Buying A House, Maybe

[David_Nicoson 1]

Checky, the other reason to put down 20% is to avoid PMI. It's insurance you pay to protect the bank from you defaulting. I.e., it's burning money.

[dapokerbum 0]

What you're really doing here is borrowing money from the bank at 6% or so and loaning it back to them at 0%. I wouldn't (don't) do that voluntarily.

That's not how mine works. They have a set amount that they do based on your prop taxes. Say $300. This is money that is NOT tied to your principal / interest payment. Instead it goes into a different account and accrues interest every year. This interest is then put back into that account at the end of the year. Then any overage in your account that is not part of the reserve that they keep is sent back to you the next year.So say Prop Taxes were $3000 they would want to keep at least 20% in reserves. So after they pay your taxes and add the interest if there is 675 in the account then they send you a check for $75.

[Balloon guy 158]

Checky, the other reason to put down 20% is to avoid PMI. It's insurance you pay to protect the bank from you defaulting. I.e., it's burning money.

good pointProperty Mortgage Insurance is burning money. If you find you can't make the payments, the goburment will step in and bail you out, so why pay for insurance?

[speedz99 145]

you should seriously look at the listings for henderson and LV if this is at all something that you're considering. the prices there these days are mindblowing. i'm basically looking at places 3-4x my parents' place for less than half the money, which is why i started even thinking about this idea in the first place. before seeing that, we weren't even considering the possibility of purchasing a house right now.

Not to be an ass, but have you stopped to think about why this might be the case? I mean, I guess if you were considering the move to Nevada anyway it might make perfect sense, but...you know.

[David_Nicoson 1]

good pointProperty Mortgage Insurance is burning money. If you find you can't make the payments, the goburment will step in and bail you out, so why pay for insurance?

PMI protects the lender (not the borrower) from the added risk of the loan. Checky makes himself appear to be a bad risk if he doesn't put down 20% and the lender passes on this cost to him. He doesn't have an ethical obligation to appear like a bad risk. Since he's not getting any protection anyway, he's not leaning on the government for extra protection as you imply.

[David_Nicoson 1]

That's not how mine works. They have a set amount that they do based on your prop taxes. Say $300. This is money that is NOT tied to your principal / interest payment. Instead it goes into a different account and accrues interest every year. This interest is then put back into that account at the end of the year. Then any overage in your account that is not part of the reserve that they keep is sent back to you the next year.So say Prop Taxes were $3000 they would want to keep at least 20% in reserves. So after they pay your taxes and add the interest if there is 675 in the account then they send you a check for $75.

I didn't know anybody got interest of their escrow. Do you know what your rate is? Just poking around the net, 1/4 of the states require escrow accounts to pay interest and mostly the escrow holders do so only if required. Does anybody know if Nevada is one of those states?

[hblask 1]

Why would you put additional money against the principal? I always thought that if you had a 5% mortgage, that if you put any additional money into some sort of investment account that you would be money ahead.Don't most long term investments make an average of 10%. Obviously not in the last year or anything, but wouldn't it make sense to use all the money that you were going to pay down the mortgage with and transfer that to some type of investment account that could possibly make you 10% on your money. This way you have some sort of liquidity and at the end of the 8 years that you wanted to pay off your house you could do that and still have money left over.Is this a viable alternative and should it be used?

Theoretically, over the long run, houses appreciate at 4%. A mixed investment in the market will make 7-9% if you invest aggressively, a little less if you mix in bonds. If you leverage your house and all goes according to past averages, yes, you should put as little down on your house as possible, as long as the rate of earning on the money is more than the rate you are paying on the mortgage.But as I pointed out earlier, life doesn't always go as planned. Nobody gets married planning to get divorced, yet 50% of people end up there. So if you are buying a house with the notion that another person will help pay for it, you are already 50% wrong. And if this happens during a time when the market has a downturn or real estate has a downturn, you could be in big trouble. There's no correct answer, but 10% down is slightly risky, 20% down is fine, less than 10% is insanity unless you just have massive liquidity to back up your mortgages, and you know that you might have to bail yourself out, and have the means to do so.Other:As for escrow, I believe it is pretty tightly regulated with how much the banks can withhold and the conditions under which they have to pay interest. For the most part, you don't get a choice unless you own a certain percentage equity in the house.

[gobears 0]

We're actually in the process of buying a home in Aliante - should close within 20 days. We're planning on renting it out, we put 25% down. Based on the #'s, it should cash out positively fairly easily which was our key.We started the process about six months ago and basically concentrated on shorts/REO's. We were outbid on the first home, but it looks like we got the second one which was also a short. Since we were in no hurry, we looked over a bunch of homes and were just out there doing the final inspection on the one we went with.A great resource is the city-data forum for Las Vegas, tons of information on the forum, I basically read that forum for about six months and picked our realtor/mortgage broker from that forum. If the close goes well, then I would be comfortable in referring them. So far, it has gone well but you never know until it's done.An option if you're in the area is ziprealty since they rebate you part of their commission. Also, they have a cool website to find what you're looking for. I went with them seven years ago when I bought/sold in California but decided to go with a local realtor since I wasn't familiar with the Vegas area/neighborhoods.Let me know if you want any further details thru PM - I'd be happy to go over anything with you.

[David_Nicoson 1]

Why would you put additional money against the principal? I always thought that if you had a 5% mortgage, that if you put any additional money into some sort of investment account that you would be money ahead.Don't most long term investments make an average of 10%. Obviously not in the last year or anything, but wouldn't it make sense to use all the money that you were going to pay down the mortgage with and transfer that to some type of investment account that could possibly make you 10% on your money. This way you have some sort of liquidity and at the end of the 8 years that you wanted to pay off your house you could do that and still have money left over.

If you're already itemizing personal deductions, then all of the interest on your loan is deductible. But, avoiding paying interest is always a tax-free investment. So in the case of person who doesn't itemize or only benefits a little from itemizing, that 10% return on a liquid investment is maybe 7.7% after taxes. He's giving up something for a guaranteed return, but not as much as it might appear at first.

[loogie 115]

Beware of houses that are actually human-eating plants disguised as houses.

[checkymcfold 0]

i'm going to be somewhat busy until the weekend, so i probably won't have much to say in here until then. but i really do appreciate all the advice and it's sounding more and more like this is actually going to end up saving money for us over a rental in calgary, in terms of what we need. the remaining sticking points would be:1. whether my gf would actually like to live in that area. she's never been, so i'd need to show her that vegas is only 75% or so hookers and blow.2. whether or not i would get approved for a mortgage with my poker background, even with the gf as a co-signer.3. the gf getting a green card to work in the states, although that shouldn't be tough if the area needs teachers and she's certified to teach there.3a. whether she'd want to teach high school in whatever environment needs the help. teaching is extremely stressful and needs to be rewarding enough, at least sometimes, in order to not make you go insane, and i'd hardly wish that on anyone, much less someone i'm living with, lol.this was all (obviously) very preliminary stuff in terms of looking around, at least for now and i really do appreciate all the help from you old folks .

[MJINK3 0]

Less than 20% down=Mortgage Insurance=wasted money. My wife is VP of Loans Administration at a local bank and her opinion is IF you can afford to put down 20% then do it. You can always play with credit card companies which we used to do before we paid them off on lowering your rates or transferring your balance to a new card which gives you lower rates or 0% on balance transfers . I don't know what payments you can afford but lowering mortgage from 30years to 20 or 15years is also a great idea if you can afford the payments, which is what we just did. 20 years at 4.75%. If you cannot make it 20 or 15 years you will be doing the right thing by making double payments when you can.

[rivergirl 2]

i'm going to be somewhat busy until the weekend, so i probably won't have much to say in here until then. but i really do appreciate all the advice and it's sounding more and more like this is actually going to end up saving money for us over a rental in calgary, in terms of what we need. the remaining sticking points would be:1. whether my gf would actually like to live in that area. she's never been, so i'd need to show her that vegas is only 75% or so hookers and blow.2. whether or not i would get approved for a mortgage with my poker background, even with the gf as a co-signer.3. the gf getting a green card to work in the states, although that shouldn't be tough if the area needs teachers and she's certified to teach there.3a. whether she'd want to teach high school in whatever environment needs the help. teaching is extremely stressful and needs to be rewarding enough, at least sometimes, in order to not make you go insane, and i'd hardly wish that on anyone, much less someone i'm living with, lol.this was all (obviously) very preliminary stuff in terms of looking around, at least for now and i really do appreciate all the help from you old folks .

Firstly, anytime you buy over renting (regardless of costs) you are saving....renting is always you just paying someone else's mortgage so they can profit. By buying, you are paying your own mortgage and will have something to show for it when all is said and done. i've often wondered why people who can buy still rent, i find the concept mindblowing that people would pour money into renting and have nothing in the end.i've only been to calgary once and it was in december. I can't imagine anybody would want to spend any amount of time there in the winter. i'm sure she'll welcome the idea of 110 degrees after spending the last 6 months at -30i find that canadians have the toughest time getting a green card. Make sure you hire a good immigration lawyer.

[David_Nicoson 1]

Firstly, anytime you buy over renting (regardless of costs) you are saving....renting is always you just paying someone else's mortgage so they can profit. By buying, you are paying your own mortgage and will have something to show for it when all is said and done. i've often wondered why people who can buy still rent, i find the concept mindblowing that people would pour money into renting and have nothing in the end.

Renting is certainly better in some situations. There are overhead costs to buying and selling houses that people want to avoid. When their family size changes, they need a different size house. For this reason, many of my peers bought a house for the maximum size they anticipated ever needing. That means that in the interim, they've been paying maintenance, utilities, taxes, and interest on living space they don't need.They'd be far better off renting a one-bedroom or studio apartment, putting the money they would have paid in principle in the bank, and then buying the larger house when they need it.

[Smacciemac 3]

Renting is certainly better in some situations. There are overhead costs to buying and selling houses that people want to avoid. When their family size changes, they need a different size house. For this reason, many of my peers bought a house for the maximum size they anticipated ever needing. That means that in the interim, they've been paying maintenance, utilities, taxes, and interest on living space they don't need.They'd be far better off renting a one-bedroom or studio apartment, putting the money they would have paid in principle in the bank, and then buying the larger house when they need it.

I love having less than $1200 a month in living expenses by renting... That includes rent, all utilities, telephone & internet

[WhiteSpade 0]

Why not buy in Calgary, prices have to be down with oil in the tank.

The average house price right now is $413,000 Calgary Real Estate Market StatisticsThis month, the Canadian Real Estate Agency released their forcast for this coming year, which predicts a 9% decrease in Alberta this year. CREA ForecastBased on their forecast, the average house will be worth $37,000 less a year from now. I am in a position where I want to buy a house in Calgary and have the money to do so, but it's just not worth it when prices continue to tumble. I've always had it in my mind that renting instead of owning is a waste of money - but right now losing 20k on rent sounds a lot better than losing twice that in decreasing home value.

[checkymcfold 0]

other possible destinations have arisen since i started this whole thing--athens, ga (2k sq ft houses on 2-3 acres outside the city for like 85k, lol)charlotte, scasheville, ncany thoughts? i know i seem like a yankee liberal dating a commie canadian, but i did happen to grow up in sw va, and i kind of miss green things.we're actually getting to the point where we're pretty sure that buying is the way to go, and just trying to find a place that's a good fit for both of us both socially where we can get what we want for around 100k. thanks again for all the help, e1!

[Southern Buddhist 1]

Be my neighbor in Staunton, Virginia! 40 minutes to Charlottesville with UVA and good jobs, 2.5 hours to DC, world-renowned Shakespeare theatre right downtown, houses from $75,000 out in the county to about $250,000 nice and in town.Seriously, how important is it to be in a city, or do you want 'burbs? Some friends of mine are doing a very smart thing. They both work in New York City, so they're earning more than $100,000 a year. They wanted to buy in Queens, but condos there were going for $650,000 (insane). So they are building a huge semi-custom house in Charlotte, NC for $300,000 and continuing to live in Queens and collect their six-figure income. They're just renting their apartment, and all their spare cash is going to pay down the NC mortgage. So in a year or two, the house will be finished, they will be utterly burned out from commuting and living in NY, and they'll move to Charlotte to a house with barely any mortgage left on it. Sure, they'll earn probably only $35,000 or $40,000 a year there, but it won't matter because they'll already nearly own their near-mansion free and clear. I think it's pure genius. They've solved the age-old problem of "if the housing is cheap, the local jobs pay shit, and if I work where I can really make money, then the housing is outrageous."Don't go for a 15-year mortgage. All that does is charge you a higher monthly payment for a shorter term. You can accomplish the same thing by pre-paying ... IF you're disciplined enough to do it. What we did was round our mortgage payment up to the next even hundred each and every month. It made taking it out of the checkbook easy, the extra went directly to principal, and since interest is calculated on the principal, the more you knock down the principal the lower the interest costs are. Just by rounding up, we knocked almost ten thousand off our principal, and it was enough to actually make the monthly payment fall noticeably -- which, of course, we ignored and kept rounding up to the original amount, so our pre-payment was getting larger and larger as time went on. In the meantime, if the car broke down or something, we could always just make the minimum payment for a month if we needed to, and no problem. Thirty-year mortgages give you that kind of freedom, but 15-year ones don't. My advice: don't ever borrow at the very top of your limits, because it gives you no room for anything to go wrong. I'm partial, but I'd favor NC or VA over Athens, GA. Athens is a cute, artsy town, but Atlanta is nothing but a traffic hellhole, and damn hot and flat. Get yourself into some beautiful, peaceful mountains. A bunch of my cousins live in the Research Triangle area and really love it. Asheville, as you probably know, is also cute and artsy (in fact, the landscape is stunning), but pretty far away from anything. But that all depends on how close you want to be to real casino action and how close you want to be to interesting cities.But most worth reiterating is the advice about a home inspection (ESPECIALLY if you're buying any kind of distressed property) and not paying PMI, which means you do have to put down 20%. Mortgage insurance is a rip-off, and once your payments have taken you over the 20% mark, you have to chase the company and DEMAND that they take that extra insurance payment off, because none of them do it voluntarily.

[checkymcfold 0]

well, it's worth reiterating that the primary reason for doing this is actually financial, believe it or not--it's just that we can buy SO CHEAP nowadays that it's actually going to be comparable or cheaper than renting where we do now, and i'd get an outlet for my growing desire to actually work on something with my hands again that's not a mouse or a deck of cards. our plans are to live somewhat meager lives for the next 2 years until we get out of debt, then travel lots and lots before we officially grow up, and only then find a more permanent place to live. location isn't really a concern for us so much as cost, really, is what i mean, though obviously we'd rather move somewhere nice and fun than not.we're probably just going to make a list of the places hiring social studies high school teachers for next year and throw darts at it to see what sticks, lol.

[Balloon guy 158]

other possible destinations have arisen since i started this whole thing--athens, ga (2k sq ft houses on 2-3 acres outside the city for like 85k, lol)charlotte, scasheville, ncany thoughts? i know i seem like a yankee liberal dating a commie canadian, but i did happen to grow up in sw va, and i kind of miss green things.we're actually getting to the point where we're pretty sure that buying is the way to go, and just trying to find a place that's a good fit for both of us both socially where we can get what we want for around 100k. thanks again for all the help, e1!

athens, ga , beautiful green area, bad traffic, bugscharlotte, sc, Beautiful old houses, bugs, alligatorsasheville, nc, lots of pretty countryside, bugsMy daughter was living in Goose Creek SC for a year and I went to visit them twice, I really liked Charlotte, great city, good cigar stores.But lots of bugs

[checkymcfold 0]

athens, ga , beautiful green area, bad traffic, bugscharlotte, sc, Beautiful old houses, bugs, alligatorsasheville, nc, lots of pretty countryside, bugsMy daughter was living in Goose Creek SC for a year and I went to visit them twice, I really liked Charlotte, great city, good cigar stores.But lots of bugs

they're called african americans, racist.

[AAsnake88 0]

they're called african americans, racist.

loooool

[Suited_Up 2]

Fuck the south!

[David_Nicoson 1]

Don't go for a 15-year mortgage. All that does is charge you a higher monthly payment for a shorter term.

Again, it also reduces your interest rate. On a 100K loan, that extra 1/4 percent over 15 years means $2,355. It's entirely possible that the flexibility is worth for you, but it's not exactly the same money.

In the meantime, if the car broke down or something, we could always just make the minimum payment for a month if we needed to, and no problem. Thirty-year mortgages give you that kind of freedom, but 15-year ones don't. My advice: don't ever borrow at the very top of your limits, because it gives you no room for anything to go wrong.

I agree with that last sentiment completely. I bought a modest house on a 15-year loan, which is another way to achieve that same thing.

[Balloon guy 158]

they're called african americans, racist.

funny how you open minded liberals see racism all the time.I wonder why..............