Ask MetaFilter questions tagged with finance and home

Car Conundrum

ecorrocio — Thu, 24 Sep 2009 08:32:42 -0800

TO CAR OR NOT TO CAR (buy that is). Help me figure out when to replace our paid-for-but-aging-vehicles. What's the best way to time this unwanted expense over 5 years, especially with a young driver in the wings. Here's the puzzle:

A. We have two paid-for vehicles - a Ford truck with 90K miles, a Soobie with 130K miles. They're getting old. The truck is probably not as safe as I'd like. But... I really like not having a car payment.

B. Our daughter will be 16 in 5 years. I want her to have a (safe) car.

C. I'd like to figure out how to best spread the expense of buying cars vs. the life of cars, keeping the impact on our somewhat tight budget as small as possible.

D. I'd like to get cars of reasonable quality and safety, but would not buy a new car. My wife and I both need a car.

~ Do I get one now to spread the expense (even though both cars are workin' fine)?
~ Do I drive 'em til they drop, and then face buying 1... 2 or 3(!) cars.
~ Do I work out some sort of rotation?

Use cash to start a business or for a down payment on a home.

mintchip — Tue, 01 Sep 2009 18:40:50 -0800

Use cash to start a business or for a down payment on a home. I have been interested in having my own business. I have read business magazines for years and have even had a couple of small service-based businesses that I ran part time. No big bucks there but a rewarding experience.

Recently I've been considering trying to start a business for real. I have a small sum of cash (between 10-20k) I've been slowly saving for a home down payment.

It's a tough choice. Since I need a home to live in, buying one would mean an investment in my future and security. However, chances are that I won't get rich working for a private company. In fact, it's quite hard to get ahead nowadays with most of the good middle management positions gone. Meanwhile, most of the people I've known who did quite well for themselves did it by owning their own business.

I'm not saying it's easy. I'm just thinking that owning a business seems like my best shot at getting ahead, and it also happens to be a genuine interest of mine. At the same time, starting a business is a huge risk (I think it's something like 4 out of 5 fail within 5 years) and I could lose the money as well as a lot of time and energy.

I believe I have many of the qualities that would contribute to success in business. But it's hard for me to know if I have all of them.

What's your take? How have those of you who have been in a similar position weighed the pros and cons of such a decision.

$20k Loan on $79k Home?

rougy — Mon, 17 Aug 2009 17:19:48 -0800

House loan advice needed. Should I take out a loan against my house while I'm trying to sell it? I need some help from some people familiar with numbers and money.

I'm between a rock and a hard place. The only good thing I have is my house, which is completely paid for, and recently appraised at $79k.

It's for sale, and I think it will sell within the next three to six months—twelve months tops—but I'll need some resources to keep me alive during that time.

I'm thinking of taking out a short-term, two-year loan for $20k and living on the money and using that money to pay back the loan until the house sells, but I'm not a money person and I don't know if that's a wise move to make.

I could really use some good advice. Thanks.

Why do I feel so weird about owning this home?

gocubbies — Wed, 08 Jul 2009 16:03:25 -0800

Why do I feel so weird about owning this home? Here's the long story (as short as possible): My wife and I are both 24 and we recently bought our first house. We've been married for one year and lived together for one year before that. We've been very good savers (over 50% of each paycheck) and before purchasing the home we had very little debt (only about $8K for a car).

We did not receive any financial support from our parents (other than for undergrad tuition). What makes me feel very strange is that multiple people have commented on how large our house is and how good of a job I must have. I make a little more than $67k and my wife makes about $34k. We bought the house new and it is two stories with a finished basement and 5 bedrooms. We have no kids yet, but plan to live in this house for 30+ years and raise a family in it.

Here are a few remaining details. We paid $324k for the house with 10% down and we'll be receiving another $8k for being a first time homeowner.

Hearing people comment on the size of the house makes me feel awkward and undeserving. My take on this issue is that my wife and I saved well and didn't buy any "toys" when we finished school: no motorcycle, no flat screen TV, no boat, no nothing (with the exception of the car mentioned above). We never moved back home after school, but saved money by living in an inexpensive apartment for 2+ years. I finished college a semester early, too.

My job pays well, but not extremely well like some may think. I started working for the company when I was 20 and have had two promotions and two raises.

Am I right in justifying how we were able to afford this house or is there something I'm missing? Is it normal to feel like I don't deserve this?

Have lots of money, but denied mortgage, what now?

Anonymous — Sun, 05 Jul 2009 20:58:17 -0800

My fiancee and I recently applied for a mortgage on a $200k property in Portland, OR. We have a lot of assets (at least I think so), but were denied for a mortgage loan where we would have put 20% down. Why, and what can we do about it? [Posting anon because of personal finance information]

Right now we have approximately $75k cash on hand, $15-20k equity in our current home (which we are selling), we own $100-150k worth of undeveloped land in northeast Georgia, a car that is paid off (worth $19k on KBB), and zero debt. We both have excellent credit ratings.

She is a freelance web designer (telecommute) and pulls in $45-60k per year. I'm a grad student on a $16k salary, working on an MS which I will receive next May. In the past I have made $44k per year, so I'm not too worried about job prospects.

We are both still a little stunned that we were denied the loan. The loan company just refused us flat out, didn't even send the application to the underwriter. They said that our combined salary wasn't enough to get approved, since my fiancee is self-employed but has only been officially this way for the past couple months and they can't include her former salaried position as income on the loan application, which we don't really understand since money is money (?). She has been pulling in more than $40k/yr for the last 5 years.

(FYI, she currently has an arrangement to work nearly full time, at a higher hourly rate, with her former full time employer... the only reason she's not on their employee payroll anymore is because we moved out of state, and due to some complication in tax law they had to move her to contract status).

What can we do now? Should we apply with another company?

I feel like we are in excellent financial shape, with enough money to put 20% down and still have $ left over to cover 2+ years of mortgage payments!!! Like what the hell, is anybody getting a mortgage these days?

Perspective on financial struggles

Anonymous — Wed, 28 Jan 2009 11:53:12 -0800

I am trying to gain some perspective on why, at the age of 48, I still cannot seem to make any progress financially or manage our money well. I am trying to gain some perspective on why, at the age of 48, I still cannot seem to make any progress financially or manage our money well. After years and years of trying to "get it together", I know I need some fundamental change in my whole sense of money. I'm a pretty right-brain person, but feel I should be able to do this.

Some data:
~ My wife and I make a combined decent (I think) wage ($80K+)
~ have only $10K in debt, aside from our house ($1300/mo)
~ We have home equity ($175K)
~ middling retirement savings ($150K),
~ next to nothing saved for my 10 year old daughter's college (!!),
~ and little accessible regular savings.

So, something put aside, but we are always living paycheck-to-paycheck. Always a little behind in bills. Always a little overdrafted on our account. We don't spend extravagantly, hardly ever buy much at all. I have tried budgeting, tracking, cash only methods... but never gain ground.

Some questions I have would be:

1. Is this typical? Or are we among a small percentage of working professionals?
2. People I know, who have similar incomes, seem to have far more ready cash, are able to take vacations etc, and don't drive the ancient vehicles we do... why?
3. Am I lvin' in the past, and $80K just ain't what it used to be?
4. Can anyone recommend books or resources that can help me change my approach, my outlook, my sense of money? Not so much systems of financial management, but something fundamental...

Thanks

Go on take the money and run?

ian1977 — Mon, 18 Aug 2008 18:51:52 -0800

Use the new Federal Housing Tax Credit as an investment seed? Is there anything fundamentally wrong with this idea?:

Take the new Federal Housing Tax Credit and dump the $7500 into a Roth IRA. Repay the 'credit' at the normal rate (~$500/year for ~15 years I think).

This seems like a no brainer to me, but I am not very financially savvy. Its essentially a no-interest loan, so it I would think that investing no-interest money is a win-win, but then again, I'm dense enough that I once thought I had a system to beat a casino's video roulette machine. (long story short, I emphatically did not)

Thoughts? Is there a better way to optimize the 'credit'? Is it best to leave it alone?

Bonus points for finance/investment gurus: Assuming moderate gains (8%???), how much ahead am I by being able to invest the $7500 up front, versus the alternate scenario of investing $500/year for 15 years.

Family of four, moving to Bay Area, making $115K. Is this crazy?

Anonymous — Sun, 27 Jan 2008 23:11:58 -0800

Family of four, moving to Bay Area, making $115K. Is this crazy? I live outside the US. I have been offered a job in Mountain View making $115K, which is a lot anywhere else except the Bay Area it seems. I have the potential to make $30K+ in bonuses annually, but bonuses don't pay the mortgage. I would have ~$300K in home equity to make a down payment on a house. So my question is two-fold: one, can I actually live a reasonable life on this much money in the Bay Area? 1100 sq ft 3-bedroom houses seem TINY to me. Is this really the best I can expect to be able to own? The second question I care less about, but of course the big question is whether buying a house in the peninsula in the next few months is bad timing. But I'm a believer that you cannot time the market, so really it's the first question I care about. Can I, my wife and 2 kids live in a nice neighbourhood for that much money? (Finally I would have a relocation package, so transaction costs are not an issue, just making monthly payments on somewhere worth living and not having to eat beans, as much as I enjoy them).

Shopping The Mortgage

escher — Wed, 02 Jan 2008 22:23:36 -0800

How and when do I "shop" a mortgage? (first-time buyer questions inside) So, I've got a lender I'd like to work with (found via referral). But I want to make sure that I'm getting a fair deal, so I'd like to "shop around" and see that the rate/closing costs/points/etc that I'm getting are competitive. But I'm not sure when or how i should shop the mortgage. Do I call and compare before i've found the home, after my offer has been accepted / entering contract, or what? Basically, I'm looking for a timeline of the loan process when buying a home with regards to shopping lendors. And how does "locking in" a loan figure into this?

Who Has To Pay?

slowtree — Mon, 05 Nov 2007 12:14:50 -0800

Who is responsible for power line repair? Recently bought a house in the northern Kentucky area. Noticed last week that a tree on my property has rubbed the power line coming from the street into my house raw. I know i need to contact the power company but I am a little nervous about how much and who is responsible for the cost of the repair work done to the lines?

How To Save Money

slowtree — Thu, 16 Aug 2007 18:28:14 -0800

Car Insurance + Home Owners Insurance = Saving $$ ? Purchasing a first home in the Bellevue Kentucky area. Looking into home owners insurance with a umbrella policy for 1 car. The house would probably appraise around $130,000 and the car is nothing you would look twice at. assuming we went with an HO2 policy (if i even have that correct ) what would be a good estimate on the total cost of a policy? I currently spend about $75 a month on car insurance, is it smarter to roll it all together? would i save money?

How do you prove you used IRA money for home purchase?

boognish — Fri, 04 Aug 2006 07:10:28 -0800

Tax laws allow you to withdraw money penalty-free from your IRA up to $10,000 if you use it towards a first-time home purchase. We just got the check -- my question is, how do we prove later on that we did use the money for the house?

Stated Income Home Loans

Instrumental — Tue, 29 Mar 2005 10:31:05 -0800

My wife and I are applying for a home loan. I recently started my own business while she has a normal job. Should we choose a "Stated Income" or a "No Income Verification" loan? Our loan broker suggests using a Stated Income loan by adding our two real incomes together and saying it is her wages. This seems like lying to us....what do you think? A No Income Verification loan is $10,000 more....

Financing a Fence

benjh — Wed, 13 Oct 2004 08:42:52 -0800

New Home Filter: I just bought my home, and want a fence for the back yard. I've received a couple of estimates, but don't want to pay cash, preferring to keep cash on hand for an emergency. Would a loan to finance be better, or a credit card? Are there other options? I plan to pay off within a year.

Quick real estate transactions

jdroth — Thu, 06 May 2004 11:23:32 -0800

So yesterday my wife — Ms. We're-Not-Moving — found a house closer to Portland that she loves. We both love it. The only offer we can make, though, is contingent upon selling our home, which we hadn't even considered until yesterday. Help! Does anyone have experience with this kind of thing? What can we do to make a contingency offer more attractive? What about bridge loans? Anyone have experience with those? I need advice on hurried real estate transactions (other than "don't do them").