New answers tagged

0

We have this scenario near me a lot and I even went over it and decided not to build - for specific land reasons. Some of the advice you have on here is just flat out wrong. You do demolish a perfectly good house if the cost of doing it plus the cost of building new are going to be lower than the future value of the new house. Banks will give you a home ...


0

Such a product does not exist in the insurance industry because the product you describe is not insurance, you are describing an option. Effectively, you want to purchase the right to sell your house at the price you paid or greater. To simplify, insurance is protection against scenarios in which there is downside only, such as someone stealing something ...


14

Your literal question is, How would I get a loan for that? Ultimately, you'd have to talk to lenders in your area to answer that. I've never heard of a construction loan to cover the exact scenario you're describing (without some additional factors, like subdividing the lot first, or demo'ing the old house first), but that doesn't mean it doesn't exist. ...


6

If the city or county planning-commission will approve the project then the banks can make a construction loan on it. Then after final approval, the construction loan can be converted to a mortgage but the new mortgage must also include the payoff of the other mortgage. Actually, I think the construction loan would have to include payoff of the other ...


16

Honestly, if your current home is in good shape, you'd be better off, financially-speaking, not demolishing it. Your options, as I see it: Build an extension on your house. This should be significantly cheaper/faster, and this is a common enough thing to do that you shouldn't have trouble getting a loan. Build the new house, move over, then either sell or ...


2

Any nonrecourse loan is in some sense a hedge against the collateral decreasing in value. "Nonrecourse" means that if you default, they can't take anything other than the collateral. For instance, if you have a $500k house with a $400k nonrecourse mortgage, and the price of the house drops $150k, you're out the first $100k, but you can walk away from the ...


6

In a comment, you clarified that you were specifically asking about a first house: I was hoping for a more cohesive overview of what tax elements come into play for a new homeowner At the federal level, there are no tax benefits to buying your first house. You get the same benefits as anyone else who owns a house with a mortgage. This has been a change ...


9

In the US you can take a standard deduction or itemize your deductions. Mortgage interest and property tax tips the scales in favor of itemizing deductions for many people. So the answer to your question is, it depends. If the sum of your itemized deductions exceeds the standard deduction then you pay less federal income tax by itemizing your deductions. If ...


8

Possibly - you can deduct mortgage interest from your federal taxes if you itemize. In order to benefit from itemizing, though, you need have (for 2020) more than $12,400 in deductible expenses, or $24,800 if you are married and file jointly. This is not as common as it was before the recent tax changes, and typically requires either a large mortgage and/or ...


0

The sellers agent should have helped them prepare a plan for selling the house. That would have included an estimate of what an appraiser would value the house at. With that estimate they would have decide where to set the price they were advertising the house for. Sometimes they advertise a little low, with the hope they will get multiple offers. Potential ...


2

The appraisal determines how much the bank is willing to loan you (and what interest rate it will charge you. If you are buying a house for $250K with 20% down payment and wanting a mortgage of $200K, but the appraisal is $220K only, the bank won’t want to loan you more than $176K (or maybe $198K and charge you more interest since it would be a 10% down loan ...


0

I'm putting myself in the shoes of a potential buyer. I would want to know: 1) Will artificial turf make the underlying patio wet and, for example, promote the growth of mold? (2) Are there any exposed parts of the patio that might be structurally affected -- i.e. wood that might rot? Even though you are now certain that you will never want to sell, (...


2

The first question about your plan is: are you allowed to? If you live in a community with a home owners association (HOA) or something similar, you may have to go thorough an approval process. If you skip the approval process, they may make you remove it. It can even be discovered just a few days before settlement when the HOA does an inspection. The ...


3

Some points: When the company offers you a match, not contributing to your 401(k) is -- in no uncertain terms -- a pay cut. If this is your first home purchase then you'll be able to exclude $10K from the 10% penalty you'll pay on the 401(K) withdrawal. You'll have to pay income tax on the whole value of your 401(k). Thus, put aside 20-25% of the value of ...


0

I did this with my first three properties -- I bought them as owner-occupied, lived there for 1-2 years while fixing it up, then converted it to a rental and moved (literally) to the next deal. In order to qualify for a loan on my next property, I simply needed a signed lease that my current home would be rented at a certain rate. A rental history was not ...


1

How do I (and real-estate investors and people considering buying in general) proceed in coming down to a conclusion without attempting to low-ball the seller or aim to high, with such different ranges in hand? You are essentially trying to mimic what a seller does. Before they list the house on the market they ask several agents to prepare a ...


1

I would see if there is an official open register where you can check the taxation value of the real estate. In The Netherlands you can check https://www.wozwaardeloket.nl/index.jsp and get for every address the taxation value of the real estate. Although the market value is often slightly higher than the value listed in the register, it gives you an ...


2

A proper appraisal is not usually done by a realtor, but realtors should know their markets and how to research. Apartments/condos/townhouses are usually much easier to price than single-family houses because there are many comparable units in a relatively small area that can be used to get a good ballpark estimate. Starting with the comparable units you ...


6

But if I live in one and rent one out, the bank only considers me having rental income of $4000. (The bank doesn't consider my rental expenses, but if I rent my own house out, the bank considers the extra income). Actually they will not credit you with rental income of $4000. They will assume that you will sometimes have months where the property is ...


-1

What you are really talking about is negotiating price. It is not illegal to ask for a higher price than you listed the home for based on what you believe the buyers are financially able to pay. As a Realtor I can tell you that in some markets it's better to list the house UNDER market value to encourage a bidding war. This strategy typically results in ...


0

There are advantages to using an agent. A Realtor doesn't just list the house on the MLS. They can also help to keep you out of hot water in legal issues. There are a lot of things buyers can sue for. An agent knows how to prevent them. Using a listing service is certainly an option. You are basically paying an agent to advertise your home without having ...


2

No. No need. This is simply you buying the house at a lower price because it is worth less. It is worth less because it has an intractable tenant that you cannot remove for 1-3 years, and cannot collect rent from, because of a previous landlord-tenant commitment that comes bundled with the property. It would be exactly the same as if I owned a real ...


3

I don't think so, but I would check with an accountant to make sure. You will probably also want to consult with an attorney to draw up a proper lease. Some may say that this is totally avoiding taxes, but it isn't. When you go to sell the property, your cost basis will be less and therefore you will potentially have to pay more taxes then if you had ...


5

This depends on the taxation laws, but generally: If you have invented a trick to avoid taxes, it may be considered inappropriate by the tax authorities. Where I live, this goes as far as this: if you sell a stock and immediately buy it back to optimize your taxation, they won't accept it. Even still, taxation is typically applied to all gains: income and ...


2

Past returns are past, future returns are future. I have no experience in Indian real estate market, but I should mention that any CAGR should take into account inflation. Stocks yield about 6% above inflation. If inflation has been on average at 14-24%, that explains the origin of the high CAGR in real estate. Also, how much time has your father spent in ...


-1

If she doesn't pay taxes then eventually the house will go to auction. Let's say the house is worth $200,000. So the highest bid should be $200,000 but would probably be less. Then the tax would be paid out of this, and everyone gets one third of what is left. If you want to then you and your cousin together could bid say $210,000 for the house. Then the ...


Top 50 recent answers are included