SPD, you just caught something big She can't withdraw from her 401k using the hardship clause or the 1st time homeowner provision because her name won't be on the papers. Moreover, vested or not, she must repay the loan within 30-60 days following termination, or face regular penalties when she files her taxes. Since J clarified that she's working PT, and they'll live together, it's certainly worthwile to work FT or as many additional hours as she can NOW. I can't imagine your having favorable rates this soon following bankruptcy; don't you care about the loan shark interest rates on cash advances? When she maxes out her cards, her FICO will dive and the rate will spike further. Are you willing to take the better path of working extra hours and saving a bit more, and avoid withdrawing from the 401ks and CCs? Otherwise the smallest problem will put you in the poorhouse.
SPD, you just caught something big I can't imagine there could be that much money in her 401k working PT. Unless she's been there 10-20 years. It's just a really bad idea withdrawing from the 401k and maxing out her cards. If her name is not on the paperwork you will not be able to use her 401k to show cash in reserves.
This is why I will not wait anymore. Why save? Median existing home sales price in 2003 Jan $160,200 Feb $161,300 Mar $162,100 Apr $163,700 May $166,400 June $175,000 July $182,100 U.S. median home prices New homes 1990 $122,900 2004 $202,200 (projected) Existing homes 1990 $92,000 2004 $174,500 (projected) In the area I live in, median is in the low 200's. If I had to do the last dozen years over again I would have maxed out 75% of my credit cards for a down payment on a high interest mortgage. And then with a few years of equity re-fi. But who knew? At what point during that time period did it make sense to save more money? From March 2003 to July of 2003 how much money did I save? How much did homes go up? Should I save up for 1,2 or a few more years? Also at what point did it make sense for anyone with a low to middle income to save more money during these times? $10,000 towards rent a year without the tax advantages and ZERO equity times how many more years of saving? Also there is another chart that has incomes vs homes over the years. I don't even need to post that because we all know what happened and will. In my opinion at this time I would say put the chips on the table and play the game while it can still be done. I know over 90% would say save and wait because it is the right thing to do. I wouldn't agree with that at this point though. I think its time for action, expensive but still doable. The future? Who knows. If anyone wants to tell me I couldn't be more wrong then go ahead, I don't claim to be an expert on this and I wouldn't advise anyone to follow this plan. It is risky but still doable. Maybe someone else thinks this way somewhat? Tap the 401k? Subject: Mortgage, How dumb is this idea? It is a discussion board and I won't bite, I like advise or comments.
Re: Re: Mortgage, How dumb is this idea???? Right now we have NO credit card debt, both of us. I was thinking about 4k on her credit cards. Cash advance? No, I was thinking the next $4,000 I would spend in the near future would be charged instead of cash. Intrest rate around 15%, $4,000 cash. The 401k loan would be around 5.25% I think. Actually, Why would I marry her after this? Her 401k would be half cleaned out, her credit cards would be maxed and I would be debt free with only a mortgage. Who would care at that point if she loses her job. I wouldn't, Why keep her around? She was great for the down payment. After all I am a typical male! JUST KIDDING!
Re: Re: Mortgage, How dumb is this idea???? 1. Before you go and screw up that poor girl's credit, possibly for life, at least go and marry her. 2. When looking at numbers remember, statistics can be made to prove anything. In your case, for it to be a meaningful comparison, you have to use dollars that have been adjusted for inflation. The NYTimes recently published #'s for 'median existing SgleFam home prices' for locations all around the country. National #'s are: 1983 - $68,001, 2003 - $164,000. Reasonably close to what you've quoted - and pretty daunting as you've pointed out. But adjusting the 1983 value for inflation you get 1983 - $121,001! An increase of "only" 34.8% in 20 years. Something more managable. 3. From what I've read, most of the housing pundits expect the recent price skyrocket to cool with the rise in interest rates and for things to level off and even go down in some places. This of course greatly depends on local factors. 4. The purchasing power rule-of-thumb is 3x your annual income. 35K x 3 = $105,000 + whatever down you have. $170,000 seems to be stretching it quite a bit. Remember, if you want to count your GF's income (even if you legally can) you have to use her FICO. Now if you've maxed out her cards for the down payment and caused her scores to tank... 5. What are you/her going to do when (not if) her CC companies freak out because of her massive debt increase and jack up her rates to 18% or 22% and jack up her minimum payments. It ain't gonna be no 20 bucks a month. Can you afford $600+? Plus all the other what-if's mentioned: illness, accidents, natural disaster destroys local economy, your GF meets a millionaire and dumps you? Everbody to whom this's happened to at one time said "never to me." 6. I don't know a thing about you and don't want to be presumptious but perhaps a better investment at this time would be in yourselves. Take on some debt, if necessary, to learn a trade, finish college,... something that will increase your purchasing power so you won't have this dilemma in a few years.
Re: Re: Mortgage, How dumb is this idea???? zerodown, thanx 4 the post and time into it! #1 She is at $0 debt right now. Maybe $4000 in the future with this idea. $4000 is probably around average with that income. Not terrible or good. #2 I got the information on housing prices from USA TODAY 8-26-03. July median jumped to $182,100 in the U.S. The $164,000 area was a long time ago April 2003 LOL. Wouldn't that push the inflation vs income vs home prices to a disturbing number? Alot higher than 34.8%. #3 If interest rates go back to where they were 3 or 4 years ago it will for sure cool off the rising home prices. Just imagine how much more money would be towards interest on 30 years or less at that point. Waiting for this to happen? Maybe not to good. Waiting and saving wouldn't do much good at that point. #4 I was thinking a stated income mortgage (lie) in just my name and would not use her to qualify. Unless there is another way. Her 2 year discharge is not until December 2004. #5 If the creditors changed terms couldn't she just close the accounts and go by the old terms? I don't think the sudden rise in rates or payments would take effect if the accounts closed. $4,000 isn't that bad though. #6 Yes you are right and we both should have done that years ago. The 20's for us were mistakes and what is done is done. Putting this off another 3-5 years and then paying the debt back will get us right back to where we are now. How many years would that take, and then saving on top of that with the rising prices vs inflation, and possible rising interest rates? Plus more years on top of that. I still think roll the dice now and get in while we still can.
Re: Re: Mortgage, How dumb is this idea???? Good luck. With a 30 year fixed rate mortgage and 5% down on a $170,000 home you're still looking at $1,300-1,400 a month including PMI and property taxes. If you can't afford to save how are you going to pay that on $35k a year? And btw, 5% on a $170,000 home is more than $4,000. And when do you plan to start paying back that $4,000? Have you figured out what your monthly payments on that card will be? I hope you don't ever miss a payment on that card.
I guess I wouldn't "rob Peter to pay Paul". I have done this and seen others do it....it never works out. The best way to come up with the LTV number that your looking for is to find a property with some equity built in. Now I don't no where your from but one "redneck" way of doing it would be to do a new construction loan with say a nice 3 or 4 bedrrom manufactured home and a nice lot somewhere. the most you'll pay for this in a nice neighborhood would be around 100k. 1*The thing is though, it is already worth twice that as soon as its switched from a title to a deed. snakeman ================= 1*A 100 % instant increase in value and they call this depreciation on a manufactured Home. THE END ** *** ** LB 59 """"```--~~~~~~~~~--```'""'''
1*do a new construction loan with say a nice 3 or 4 bedroom manufactured home and a nice lot somewhere. The most you'll pay for this in a nice neighborhood would be around 100k. The thing is though, it is already worth twice that as soon as its switched from a title to a deed. 2*If its all been borrowed to secure the 170k home you want, then what happens if you need more in an emergency? snakeman ================= 1*Here we have a $200,000 house going for $100,000. 2*And here we have a $170,000 house going for $170,000. A few questions 1*Can any one tell me the unit price for each of these homes? 2*Why would anyone want a $170,000 home when they could have a $200,000 home for $70,000 less? THE END ** *** ** LB 59 """"```--~~~~~~~~~--```'""'''
The house we're having built is about $113K without all the outside stuff like landscaping and driveway and without finishing the basement - all things we can do later. (and it meets all the square footage requirements of the community) The land we STOLE for $11K (2 acres on the lake) in a gated golf/swim/lake community. I think the owners were tired of paying the POA fees every year on these two lots - they live in a different nearby lake community. When the house is done, the combo of land/house should be worth well over $200K and probably closer to $300K. If we can get dock approval, it will be worth even more. Average price of an already built house in this community is $350K. (and most of those are on dinky lots, not 2 acres). I am sooooooo looking forward to getting this done. That's why I'm working so hard on this. Average price of a .25 acre lakefront lot is $40K. And by the time we get the house built, we'll have less than $150K in it. Since we already have the land, I can wait the 8 months they want to approve the building loan. Just gives me 8 months to fix the credit.
hehehe Yeah, I was trying to be brief. There will be a driveway - it won't be paved right away. The land is in the woods, so landscaping the whole property isn't necessary. Most of the people around here have a very small area that's landscaped right around the perimeter of the house, and the rest is very natural and wooded, and our property is adjacent to a protected wildlife area so I plan to keep most of it very natural anyway. It's a beautiful piece of land without any landscaping at all. It's not like a regular subdivision in town. It's like forest with a cul-de-sac built into it. We just need to clear enough trees for the house and driveway to start with.
Re: Re: Re: Mortgage, How dumb is this idea???? Actually I have $$$ besides the help of 4k on her credit cards and her 401k loan. She could work around 10 more hours a week for about 8-10 months to pay off the 4k on the credit cards. It isn't 35k it's 55k EASY with her income. I just can't use her because her 2 year discharge point is to far away.
Re: Re: Re: Mortgage, How dumb is this idea???? At what point is it a good idea for ANYONE to try to get a mortgage? After more thought into this I still haven't changed my mind. I could worry about the following and rent and save forever or get in now. I could die She could die One of us disabled I leave her She leaves me One of us goes to jail innocent Any medical reason Lose my job Lose her job One of us goes nuts At least 100 more possible situations could follow and at what point does it stop? Worry yourself to death and rent forever? How much insurance should be spent from income to prevent anything? Is anyone really safe?
Re: Re: Mortgage, How dumb is this idea???? Hi, I have been following this thread and have some interest in the building idea and your last comment on 100% depreciation. Can you explain? I just made an offer on a property with a manu home on it. The property is what I'm after but the home is very nice and will work until I decide to rebuild. I have also looked at some inexpensive losts and have looked at some building optioins. Is this better in my case? I am somewhere near this other persons thoughts about buying now. I wont have to use 401 or CC but things will be tight!Any advice is appreciated./ I bid low because of the manu home, but they still want a lot more than it's worth.
Re: Re: Mortgage, How dumb is this idea???? Oooops, sorry, I thought I was writing a person direct. Didn't mean to interrupt your thread! I really am interested in your situation and your last post cracked me up! Where I live , investors have stated the value of homes are rising quicker than the average person can save so buying is the best option here. (or so someone says)
Re: Re: Mortgage, How dumb is this idea???? I bid low because of the manu home . ginger2 ============= This makes about as much sense as bidding to high because a home is a stick built.
Re: Re: Mortgage, How dumb is this idea???? Well, it is 50 000 over the appraised value of the total property. The value is not going up in the home, it's going up in the land. Anyhow, I was interested in the idea of putting a home on some different property and the benefits. Any info on that?
Re: Re: Mortgage, How dumb is this idea???? Stated income or No ratio or No income no asset Fannie Mae www.principal.com/partners/correspondent/sg/forms/fnma_ninauw.pdf I thought I threw this in here? Anything else would be great
Re: Re: Re: Re: Mortgage, How dumb is this idea???? Hi Vick, Since you state that you are in Minnesota ... here is a suggestion ... that may or may not work. I've been in Minnesota during 1997-1999. During that time, I joined Minnesota's Credit Union , whose membership eligibility is simply to be a resident of Minnesota. At that time, MNCU wasn't offering mortgages, but nowadays they do through Ellis Mortgage Inc. I have a feeling that you can be approved through the credit union given your high scores despite bankruptcy. You will have the added advantage of MNCU being your mortgage servicer for life! As a customer, MNCU served me very well, and I do not hesitate to recommend it to anyone. My first car is financed through them (and paid off in 2 years), plus I had checking and savings account through them. As I said, I do not have experience with mortgage through MNCU, so I am only extrapolating from my general experiences -- they try to do a bit more than the banks for you. I also had a Wells-Fargo bank account (then called Norwest Bank), -- and customer service wise, MNCU is a winner by a mile, and then some. They are in Eagan, MN, and open M-F 8:30AM - 5PM. Why not pull your reports, take copies, go there in person and talk to someone there? You might be pleasantly surprised! Best of luck.
