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re: Better to spend all of savings and be debt free or full of debt with lots of...
Posted on 4/16/13 at 4:30 pm to FredSecunda
Posted on 4/16/13 at 4:30 pm to FredSecunda
If your income is sufficient to qualify for the two home loans, why are you so lean on liquidity?
I suspect (could be wrong) that spending may be the bigger issue in which case I can't see two mortgages being a good idea.
Sell the house, take your hit and get disciplined once in the new house with one mortgage on building that cushion.
I suspect (could be wrong) that spending may be the bigger issue in which case I can't see two mortgages being a good idea.
Sell the house, take your hit and get disciplined once in the new house with one mortgage on building that cushion.
This post was edited on 4/16/13 at 4:32 pm
1
Posted on 4/16/13 at 4:44 pm to Tiger4Ever
If you are out moving of town don't rent.
There is always something to deal with...
There is always something to deal with...
Posted on 4/16/13 at 5:16 pm to townhallsavoy
Debt is kind of a personal thing. I treat paying down debt as an investment. If I am paying off a 8% personal loan, that is a guaranteed return on investment of 8% after taxes, which is very very good these days.
A mortgage maybe not so much. I'm trying to mortgage as much as I can right now at 30 year fixed rates, the idea being that after the tax deduction the effective rate is only a little above 2.6%. That's basically the rate of inflation, for 30 years. There is no need to pay more than the minimum required on such a loan.
Interestingly, a lower rate loan with a shorter term (like a 15 year mortgage) may not be as good because your larger payments have a return below the rate of inflation.
If all that is confusing, the best thing to do is stick with what you do understand and learn as much as you can. Paying down debt is rarely a terrible thing but it sometimes isn't the best thing.
A mortgage maybe not so much. I'm trying to mortgage as much as I can right now at 30 year fixed rates, the idea being that after the tax deduction the effective rate is only a little above 2.6%. That's basically the rate of inflation, for 30 years. There is no need to pay more than the minimum required on such a loan.
Interestingly, a lower rate loan with a shorter term (like a 15 year mortgage) may not be as good because your larger payments have a return below the rate of inflation.
If all that is confusing, the best thing to do is stick with what you do understand and learn as much as you can. Paying down debt is rarely a terrible thing but it sometimes isn't the best thing.
Posted on 4/16/13 at 7:22 pm to foshizzle
Always listen to Foshizzle when it comes to debt and interest rates(among other things) 
Posted on 4/16/13 at 7:45 pm to townhallsavoy
My advice would be to cut your losses, and sell. I'm not trying to be a dick, but if you only are able to save 15k over the course of a few years (with that low of a mortgage) then I don't think you have enough income/capital (or if you have the income, then discipline to control spending) to be a landlord.
Posted on 4/16/13 at 7:52 pm to townhallsavoy
if the offers are market based and you have to move, then sell and move.
A house is not an investment; it is a place to live.
A house is not an investment; it is a place to live.
Posted on 4/16/13 at 8:18 pm to Teddy Ruxpin
quote:
What's with the rash of posters creating their own accounting rules?
that truly had me
Posted on 4/17/13 at 10:30 am to makersmark1
quote:
if the offers are market based and you have to move, then sell and move.
This may be off topic, but I feel like our house is above the market of our area.
We're asking $174k, and the houses in the neighborhood have sold for around $160k-$165k. I actually went and toured two of those homes that did eventually sell, and they needed work.
My house needs zero work. Zero. The roof is three years old. The hardwoods are three years old. All neutral colors on every wall. Carpet is one year old. Landscaped yard. The works.
So when the realtor said, "Based on the nearby homes..." I assumed I could get at least what I owe on the house ($167k). Definitely not going to accept offers that range from $155k-$165 and ask me to pay everything except their down payment.
Posted on 4/17/13 at 11:44 am to townhallsavoy
quote:
If I get shat on by my renters and then can't fill the house with people, we couldn't afford two mortgages for very long.
My advice would be to sell then, take your lump at closing.
After 8-9k at closing, is 95/5 on conventional not an option? Figure in another 1% for cost on a 140k home could you not put down roughly $8400?
Posted on 4/17/13 at 2:43 pm to ItNeverRains
quote:
My advice would be to sell then, take your lump at closing.
After 8-9k at closing, is 95/5 on conventional not an option? Figure in another 1% for cost on a 140k home could you not put down roughly $8400?
Selling has been difficult.
I won't have $8400 if I sell.
It's possible that with the way the market is right now, I may not even be able to buy after I sell.
Posted on 4/17/13 at 3:23 pm to townhallsavoy
quote:
It's possible that with the way the market is right now, I may not even be able to buy after I sell.
Rates are staying around 4% on 30 until 2015 according to every economist I've seen.
If you can't tuck 10k away for a house by then, probably shouldn't buy.
If 170k house today is 200k by then the difference monthly is about $125 at said rate.
I wouldn't panic
Posted on 4/17/13 at 4:54 pm to townhallsavoy
Have you looked at having your employer recoup some of the relocation costs? Many competitive companies provide some assistance.
My father in law was relocated right as the housing market crashed. It took him over a year to sell, and it affected his ability to movie. His company offered to buy his house and sell it for him if he couldn't sell it after a lengthy period of time.
Obviously those circumstances are probably unique, but it may not hurt to ask for some extra cash.
My father in law was relocated right as the housing market crashed. It took him over a year to sell, and it affected his ability to movie. His company offered to buy his house and sell it for him if he couldn't sell it after a lengthy period of time.
Obviously those circumstances are probably unique, but it may not hurt to ask for some extra cash.
Posted on 4/18/13 at 9:46 am to Bmath
quote:
Have you looked at having your employer recoup some of the relocation costs? Many competitive companies provide some assistance.
My father in law was relocated right as the housing market crashed. It took him over a year to sell, and it affected his ability to movie. His company offered to buy his house and sell it for him if he couldn't sell it after a lengthy period of time.
Obviously those circumstances are probably unique, but it may not hurt to ask for some extra cash.
I work in education. The only thing my employer provides is other people's children.
Posted on 4/18/13 at 9:51 am to townhallsavoy
Are you switching school within the district or are you moving towns?
Posted on 4/18/13 at 9:59 am to OnTheBrink
quote:
Are you switching school within the district or are you moving towns?
Moving towns. Well...to be more accurate, moving across town.
It takes an hour for my wife to get work from where we are now. Will take me a little over an hour thanks to traffic.
Posted on 4/18/13 at 10:02 am to townhallsavoy
quote:
Moving towns. Well...to be more accurate, moving across town.
It takes an hour for my wife to get work from where we are now. Will take me a little over an hour thanks to traffic.
Honestly, I would stay put. I was kind of under the impression that you were moving towns/out of state, but since that is not the case, I would sit tight until you (1) build up the funds to be more secure in your decision and (2) get a little more equity in the house while you wait.
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