vania-janet/multiturn-rag-retrieval-data huggingface dataset:
I am sorry to say, you are asking the wrong question. If I own a rental that I bought with cash, I have zero mortgage. The guy I sell it to uses a hard money lender (charging a high rate) and finances 100%. All of this means nothing to the prospective tenant.  In general, one would look at the rent to buy ratio in the area, and decide whether homes are selling for a price that makes it profitable to buy and then rent out.  In your situation, I understand you are looking to decide on a rent based on your costs. That ship has sailed. You own already. You need to look in the area and find out what your house will rent for. And that number will tell you whether you can afford to treat it as a rental or would be better off selling.  Keep in mind - you don't list a country, but if you are in US, part of a rental property is that you 'must' depreciate it each year. This is a tax thing. You reduce your cost basis each year and that amount is a loss against income from the rental or might be used against your ordinary income. But, when you sell, your basis is lower by this amount and you will be taxed on the difference from your basis to the sale price.  Edit: After reading OP's updated question, let me answer this way. There are experts who suggest that a rental property should have a high enough rent so that 50% of rent covers expenses. This doesn't include the mortgage. e.g. $1500 rent, $750 goes to taxes, insurance, maintenance, repairs, etc. the remaining $750 can be applied to the mortgage, and what remains is cash profit.  No one can give you more than a vague idea of what to look for, because you haven't shared the numbers. What are your taxes? Insurance? Annual costs for landscaping/snow plowing? Then take every item that has a limited life, and divide the cost by its lifetime. e.g. $12,000 roof over 20 years is $600. Do this for painting, and every appliance. Then allow a 10% vacancy rate. If you cover all of this and the mortgage, it may be worth keeping. Since you have zero equity, time is on your side, the price may rise, and hopefully, the monthly payments chip away at the loan.
"The definition of insurance is the transfer of risk. Thus, you're paying for transferring of a risk (of an item/property) to the insurer (carrier), so that they bear the financial burden of a loss/accident and not you. You could always self-insure, but a lot of times, insurance is cheaper, since due to the ""Law of Large Numbers"" the insurer can just charge a premium that is small percentage in comparison to the cost of self-insuring."
The biggest red flag is the fact that your parents may lose their house. There are multiple parts of the decision.  The red flag comes in because you are stretching your finances to the max to afford the house you are interested in. Buying down the interest rate makes some sense depending on how long you plan on staying, but not a a way to afford house X.  Of course a bigger down payment will also influence the size of the house. You are also buying something in case your parents need a place to live. What happens if that never occurs? You now have something bigger than you need. You are mixing investments and housing. There is no guarantee that you will even break-even on the house as a investment. It can take several years to make back the closing costs involved in buying and selling a house, based solely on stable price and your monthly payments. If the price drops you might never make the money back.  You might be better off renting what you need now or waiting until the current house is lost and then renting what you need then.
What options do I have? Realistically?  Get a regular full time job.  Work at it for a year or so and then see about buying a house. That said, I recently purchased a decent home.  I am self-employed and my income is highly erratic.  Due to how my clients pay me, my business might go a couple months with absolutely no deposits.   However, I've been at this for quite a few years.  So, even though my business income is erratic, I pay myself regularly once a month.  In order to close the deal with the mortgage company I had to provide 5 years worth of statements on my business AND my personal bank accounts.  Also I had about a 30% down payment.   This gave the bank enough info to realize that I could absolutely make the payments and we closed the deal. I'd say that if you have little to no actual financial history, don't have a solid personal income and don't have much of a down payment then you probably have no business buying a house at this point.  The first time something goes wrong (water heater, ac, etc) you'll be in a world of trouble.
"With permanent contract in Germany you shouldn't have any problem getting a loan. It's even more important than how much do you earn. Generally, you should ask for a house mortgage (Baufinanzierungsdarlehen) with annuity as a type of credit to save on interest. Besides, you usually get a better conditions with a saving bank (Sparkasse) or a popular bank (Volksbank) situated in the area where your house is situated. You also shouldn't combine your credit with extra products (the simpler is the product, the better is for you), maybe I'll write later an extra piece on the common pitfalls in this regard. Probably, you could find a bank that would give you such a loan, but it would be very expensive. You should save at least 40%, because then the bank can refinance your loan cheaply and in return offer you a low interest. Taxes depend heavily on the place where you buy a house. When you buy it, you pay a tax between 3.5% and 6% (look up here). Then you pay a property tax (Grundsteuer), it depends on community how much do you pay, the leverage is called Hebesatz (here's example). Notary would cost ca. 1.5% of the house price. All and all, you should calculate with 10% A country-independent advice: if you want to save on interest in the long run, you should take an annuity loan with the shortest maturity. Pay attention to effective interest rate. Now to Germany specifics. Don't forget to ask about ""Sondertilgung"" (extra amortization) - an option to amortize additionaly. Usually, banks offer 5% Sondertilgung p.a. The interest-rate is usually fixed for 8 years (however, ask about it), this period is called Zinsbindung. It sound ridiculous, but in southern lands (Bayern, Baden-Württemberg) you usually get better conditions as in Berlin or Bremen. The gap could be as big as 0.5% p.a. of effective interest rate! In Germany they often use so-called ""anfängliche Tilgung"" (initial rate of amortizazion) as a parameter."
"Yes, you should budget some amount of your emergency fund for healthcare expenses. How much you budget is really dependent on your particular anticipated costs. Be aware that health insurance likely costs significantly more than your employer charges you for access to its plan. Since healthcare reform mandated guaranteed issue individual coverage you will have the ability to buy individual coverage for you and, if applicable, your family. When buying individual coverage you have essentially two choices, your decision hinges on whether or not you'd qualify for a premium subsidy. If your AGI is below 400% of the poverty line you'll be able to receive subsidized coverage at a state or federal health insurance exchange. If the subsidy is not meaningful to you, or you wouldn't qualify, you can buy an ""off exchange"" plan offered either directly through a carrier or an insurance agent (some insurance agents are also licensed to sell exchange plans though it's somewhat rare). In order to receive subsidized coverage you must buy through a state or federal exchange, or an agent licensed to sell exchange products specifically. If your employer was large enough to be required to offer its plan via COBRA or you live in a state that extends the COBRA requirement to smaller businesses, you can choose that as well. Bear in mind this option is likely to be expensive relative to individual plans. It's becoming a less relevant solution with the advent of guaranteed issue individual coverage. COBRA is not a special type of insurance, it's a mandate that your employer allow you to remain on its plan but pay the full gross premium plus an up to 2% (10% for calCOBRA) administrative fee. Despide popular vernacular, there is no such thing as Obamacare or ACA coverage. Obamacare reshaped the insurance market. The ACA outlines certain minimum coverage requirements, generally referred to as ""Minimum Essential Coverage."" While employers and plans are not ""required"" to meet all of these coverage requirements there is a penalty associated with non-compliance. The single exception to this is grandfathered plans which can still sidestep a few of the requirements. The penalty is harsh enough that it's not worth the cost of offering a non-compliant plan.
Insurance is to mitigate risk you can't handle yourself.  (All insurance, not just car insurance.)  The expected value of the insurance will always cost more than the expected value of your loss, that's how the insurance company makes money.  But sometimes the known fixed cost is better for your ability to sleep at night than the unknown (though likely lower) variable cost. If you were suddenly hit with a bill the size of your car tomorrow, would you be ok?  If so, then you can handle the risk yourself and don't need insurance.  If not, then you need the insurance. The insurance company sells thousands of policies and it's much easier to predict the number out of 1000 people that will get in an accident tomorrow than the chance that you specifically will get in an accident tomorrow.  So they can manage the risk by making a small amount of money from 999/1000 people and buying the other guy a new car.
"I think reinsurers also by insurance, from other reinsurers. The risk gets spread around, and these guys actually know what they are doing. I've heard insurers sometimes don't (using really rough thumb rules like ""buy 2% cats""), and end up with suboptimal reinsurance policies, but they always make sure they are covered. (The reinsurers have a better idea of what the risk is, and can outsmart the insurers when they sell the reinsurance policies).   Expanding on the ""2% cat"" thing - insurers need to keep enough reserves + reinsurance to cover everything. The gist is, if they buy 2% catastrophe insurance, then the reinsurer will cover losses over 2% of the portfolio, so the insurers only need to cover the first 2% of their portfolio. (It might be a bit more complicated than this, of course).  They might be better keeping higher reserves than 2%, self-insuring more (buying less re-insurance). Or they might be better keeping less than 2% reserves, and self-insuring less (buying more re-insurance). It depends on the price they negotiate with the re-insurer. Whatever the case, they have to make sure that they can cover any disaster (and the government will regulate this, or end up getting pressured to fund bail-outs as insurers go bankrupt and home owners are left with nothing)."
First, some general advice that I think you should consider A good rule of thumb on home buying is to wait to buy until you expect to live in the same place for at least 5 years. This period of time is meant to reduce the impact of closing costs, which can be 1-5% of your total buying & selling price. If you bought and sold in the same year, for example, then you might need to pay over 5% of the value of your home to realtors & lawyers! This means that for many people, it is unwise to buy a home expecting it to be your 'starter' home, if you already are thinking about what your next (presumably bigger) home will look like. If you buy a townhouse expecting to sell it in 3 years to buy a house, you are partially gambling on the chance that increases in your townhome's value will offset the closing costs & mortgage interest paid. Increases in home value are not a sure thing. In many areas, the total costs of home ownership are about equivalent to the total costs of renting, when you factor in maintenance. I notice you don't even mention renting as an option - make sure you at least consider it, before deciding to buy! Also, don't buy a house expecting your life situation to 'make up the difference' in your budget. If you're expecting your girlfriend to move in with you in a year, that implies that you aren't living together now, and maybe haven't talked about it. Even if she says now that she would move in within a year, there's no guarantee that things work out that way. Taking on a mortgage is a commitment that you need to take on yourself; no one else will be liable for the payments. As for whether a townhouse or a detached house helps you meet your needs better, don't get caught up in terminology. There are few differences between houses & townhomes that are universal. Stereotypically townhomes are cheaper, smaller, noisier, and have condo associations with monthly fees to pay for maintenance on joint property. But that is something that differs on a case-by-case basis.
"Many answers here have given what look to be useful perspectives on your question.  I want to point out an interesting technical issue. If an employer contracts with an insurer, it agrees to cover all employees (or all that fill some pre-specified definition and no one else), and to offer only a limited range of options. If you buy insurance directly, you obviously have a huge range of choices, including the (technically illegal) one of no insurance at all. Your first thought is probably, ""Hey, that's great! More options, more chances to pick the plan that's right for me."" Sorry, no.  Yes, you have more options, but so does everyone else. If you are working for some large company, you get insurance, period. If you suspect you have an expensive health condition, you cannot buy more insurance; if you believe yourself to be healthy as a horse, you cannot get skimpier insurance and pocket the difference.  Healthy people and sick people are all in the same predictable pool. If you buy insurance freely, the insurer knows that the sicker you are, the more likely you are buy insurance, a phenomenon called adverse selection.  As a result, the premiums (fees) a person buying his own insurance pays are much higher, because most of his fellow policy-holders are sickly -- even if he himself is just risk-averse. On the other hand, if you are risk-neutral, if you can survive a $10,000 bill if it happens to arise, you can save big by finding the skimpiest imaginable insurance, where all your fellow policy-holders will be hale and healthy people like yourself."
Property taxes cover more items than have already been mentioned.  As an example, my property tax bill lists the following items: county general purpose, community college, police, police, headquarters, fire prevention, environmental bonds, sewage, town general purpose, highway department, building & zoning, town lighting, park district, garbage disposal, water district,  library district, and of course, schools which are now about 60% of the total. In my area, a $500K home could easily have over $10K in total property taxes. Many of these services are for things that you need or might even want such as parks and libraries.  In any case, they must be funded and property taxes are the most prevalent way of doing that.  I was once told that you never actually own property because if you don't pay the property taxes, they will take the property away.  By the way, property taxes are not the only expenses that you may have overlooked.  You need to have insurance on your house to cover fire, theft, storm damage, and injuries to persons visiting you.  In some areas, flood insurance may also be required.  You should also budget for repairs and maintenance.  Eventually you will need to replace major items like roofs, appliances and heating/cooling equipment. Don't underestimate the cost of maintaining a lawn if you have one. Basically owning a home is an expensive undertaking and you should have a good understanding of all the expenses involved or you will find yourself in financial trouble.
I doubt it. I researched it a bit when I was shopping for a HELOC, and found no bank giving HELOC for more than 80% LTV. In fact, most required less than 80%. Banks are more cautious now. If the bank is not willing to compromise on the LTV for the first mortgage - either look for another bank, or another place to buy. I personally would not consider buying something I cannot put at least 20% downpayment on. It means that such a purchase is beyond means.
"A quitclaim deed says, in essence, ""whatever ownership I have in this property I give to you"". Contrast that with a warranty deed, in which the grantor guarantees that he has good title, that he has the right to convey the property, that it is free of all liens and encumbrances, and that he will warrant and defend your title in the event of a breach. Obviously the warranty deed gives you more protection, to the extent that the grantor has the wherewithal to back it up. Regardless, the trend today is to buy title insurance and let the title company deal with those complications."
and I need to upgrade my current home to a larger, longer-term property Would selling your current home give you (at least) a 20% DP on the new home? Take additional cash out of the refinance of the first home to accelerate saving Dittoing D Stanley, that makes no sense. Purchase and move to a second property of greater cost and value to first You'll need to find the new house at the same time you're selling the existing home, and write the new-home purchase contract in such a way that you can back out in case the purchaser of your home backs out.
Does such insurance make any sense or is it just wasting money for passengers? As with most insurance, it depends. If you just look at the probability of a payout, the cost of the insurance, and the payout amount, then statistically it will always be better to avoid buying insurance. This is because there is a certain amount of overhead in an insurance company, like the commissions and salaries you mentioned. The goal when buying insurance should be to avoid a cost that you cannot afford or is inconvenient to be able to afford. For example, if your family would be devastated financially by your death then it would make sense for you to buy some sort of life insurance. Whether or not this particular insurance makes sense for you depends on your financial situation and risk tolerance.
"As others have said, congratulations on saving up 75K in cash while seemingly not neglecting other areas of personal finance.  Considering that only 15% of Americans have more than 10K saved this is quite a feat.  source If you sell your old house, and buy the new one you will still be in really good financial shape.  No need to comment further. Renting your current home and buying a new home introduces a great amount of risk into your life.  The risk in this case is mitigated by cash.  As others have pointed out, you will need to save a lot more to remove an acceptable amount of risk. Here is what I see: So without paying off your existing house I would see a minimum savings account balance of about double of what you have now.  Once you purchase the new house, the amount would be reduced by the down payment, so you will only have about 50K sitting around. The rental emergency fund may be a little light depending on how friendly your state is to landlords.  Water heaters break, renters don't pay, and properties can sit vacant.  Also anytime you move into a new business there will be mistakes made that are solved by writing checks.  Do you have experience running rentals?   You might be better off to sell your existing home, and move into a more expensive home than what you are suggesting. You can continue to win at money without introducing a new factor into your life. Alternatively, if you are ""bitten by the real estate bug"" you could mitigate a lot risk by buying a property that is of similar value to your current home or even less expensive.  You can then choose which home to live in that makes the most financial sense.  For example some choose to live in the more dilapidated home so they can do repairs as time permits. To me upgrading the home you live in, and renting an expensivish home for a rental is too much to do in such a short time frame.  It is assuming far too much risk far to quickly for a person with your discipline.  You will get there."
Also, asking this question is typically only relevant for people who already own the home they live in as buying for personal use will typically have a better return than buying in order to rent. But already people who buy for personal use are on average wealthier (or at least on the track to become more wealthy in case of fresh home owners) than people who rent. This is attributed to personal characteristics and the fact that the downpayment of the mortgage enforces saving behaviour (which is typically kept up once the house is paid, and is anyways found to be more pronounced than for non-house-owners). In contrast, many people who decide never to buy a home fall short of their initial savings/investment plans (e.g. putting the 150 k€ into an ETF for the next 21 years) and in the end spend considerably more money - and this group of people rarely invests into directly becoming a landlord. Assuming that you can read German, here's a relevant newspaper article and a related press release.
Since insurance is priced for profit, the price will be more than the price of a new phone multiplied against the chance of loss and payout.  Otherwise insurance would not be offered since there was no money to be made by the insurance company. The idea of insurance is that you are pooling your risk with everyone else.  You all definitely pay a little (insurance premium) instead of any of you maybe paying a lot (when a phone is destroyed).  The question is not whether it is a good investment (almost surely no), but whether the loss at a random time would be too crippling to be absorbed by you when it happened.  If you can afford a new phone without financial difficulty if it were destroyed then you should generally not buy insurance. One other factor could be that although you are in the same risk pool as everyone else (everyone pays the same rate), but your situation has a higher risk than most, insurance can be a better deal, though the better investment over time would be to correct the risky situation instead of buying insurance.  This could be that you have a habit of losing things, live in an area where phones are stolen often, have pets that destroy your belongings, etc. Statistically, you will come out ahead not buying insurance, but you are accepting an unknown outcome.
Answer their questions as honestly as you can, they should know that you aren't going to have the answer off hand to everything and that is ok.  One way that you can cover yourself is to take photographs of everything that way if anything catastrophic does happen you will have something to show exactly how it was when the adjuster comes to do their estimates.  Hopefully you never need to use that but better to err on the side of caution. The insurance company isn't all that important, read reviews as mentioned in another answer.  You can also look into multiple policy discounts.  If your insurance provider for your auto insurance also offers homeowners policies they might also offer you a discount on one or both policies for grouping them.  Feel free to shop around and look for the best coverage at the best price.  Overall the most important thing is going to be a company that is easy to deal with.  It is not worth saving a couple dollars a year to have insurance through somewhere that is going to make it a nightmare to make a claim. In addition to answering all of their questions make sure that you have all of your own questions answered.  Depending on location you might want to ask if they cover hurricanes, flooding, tornadoes, other natural events, etc.  If you have any special items like collectibles, jewelry, expensive electronics, firearms, etc you might want to ask if that is covered of if you need a separate rider for those items.