New answers tagged

0

The thing you're not telling us is: how much do you need or want to do this transaction? People who need to move are (always) in a far weaker position than those who aren't particularly bothered, who are cool, laid back, etc. There can be reasons for being laid back. Sometimes the reasons can be wrong. The same argument applies to sellers: do you know ...


0

It would be foolish to purchase the house at the price agreed at the height of the market as you might lose £100,000 or more. It's difficult to see the seller agreeing to a £100,000 discount as the future is hard to see, so why not offer £50,000 less and go ahead? Another thing is, are you likely still to have a job in a few months and be able to afford ...


0

Please refer to my answer in the question you referenced for some background on my personal choice. Now on to your questions: The first is should they close? My first question would be how much earnest money do they stand to lose? I would assume this is somewhere between $500 and $5,000 depending on whether its based on a flat rate of $500-$1,500 or 1% of ...


4

If you can still walk away from the deal, particularly without having paid any deposit, your leverage is a willingness to cancel the deal. In the US you usually only risk deposit money until you have a deed and mortgage. Are you sincerely concerned enough about the housing market changing that you will cancel the deal? Supposing you are actually seriously ...


16

With the caveat that I'm assuming your verbal agreement isn't legally binding (AIG says it isn't), I would pull out of the deal completely if I were in your shoes. By negotiating, you're essentially trying to price an unprecedented global financial/economic meltdown. What is the right haircut to the existing price? 5%? 10%? 50%? Are you looking for a ...


0

Providing the deal isn't legally binding, there's nothing to be lost by asking, and plenty to be gained. It may well be that the seller will say no, but at this late stage, having gone through the hoops etc. already, he may well be available for some negotiation.If not, then the price should stand, and if you're still happy, continue with the deal. That ...


11

My wife and I run a real estate brokerage in Florida. The transaction process is different here but principles are similar. I think there's a good chance the deal will fall apart if you try to renegotiate the price at this stage. Buyers and sellers in residential real estate transactions often make emotional decisions. Don't be surprised if the seller ...


2

Since you are buying a house, you will have been watching closely the housing market recently. Go back and look at some of the other properties you considered that are still unsold. Has their asking price gone up or down? The housing market is entirely capitalist so have no shame in following the fundamental capitalist ethos of supply and demand. If demand ...


5

Recession (and the related risks and uncertainties) goes both ways. If the real estate marked drops significantly and doesn't recover quickly, you will have overpaid if you buy at the agreed price. It would indeed be reasonable to ask for a price reduction and cancel the deal if you don't get one. If the government decides to counter the economic recession ...


18

If you've already signed a contract, it's too late. Well, barring legal shenanigans. If you haven't signed a contract, then sure, you can ask. That's how negotiations work. The buyer comes up with reasons why he should pay less, the seller gives reasons why he should pay more. I wouldn't expect asking for a lower price to derail the sale. The seller could ...


35

You could ask, but you risk the seller deciding to just cancel and put the property back on the market once restrictions lift, shutting you out. Depending on the exact neighborhood and local market, there is no guarantee that a recession will even affect the chosen neighborhood. You described it as a very competitive, presumably it will still be a desirable ...


-3

If you can put zero down, then do it. Your loan rate is what 3 to 3.5%. So for 30 years you'll have the lowest loan rate you'll probably ever have and probably get to itemize your deductions. Imagine getting only 8% return for the stock market for 30 years on 135k.... 1.3 Million. AND all stocks are ON SALE! Year This Year's Return Total Returns Total ...


3

You could offer less. You must be prepared to walk away at that point though, as the seller is within their rights to completely withdraw the sale. When I bought my property, the conveyancer advised me not to proceed due to non standard construction. I wanted the house anyway as it was better than other properties i'd looked at. I called the Estate ...


18

Short answer: It probably makes sense to avoid the PMI (Private Mortgage Insurance), but it ultimately depends on how probable it is that you are unable to pay the monthly installments with/without the extra savings. Long answer: While i am not an expert on the specifics of the US mortgage market (I presume the question pertains to US), it seems that a ...


4

You are proposing to gazunder. I can't speak for what might be 'best' for you personally, but I don't know of anyone who thinks this is a noble practice. how would it be best to approach this Tell your conveyancer to tell the seller's conveyancer. Both these parties might try and talk you out of it.


3

I am an old person, and over the years I’ve had a number of rental properties as well as those that I’ve lived in. With that, came a number of refinances. When I was trying to buy rental properties and had trouble getting a mortgage from a local bank I went through a broker. Yes that came at a cost. for the home I am in now, nearly 25 years, I have ...


1

Yes, fixed rate mortgages should/will drop as the bank of England rate drops, it will likely be small though, as banks are already loaning on very thin margins (in some cases in UK housing market, close to if not below inflation). However, it is worth noting that locking in 'preferential' mortgage rates can be a huge trap: low interest rates generally ...


0

I strongly advise you to reconsider whether this is the right time for you to take on additional debt, even for a worthwhile purpose to earn rental income. It is highly unlikely that you can achieve higher returns, or lower risk returns, compared to just paying off your credit card and auto loans. If you pay those off even by consolidating at a 4.5% loan, ...


1

I'm going to answer based on my own personal perspective on financial decisions - ultimately, you need to determine your own criteria (risk tolerance, goals, etc) and decide the answers to your questions for yourself. Personally, I don't think it makes much sense to invest money when you have outstanding high interest debt, because from a pure numbers ...


3

per one of the title insurance company If you're considering refinancing your mortgage, you may be surprised to see that you are required to purchase a new lender's policy of title insurance. This is because a lender's policy only provides coverage for the life of a loan. When a home is refinanced, the life of one loan ends and another begins. ...


7

First understand that when the stock market drops like this, it absolutely can impact you, even if you aren't "in the stock market", because when stock prices decrease that's an indication that the market believes those companies are going to be performing worse. ie:if Apple shares drop 10%, the market believes (to be simplistic) that the total foreseeable ...


2

It seems unlikely that you paid additional points when the mortgage was sold, I've never heard of someone doing that, and I think you would know if you had. So either this duplicate reporting of points is a mistake, or the second 1098 includes all the amounts you paid, and essentially supersedes the first 1098. It's been a while since I had a mortgage that ...


3

And to answer the question you asked: Because a residentual mortgage OUTSIDE of a securitized pool is neither standardized in any means (interest rate, duration, size). Noone wants to deal with a market for 10 million different mortgages, one each. All regular markets require some standardization or at least "buckets" that are large enough to handle the ...


2

When residential mortgages are securitized in Collateralized Debt Obligations or CDOs, the CDO is a member of the set of "commercial paper". So you're partially right: a derivative of residential mortgages can be in a money market fund. The "gotcha" in the question is that a whole base mortgage can not.


2

If you know it is incorrect, then just report one. It sounds like an obvious mix up on their part. If you report two, and you get audited, it will cause you more headaches than it is worth. Being honest goes a long way with the IRS.


2

Without looking at your mortgage paperwork, it's hard to know. Were I to guess, though, there are often expenses that appear both as prepaids and as escrows paid at closing in your closing documents in addition to being part of the regular escrow account. In other words, you're making an initial payment prior to closing, then make a payment as part of the ...


0

Purchase Rate means exactly what is says. It is the loan rate you get if you are buying a house. Refinance Rate is the rate you get if you have an existing loan and you want to refinance. Apparently Wells Fargo is not really interested in doing many refinances right now. As of today (3-10-2020), I've seen ads for refi rates as low as 2.99% (in the US), so ...


2

There is no different tax treatment for a paid for home versus a home with a mortgage. As a big advocate of not borrowing money for any reason, I can only think of one disadvantage of having a paid off home. Assume you currently own a home with a 100K mortgage, and enough cash to pay off the mortgage, in fact you have 500K in cash. But you want to ...


0

Well, the U.S. overnight bank rate is 1.25% but that rate is not currently available to investors in short-term government bonds and is not expected to survive much longer in special-rate bank deposits. Since a fund or a savings account is required for on-going deposits, then the likely choices are a 2.2 year duration investment-grade corporate-bond fund, a ...


7

Imagine if you had put your funds into a diversified equity mutual fund 2 weeks ago. You might have lost ~15-20% of the value of your downpayment savings. In a scenario where you need funds on the short term [and 3 years is short term for these purposes], you want to take on as little risk as possible. That means a savings account, or some form of a ...


1

The most obvious risk is that your cancellation may cost you money. Money spent for items such as the credit check and the appraisal may not be refundable. You have to review all of the paperwork to see what other provisions apply. You have to plan for paying for those items again, because the new lender will not have access to the earlier products and will ...


0

Here's the SOURCE MATERIAL FOR the ATR/QM Rule. If you really want to read about the long version as to why, here's some documentation on that subject. I'LL DO ANOTHER POST ON HOW TO CALCULATE IT DOWN BELOW. ATR/QM Rule In January 2013, the CFPB adopted Ability to Repay/Qualified Mortgage Rule (ATR/QM Rule) that implements the ability to repay provisions ...


0

I would first of all do the following. Check the NMLS website to conduct a due diligence check on the loan consultant to see if this person is licensed or not. Check the NMLS past work history and self-reported employment history for violations done by this loan consultant (no arrest, convictions, fraud suspensions, etc.) Check the state's real ...


0

The checks you mention are all good ones, there are enough trustworthy online resources that any disreputable lenders should stand out. So mostly you're shopping for price and convenience. For price you'll want to focus on rate and fees rather than just rate alone. Origination fees seem to vary the most between lenders that I've researched, but you'll want ...


-1

Lenders, have what's called Loan to Value- and they used this for creating loan decisions on refinance. The loan to value affects the interest rate, and usually the lower the LTV with best credit, income, etc will yield you the best rate and options to better loan programs. Loan programs have specific lending criteria; for example minimum fico score 780, ...


4

I am basing my answer on the United States. Before you apply for the new mortgage: - Estimated House value: 400K - Current mortgage: 200K - Estimated equity: (400k-200K) or 200K Most lenders will put a maximum limit on the new mortgage of 80% of appraised value. What you borrow depends on your income, your credit history, and what you want to do with ...


4

The limit you can borrow will be based on the home's current value, but they do not force you to cash out equity (borrow more than you owe). In your example you could refinance for just the 200k remaining balance, you'd typically do that if your only goal was to benefit from lower interest rates. You could also borrow up to ~80% of the home value if you ...


11

There seems to be a misconception in your question that I will try to address through explanation: What is Equity? 'Equity' in general refers basically to the value of something you own, where you bear the risks and rewards of that asset. This means for example that the bank which holds your mortgage, does not have 'equity' in your house: If your house ...


5

"Usually" is a broad term and I don't know actual statistics, but it's not uncommon to "cash out" equity for various reasons. I would say that it's sometimes considered a red flag for lenders (meaning that it's assumed that you have to borrow the money for some reason, which is a sign of financial distress). You might end up with higher fees or a higher ...


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