Ask MetaFilter questions tagged with finance and house

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?

Liquidating an estate in the USA... in today's economy. Shouldn't we just wait a while?

Anonymous — Sat, 21 Jun 2008 07:33:00 -0800

How should we handle liquidating assets in an estate in the USA right now? Assets consist primarily of a stock portfolio and a house. My father recently passed away, leaving behind an investment portfolio worth about $650,000 and a house valued at $300,000. This will be split 6 ways; four of the inheritors have expressed a preference to liquidate everything straightaway and wash their hands of it.

Aside from the emotional issues the other 2 inheritors have with rushing into this, we are wondering financially what is the best way to handle this given today's market conditions. My understanding is that housing prices are very low, and we can all see what's happening with the stock market. My first reaction is that now is an extremely bad time to be liquidating any assets from a strictly economical perspective; this view is what I am asking for your feedback on.

None of us are very experienced in financial matters; we plan on searching for a financial advisor next business week, but in the meantime I would appreciate any informed advice about how we can best retain the value of these assets as we decide how to handle the estate.

Specifically:

1) Should we sell the house now and take what we can get, or is it likely that we could get more value from holding on to it for a year or so and possibly trying to rent it in the meantime? I think that there are two factors that would contribute to the house being sold under value: today's market conditions, and the desire on the part of the executor of the will to sell the house as quickly as possible regardless of any loss. At least one of these seems avoidable, but if the market is expected to worsen, it would be an advantage to sell it now. No one plans to live in the house, but there are local family members who have offered to help with its care and administration if needed.

2) Same as above for stocks; I have not yet seen the contents of the portfolio, but am inclined to believe that after the November elections, there is a good chance the economy will be positively affected. We also know that the portfolio consisted of low-risk stocks aimed more at stability and long-term returns. Should we wait and see, for this or any other reasons, or should we cash it in now in case things get even worse?

3) The biggest concern: what happens if the 6 beneficiaries disagree on the questions above? One of the four who wants to eat the whole cake now will have power of attorney by Monday. If the two of us strongly disagree with his opinions on how to handle the assets, what happens?

More important background: the 4 who want to take the money and run are all 40-something homeowners who are married with 2 or 3 kids apiece, have Masters degrees, are stably employed in long-term careers, and generally already have all the security they could ask for as far as I know. We (the other two) are in our early twenties, have bachelor's degrees, are employed but with very modest salaries, and are unmarried. I think these differences are serious and, without being selfish, I feel that given that they have so much more security, our needs for the near future should be prioritized. The people who left this inheritance were there to support them when they were our age, and we no longer have any sort of safety net. Side question: is this incredibly selfish of me? I realize that they are probably looking forward to using their share towards their children's college tuition and their retirement funds, but the fact is that a few thousand dollars lost by liquidating sooner than necessary could mean a lot more to the younger beneficiaries. We are not sure why they want to rush into liquidating everything immediately when none of them have any immediate need for large sums of cash that we know of, and certainly no one was anticipating this to happen now.

Again, we will look for a financial advisor and are going to speak with some attorneys in our local network as well, but appreciate your advice in the meantime.

Selecting a Financial Planner: Fee v. Commission

mshields — Tue, 18 Mar 2008 08:11:03 -0800

How should I select a financial planner? Should I find a fee-only or commission-based planner? $150-$200/hour seems like a lot of money to me. My husband and I are looking for a financial planner in the Boston, MA-Portland, ME area.
We live and work in Boston right now. He is an internal medicine resident and I am a holistic health professional. He will finish residency in June of '09 and at that point, we plan to move home to Maine and buy our first home. While we both have student loan debt (consolidated at a low rate), we have also been setting money aside so that we can hopefully come up with a 20% downpayment.
We are good savers, but have been very timid about investments. We are looking to find a certified financial advisor who:
a) can help us reach our short-term goals (move, house purchase, pay of student loan debt);
b) help us set up a solid system for when our income increases significantly;
c) won't charge us crazy amounts of money.
I am hoping to establish a long-term relationship with this financial advisor.
Do you use a financial planner? If so, would you recommend using a fee-only professional ($150-$200/hour seems like A LOT of money to me...) or would you recommend a commission-based professional? And lastly, can someone recommend a CFP in the northeast?
Thanks for your suggestions!

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).

Can I withdraw money for a first-time home purchase with my accounts?

InvestorMD — Thu, 20 Dec 2007 20:43:24 -0800

You can use your Roth IRA for your first time home purchase (up to 10k). However, you must have the account open for 5 years. How is account defined? I have a Fidelity Roth IRA account open for 6 years now. I have a T.Rowe Price Roth IRA open for 2 years. My wife had a John Hancock Roth 401(K) (open 2 years ago) which we rolled over to a T.Rowe Price Roth IRA when she switched jobs back in August.

The rules stipulate that the account must be open for 5 years? Does this included the general umbrella of the Roth IRA or each single account under the umbrella? We plan on buying a home after I am done with medical school. We were thinking to put some more cash into our Roth's for the time being and wanted the flexibility of withdrawing our CONTRIBUTIONS for a down-payment if needed.

On a side note, can this money be put back or will that count as new contributions? I expect my income level will make me ineligible for contributing to a ROTH after I'm done with the 3+ years of medical school and 4-5 years of residency. Hence, why we are trying to contribute as much to get ahead start.

Should we save for down payment or pay off our student loans?

esolo — Mon, 11 Jun 2007 12:20:28 -0800

Should we save for down payment or pay off our student loans? and what about retirement? My partner and I want to buy a house soon. He is a young professional and I am a grad student. We are both recent university grads and are working towards paying off our school loans. The interest rate on these is about 8% (it’s a private bank loan). I am confused as to how to divide up the little money we have between paying off the education loans, saving for retirement and saving for the downpayment. What is most logical money-wise? Not to save for either retirement or downpayment until we pay off the loans in full, because we are not likely to make more than 8% in anything else? But then it may take a while to pay them off (approx. $25,000 to go).

I heard that many people save for downpayment in ING savings account (if the purchase is less than 5 years away). ING savings account pays 3.5-4% in Canada, so it doesn’t seem to make much sense to do that, when we are paying 8% on our education loans. Is the better approach just keep paying off as much of education loans as possible, and then just take out the mortgage with zero downpayment? (The rates on the mortgage are low now, so we could get 5.5% rate right now).

One option would be to keep paying off the education loans, until we find the house we like, and then just take out a large mortgage and cover the education loans in one shot. This way, we will only have one large relatively low-interest debt. Has anyone done this? Any advice and suggestions would be appreciated.

Capital gains relief

knave — Wed, 30 Mar 2005 17:00:36 -0800

TaxFilter: Do I meet the "unforeseen circumstances" requirement of the Taxpayers Relief Act for capital gains on my house? The situation: My S.O. and I have broken up, and she's moving out. She was contributing toward the mortgage payment, which will now become a significant burden for just me. I'm the only owner, she was not co-owner, and I've lived there for 14 months. If I sell the house in the next month or two, do I get any tax break?

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").