vania-janet/multiturn-rag-retrieval-data huggingface dataset:
"A few points: The reason your lender is asking you to be above 580 is because that is the magic number for an FHA loan where your down payment would be only 3.5% (the US Government effectively subsidizes the rest of your down pmt). If you had a score lower than that (but still above 500), you will need to put 10% down which is still less than the typical 20% down pmt that many of us make. It's not that you can't get a loan with a score < 580. It's that you don't qualify for the ""maximum financing"" thru FHA. You should do some research and decide if you even want an FHA loan. And keep in mind, you will throw away some money every month towards PMI (mortgage insurance) if you do FHA. Many insist on 20% down pmt to avoid that. How exactly these two items will effect your score is another question. It's possible that having accounts added back as revolving accounts could negatively / not positively effect it. It will likely effect it in some way and I'm not 100% which way or if it would be very significant. You may want to dispute both of those items regardless if you can't afford anything but an FHA loan. If that's the case, then you may have nothing to lose. You might also want to shop around for mortgage lenders. And look for a ""portfolio lender."" These type of lenders general have more flexibility in who they can lend to and the type of loans."
There's no objectively correct answer to this question, given your circumstances. Ideally, the stepmom would put in 60% of the downpayment and 60% of the monthly maintenance costs and mortgage. You and your partner would evenly split the 40%. Then, it is very obvious. However, my guess is that this isn't going to be the situation. Without knowing the numbers, I suggest that, upon sale of the house, the exact value of each person's downpayment is immediately returned without interest. What's left of the equity is returned to everyone as per the amount they paid in mortgage. The monthly maintenance costs are excluded from this calculation entirely. You are, of course, free to take any other approach all three of you deem to be fair. In my example, consider a home that costs $200,000. Your stepmom puts in $40,000 for a downpayment, you put in $10,000, and your parter puts in $10,000. The mortgage payments are $1500/month. Your stepmom puts in $500 a month, you put in $250 a month, and your partner puts in $750 a month. You sell the place for $300,000 after paying off the entire mortgage. Your stepmom gets $40,000 + $80,000. You get $10,000 + $40,000. Your partner gets $10,000 + $120,000. Keep in mind, though, that you may have to sell the house for a loss. In which case, some or all of the downpayment may not even be returned. In fact, you may end up having to cover money over and above the downpayment and the payments you've made. Any good lawyer will make you consider this. Additionally, any good lawyer will make you spell out under what circumstances, people can force sale of the home.
"I'll assume you live in the US for the start of my answer - Do you maximize your retirement savings at work, at least getting your employer's match in full, if they do this. Do you have any other debt that's at a higher rate?  Is your emergency account funded to your satisfaction? If you lost your job and tenant on the same day, how long before you were in trouble?  The ""pay early"" question seems to hit an emotional nerve with most people. While I start with the above and then segue to ""would you be happy with a long term 5% return?"" there's one major point not to miss - money paid to either mortgage isn't liquid. The idea of owing out no money at all is great, but paying anything less than ""paid in full"" leaves you still owing that monthly payment. You can send $400K against your $500K mortgage, and still owe $3K per month until paid. And if you lose your job, you may not so easily refinance the remaining $100K to a lower payment so easily.  If your goal is to continue with real estate, you don't prepay, you save cash for the next deal. Don't know if that was your intent at some point.  Disclosure - my situation - Maxing out retirement accounts was my priority, then saving for college. Over the years, I had multiple refinances, each of which was a no-cost deal. The first refi saved with a lower rate. The second, was in early 2000s when back interest was so low I took a chunk of cash, paid principal down and went to a 20yr from the original 30. The kid starts college, and we target retirement in 6 years. I am paying the mortgage (now 2 years into a 10yr) to be done the month before the kid flies out. If I were younger, I'd be at the start of a new 30 yr at the recent 4.5% bottom. I think that a cost of near 3% after tax, and inflation soon to near/exceed 3% makes borrowing free, and I can invest conservatively in stocks that will have a dividend yield above this. Jane and I discussed the plan, and agree to retire mortgage free."
Start with the list of mortgage companies approved to work in your area. There are 80 within 10 miles of my house, and more than 100 in my county. Pick ones you know because they are established businesses in your area, region, or even nationally.   A good place to start might be with your current lender. The risk you seem to be worried about is a scam or a trick. In the recent past the scams were ones where the home owner didn't understand teaser rates, and the risk of interest only and pick-your-payment loans. The simpler the bells and whistles, the less likely you are to be embarking on a risky transaction. It can't hurt to ask an organization like the BBB or neighbors, but realize that many people loved their exotic mortgage until the moment it blew up in their face. So for 5 years your neighbor would have raved about their new mortgage until they discovered how underwater they were.  Regarding how smoothy the transaction is accomplished, is hard to predict. There is great variation in the quality of the loan officers, so a great company can have rookie employees. Unless you can get a recommendation for a specific employee it is hard know if your loan officer is going to give great service.   When getting a mortgage for a purchase, the biggest risk is getting a mortgage that results in a payment you can't afford. This is less of a risk with a refinance because you already have a mortgage and monthly payment. But keep in mind some of the monthly savings is due to stretching out the payments for another 30 years. Know what you are trying to do with the refinance because the streamlined ones cant be used for cash out.
Here's one way of looking at it. The first years of a 30-year mortgage are mostly interest payments.  Even with a 4% 30-year loan -- I seem to recall seeing rates that low! --  the interest part of your payments for the first five years are double the principal part. You will pay less in interest if you throw extra money at the mortgage.  How much extra? Let's say you have a loan of $100,000 for 30 years at 4.5%.  The monthly payment is $506.69.  After five years, you've paid $8,842.43 toward principal and $21,558.97 toward interest. Let's bump that payment up $200 per month to $706.69.  Now, after five years, you've paid $22,284.24 toward principal and $20,128.56 toward interest.  You've saved yourself from paying $1,430.41 in interest. But if you can swing $706.69, can you swing $752.28?  That's the payment on a fifteen year mortgage at 4.25%.  After five years you'll have paid $26,562.31 on principal and $18,574.49 in interest:  $1,500 less in interest than even paying an extra $200/month on your 30-year. Now, another way of looking at it. If you're getting a 30-year, get one.  Pay only the minimum, and save what you would have paid toward your mortgage to fund a down payment for your next house, since you're planning to get out in 5-7 years.  Rather than try to sell your current house, rent it out.  Rents go up, but your mortgage payment won't.  Fixed-rate mortgages are a great protection against inflation.
"Have you ever tried adding up all your mortgage payments over the years? That sum, plus all the money that you put as a down payment (including various fees paid at closing) plus all the repair and maintenance work etc) is the amount that you have ""invested"" in your house. (Yes, you can account for mortgage interest deductions if you like to lower the total a bit).  Do you still feel that  you made a good ""investment""?"
One will find that the fixed 30 year mortgage rate is tightly correlated to the 10 year treasury. An adder of 2-2.5% or so, changing slightly with the rest of the economy, as money can get tight or loose independent of the rate itself. In 2011 we are witnessing low rates yet tough loan standards, this is the phenomenon I am referencing.
The key word you are looking for is that you want to refinance the loan at a lower rate. Tell banks that and ask what they can offer you.
On $4K/mo gross about $1000/mo can go to the mortgage, and at today's rates, that's about $200K of mortgage the bank might lend you.  Income is qualified based on gross, not net, so if $48,000/yr is wrong, please scale my guesstimate down a bit. In the end, today's rates allow a mortgage of nearly 4X one's gross income. This is too high, in my opinion. I'm answering what the bank would approve you at, not what I think is wise. Wise, in my opinion is 2.5-3X one's income, tops.
You'd think I would remember this, having also bought a house in 2008, but I recall that earnest money was different from the nonrefundable deposit.  Earnest money was typically some small amount - $500 or something - that was put on the table when you made the offer.  After the offer was accepted, but before closing, the 1%-ish amount was put into escrow as part of the negiotiation process.  Maybe this is just a Massachusetts thing, though.
"The reason to put more money down or accept a shorter maximum term is because the bank sweetens the deal (or fails to sour it in some fashion).  For example, typically, if there is less than 20% down, you have to pay an premium called ""Private Mortgage Insurance"", which makes it bad deal. But I see banks offering the same rate for a 15%-year mortgage as for a 30-year one, and I think: fools and their money.  Take the 30-year and, if you feel like it pay more every month.  Although why you would feel like it, I don't know, since it's very difficult to get that money back if you need it."
Yes, you may do this at any time before signing - but to make a change like this after the official loan documents have been drawn up will cost you extra fees.  The typical redraw fee is around $200 in CA.   Does it make sense to do so?  No, it does not.  If you have an extra 1%, it would probably be better to use that money to purchase a lower interest rate.  Here's an example: Let's say you're buying a $200,000 house and your offered interest rate is 4.75% (just an example).   With 10% down you'd have a loan amount of $180,000 and a p&i payment of $938.97 per month.   With 11% down you'd have a loan amount of $178,000 and a p&i payment of $928.53 per month. Now let's pretend you buy your interest rate down to 4.375%.  With 10% down you'd still have a loan amount of $180,000 but your p&i payment would be $898.71 per month.   Even though the last option gives you the best payment, if I were in your shoes I'd stick with the 10% down and save that extra cash in the bank for a rainy day.  Buying a home comes with a lot of new expenses and many are unexpected. Good luck!
So let's assume some values to better explain this.  For simplicity, all of these are in thousands: So in this example, you're going to destroy $250 in value, pay off the existing $150 loan and have to invest $300 in to build the new house and this example doesn't have enough equity to cover it.  You typically can't get a loan for much more than the (anticipated) property value. Basically, you need to get a construction loan to cover paying off the existing loan plus whatever you want to spend to pay for the new house minus whatever you're planning to contribute from savings.  This new loan will need to be for less than the new total market value.  The only way this will work out this way is if you bring significant cash to closing, or you owe less than the lot value on the current property. Note, that this is in effect a simplification.  You can spend less building a house than it's worth when you're done with it, etc., but this is the basic way it would work - or NOT work in most cases.
New Mortgage Rules - Special report!  Please read in full and share this with your friends and family today!  You will now qualify for significantly less: -A family with $65,000 in income and no dept with 5% down could previously buy a home for about $525,000 -Now they can only spend about $410,000  READ FULL ARTICLE HERE: http://ownyourlife.ca/mortgages-marketing/new-mortgage-rules-special-report.html
The breakdown between how much of your payment is going toward principal and interest is very important.   The principal balance remaining on your loan is the payoff amount.  Once the principal is paid off, your loan is finished.  Each month, some of your payment goes to pay off the principal, and some goes to pay interest (profit for the bank). Using your example image, let's say that you've just taken out a $300k mortgage at 5% interest for 30 years.  You can click here to see the amortization schedule on that loan.  The monthly payment is $1610.46. On your first payment, only $360 went to pay off your principal.  The rest ($1250) went to interest.  That money is lost.  If you were to pay off your $300k mortgage after making one payment, it would cost you $299,640, even though you had just made a payment of $1250.  Interest accrues on the principal balance, so as time goes on and more of the principal has been paid, the interest payment is less, meaning that more of your monthly payment can go toward the principal.   15 years into your 30-year mortgage, your monthly payment is paying $762 of your principal, and only $849 is going toward interest.  Your principal balance at that time would be about $203k.  Even though you are halfway done with your mortgage in terms of time, you've only paid off about a third of your house. Toward the end of your mortgage, when your principal balance is very low, almost all of your payment goes toward principal.  In the last year, only $513 of your payments goes toward interest for the whole year. You can think of your monthly loan payment as a minimum payment.  If you continue to make the regular monthly payments, your mortgage will be paid off in 30 years.  However, if you pay more than that, your mortgage will be paid off much sooner.  The extra that you pay above your regular monthly payment all goes toward principal. Even if you have no plans to pay your mortgage ahead of schedule, there are other situations where the principal balance matters.  The principal balance of your mortgage affects the amount of equity that you have in your home, which is important if you sell the house.  If you decide to refinance your mortgage, the principal balance is the amount that will need to be paid off by the new loan to close the old loan.
Good answer, I'm painfully aware of how much money that is for how long, but I think we're getting the runaround here. We're going to find a way to reduce that rate and increase our down payment. It's the only way I see of getting myself into a house
The interest rate on your mortgage can adjust up, inside of those parameters. (The actual formula used to adjust will be found in the fine print of your mortgage contract.) However, the bank knows that if they let your rate get too high above the current market rates, you will refinance to a different bank. So the mortgage is typically structured so that it will raise your rate somewhat, but it won't usually get too far above the market rate. If you knew ahead of time that you would have the house paid off in 5 years, or that you would be selling the house before the 5 years is over, you could confidently take the adjustable rate mortgage. Credit cards, on the other hand, also typically have variable rates. These rates can change every month, but they are usually calculated on some formula determined ahead of time. For example, on my credit card, the interest rate is the published Prime Rate plus 13.65%. On my last statement, it said the rate was 17.15%. (Of course, because I pay my balance in full each month, I don't pay any interest. The rate could go up to 50%, for all I care.) As I said, I don't know what determines the rate on your variable rate student loan option, and I don't know what the limits are. If it climbs up to 11.5%, that is obviously ridiculously high. I recommend that you try to pay off this student loan as soon as you possibly can; however, if you are not planning on paying off this student loan early, you need to try to determine how likely the rate is to climb if you want to pick the variable rate option.
If the property appraises for $450K, say, and the lender is not willing to lend more than 80% of that ($360K), then Buyer #1 is OK; it is only necessary to borrow $480K - $144K = $336K, while Buyer #2 needs to come up with another $40K of downpayment to be able to get the loan, or might be asked to pay a higher interest rate since the lender will be lending more than 80% of the appraised value, etc. Of course, Buyer #2's lender might be using a different appraiser whose valuation might be higher etc, but appraisals usually are within the same ballpark. Furthermore, good seller's agents can make good estimates of what the appraisal is likely to be, and if the asking price is larger than the agent's estimate of appraised value, then it might be to the advantage of the selling agent to recommend accepting the lower offer with higher downpayment over the higher offer with smaller downpayment. The sale is more likely to go through, and an almost sure 6% of $480K (3% if there is a buyer's agent involved) in hand in 30 days time is worth more than a good chance of nothing at the end of 15 days when the mortgage is declined, during which the house has been off the market on the grounds that the sale is pending. If you really like a house, you need to decide what you are willing to pay for it and tailor your offer accordingly, keeping in mind what your buyer's agent is recommending as the offer amount (the higher the price, the more the agent's commission), how much money you can afford to put down as a downpayment (don't forget closing costs, including points that might be need to be paid), and what your pre-approval letter says about how much mortgage you can afford. If you are Buyer #1, have a pre-approval letter for $360K, and have enough savings for a downpayment of up to $150K, and if you (or your spouse!) really, really, like the place and cannot imagine living in any other place, then you could offer $500K with 30% down (and blow the other offer out of the water).
"I'd be curious to understand where you live, with a condo costing nearly 3X the average home price in the US. That said, if you are hell bent on this, money is loosening up. I am a real estate agent, and part of my distaste for the industry is the fact that it is the near opposite of financial fiduciary. I am responsible to be truthful and act in the best interest of my client. I am specifically not allowed to offer tax or financial advice. A client that told me she had a prequalification, only later shared that she's using a 3% down, FHA mortgage, and from what I see, getting in over her head. In your case, look at the requirements for an FHA loan. I recommend 20% down, and the payment be less than 28% (Principal, interest, property tax) of monthly gross. The FHA allows as little as 3% down, with payment as high as 31%. In your case, $15K is 3%, and, depending on the other expenses for the house, the payment should be manageable. If your 401(k) accounts offer matching, I'd deposit the amount to capture the match, no more, no less. Let me illustrate the power of matching - say the match is on your first $10,000 total, between the 2 of you. $10,000 deposited, is $20,000 in your retirement account, and you are just out of pocket $7500, as that's your net after tax. Now, the $20K in the account allows you to borrow half, $10,000 at a favorable rate for a 10 year payback. So, to your question of raiding your retirement accounts, I'd advise the opposite. A $10K withdrawal will cost $2500 in tax and $1000 penalty. Net $6500. Better to take the IRA, transfer it to the 401(k), and borrow 50%. Your $40K across the accounts will let you borrow $20K and keep the retirement savings going. Last - I respect the answers that say ""don't,"" they are actually the right answers. Mine only applies if you won't listen to them.
As far as the specific price - it depends so much on the area and the house and other things.  70k could be a perfectly reasonable offer, or it could be an insulting lowball.  If they just lowered it from 95 to 85 for example, 70 is pretty low to start off.  But who knows. To answer the closing costs side of things, though, the reason those are sometimes paid by seller (rather than just dropping the sales price some) is that it makes it easier for the buyer if the buyer doesn't have much cash on hand.  From the seller's point of view it's all the same money - giving you a discount on the sale price vs. covering closing costs - except for the small difference of the realtor's commission (which would be slightly lower in the lower-sales-price example, but usually that's not a significant factor in total cost).  IE: vs How much having the 3k less on hand (and instead in your mortgage) is worth to you as a buyer is, of course, up to you.  If you have plenty of cash on hand for the down payment and closing costs, then paying closing costs yourself is probably in your best interest as the seller typically assumes buyers value reduced/zero closing costs at more than 100% face value.
How can people afford 10% mortgage? Part of the history of housing prices was the non-bubble component of the bubble. To be clear, there was a housing bubble and crash. Let me offer some simple math to illustrate my point -  This is what happened on the way down. A middle class earner, $60K/yr couple, using 25% of their income, the normal percent for a qualified mortgage, was able to afford $142K for the mortgage payment. At 10% fixed rate. This meant that after down payment, they were buying a house at $175K or so, which was above median home pricing.  Years later, obviously, this wasn't a step function, with a rate of 4%, and ignoring any potential rise of income, as in real term, income was pretty stagnant, the same $1250/mo could pay for a $260K mortgage. If you want to say that taxes and insurance would push that down a bit, sure, drop the loan to $240K, and the house price is $300K.  My thesis ('my belief' or 'proposal', I haven't written a scholarly paper, yet) is that the relationship between median home price and median income is easily calculated based on current 30 year fixed rate loans. For all the talk of housing prices, this is the long term number. Housing cannot exceed income inflation long term as it would creep up as a percent of income and slow demand. I'm not talking McMansion here, only the median. By definition, the median house targets the median earners, the middle class.  The price increase I illustrate was just over 70%. See the famous Shiller chart -  The index move from 110 to 199 is an 81% rise. I maintain, 70 of that 81 can be accounted for by my math. Late 80's, 1987 to be exact, my wife got a mortgage for 9%, and we thought that was ok, as I had paid over 13% just 3 years earlier.