, it's the 80% the bank is providing. The loan is backed by the house as ...


15

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 dropped. I don't know UK bank policy, but in the US a standard mortgage can be issued that makes your total monthly debt payment up to 45% of your gross income. In ...


8

The Money Saving Expert page on LISAs confirms that you must take out a mortgage: If you're lucky enough to be buying your first property with cash, you'll pay the withdrawal charge to access your LISA savings (unless you're over 60) as you need to be buying with a mortgage to use the LISA and bonus. It also clarifies that the LISA terms do not stipulate a ...


6

Assume you could do this. Where would you get the money to pay off the remaining loan? And if you want some liquid cash out of this operation, where does that cash come from? The answer is that you would take a new real estate loan. And that would involve credit scores, a mountain of paperwork, appraisals, inspectors, and whole load of other BS, and in the ...


5

You're muddling up two things but you're very close. Say you buy a house for $100,000. You have $20,000 of your own and you borrow $80,000 from the bank. At that moment you have equity of $20,000. In each payment, some goes to the principal (which started at 80k and will go down over the term of the loan) and some is charged as interest. So, all else being ...


5

Of course they can. You are overpaying for this house by about 10% of the purchase price. By paying 10% over market value, you are turning your 20% down payment into a 10% one. Is there a reason you are overpaying for this house? Is there a reason you are not attempting to renegotiate? There may be very good reasons, it just has to be very deliberate and ...


5

Consult a professional to see if there are alternatives to paying the tax. For example in Canada if you leave the country you could transfer the balance to a different pension account and avoid paying tax on it. You would have to pay tax on it eventually, but in the meantime it would accrue tax free interest. I don't know if such a thing is possible in ...


4

Generally, the amount of paperwork required for a refinance is less than the amount of paperwork required for a purchase. There are a lot of variables including COVID-19 relaxations in appraisal requirements and various appaisal waiver opportunities that your broker or lender may be able to help you qualify for. If you're trying to take money out of the ...


4

The correct answer to this is nobody knows. The reasons for this are simple: You are assuming that the "worse area" will never become a "better area". There are some places in the UK which historically have been seen as poor areas and then received investment and become "re-generated" such that house prices have risen ...


4

The real estate market will have its ups and downs and there's no guarantee property prices will go up but buying a good house in a bad area (that's showing no signs of improvement) is always a losing bet. Buying a "lesser" house in a good area will, at least, give you a fighting chance. Choose the best area you can afford, even if the house ...


4

From the purely monetary viewpoint in which you are asking the question, I agree with Vicky that you should consider what "can afford" really means - calculate what you will be comfortable paying at the moment, what you can pay if Covid lasts another 2 years and the housing market tumbles into chaos or if a vaccine is available tomorrow & the ...


4

I think there are two factors to balance out here: Buy the most house you can afford Be realistic about what "afford" means In general, it is a good idea to buy as much house as you can afford - effectively taking a step-and-a-half on the housing ladder rather than just a step. However, in working out what you can afford, don't just take the bank'...


3

Credits (more commonly called points) are prepaid interest. You pay money upfront in order to get a lower interest rate on your loan. You can either pay for the points upfront (increasing closing costs) or you might be able to increase the amount you borrow to compensate (effectively borrowing the money for the points). The payback period, or the amount of ...


3

It's probably not worth the closing costs. With only 6 years left you're not paying much interest relative to the principal. In fact, based on your current balance and interest rate you're paying about $200 (64,780 * .0375/12) a month in interest, whereas with the ARM you'll pay about $141 in interest a month. So you're saving about $60 a month in interest, ...


2

Re-frame the question in your mind. You made an offer in good faith to purchase the home. Then you paid a professional to appraise the value of the home. In most if not every case it is you not the bank who paid the appraiser. If even the bank gave them the money, it is your money they gave the appraiser. The appraisal came in lower then expected. ...


2

Octavian mentioned it already but - whyever - got downvoted. I only want to emphasize that the location matters most. I would even say it is clear obvious. Consider you own 10 squaremeters at the NY Times Square or 10 squaremeters somewhere in the outback. Even when you build only a dog house in NY and the most impressive mansion in the outback, the location ...


2

I am not sure buying is a good idea at all in your situation. You say you want to buy it as a 'stepping stone', that you intend to keep it for 5-15 years. This suggest to me: You expect the house price to go up in the next 5-15 years, i.e. you see buying a house as a better investment than a diversified market portfolio You probably see renting as 'throwing ...


1

The real estate laws are state laws. I picked Virginia as an example. In Virginia this is regulated by the state corporation commission. The position is Real Estate settlement Agent. Registration/Licensing related questions 1.Who is required to be registered? Any person, other than the lender, seller, purchaser or borrower, who conducts the settlement ...


1

When you pay points you are pre-paying interest on the loan at closing in exchange for a lower interest rate applied over the term of the loan. If you keep the loan for the full term (or at least a long time) you can wind up ahead, but normally it isn't worth it. In short: It doesn't increase the balance of the loan, it increases your closing costs. The ...


1

You need to ask the mortgage company. They are offering you this mortgage as owner occupied. They will have to be willing to accept that this property you are selecting will qualify. The owner occupied mortgages don't lock you in forever, they do allow you to rent the property at some point in the future. The language in the contract should specify how long ...


1

Some good points were added here, but in the end its about opportunity costs of money. Let's say you could fully finance, partially finance or pay in cash. The money percentage you put down influences the interest rate (the more you put down the cheaper interest you get) you should consider the opportunity cost. This means if you recieve a higher interest on ...


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