vania-janet/multiturn-rag-retrieval-data huggingface dataset:
"&gt;I think you mean: 60% of all mortgages on homes in Nevada are underwater. Not every home has a mortgage, so it's not 60% of the homes, it's 60% of the mortgages.  Spot on. In the US typically somewhere around 30% to 40% of homes have no mortgage at all (i.e. 100% equity by the owners).  So... *IF Nevada follows the US average* (which it may not, having a lot of new developments) then 60% of 60%/70% would be somewhere between 36% to 42% of homes.  That of course, is still HUGE -- if even 10% of homes in a locale are ""distressed"" sales, it is enough to drive prices down.  But another caveat is that just because a place is ""underwater"" does not mean that it has a HIGH negative equity -- point of fact is that ANY home bought with an LTV mortgage or a really low down payment (i.e. 0% to 10% down payment) is probably underwater from day one and remains pretty close to that for the first couple of years.   Why? Because typical realtor fees are around 6%, and closing costs are easily another couple of percent, add in that with a self-amortizing loan that very little equity is built up in the first few years, and any loss for aging and owner ""cash out"" equity can easily be near zero or negative.  (That's one of the reasons you shouldn't buy unless you are planning on living somewhere for at least 5 years, because it takes that long to ""recoup"" the realtor &amp; closing costs -- ergo the whole ""flipping"" phenom is in and of itself a sign that a market is in a speculative bubble.)"
Short answer: the CD can be considered as part of the down payment calculations. they will want a plan to cash them in the last days or weeks before settlement. When approving you for a mortgage they will be looking at: They now know what you can afford to dedicate to this new property every month. They take into account principal, interest, taxes, insurance and the HOA fee. They will then look at how much money you will use as a down payment. They want this money to exist before applying, and they will check on its existence in the last days before settlement.  The best is cash sitting in a bank. But it can also be money in savings bonds, or a CD, but they will want a plan for cashing that in just before settlement.  They won't be comfortable with it being in a volatile account such as stocks especially if the current balance is exactly what you need for a mortgage that won't be closed for 3 more months. Because people use money they borrow from their 401K for a home purchase, it is possible to use money from volatile account. They will want to see a plan for getting money from these accounts just before settlement.
First of all, you should absolutely put money into savings until you have at least a 6 month cushion, and preferably longer.  It doesn't matter if you get 0% interest in your savings and have a high interest rate mortgage, the cushion is still more important. Once you have a nice emergency fund, you can then consider the question of whether to pay more towards the mortgage if the numbers make sense.  However, in my opinion, it's not just a straight comparison of interest rates.  In other words, if your savings account gives you 1% and your mortgage is 5%, that's still not an automatic win for the mortgage. The reason is that by putting the money into your mortgage, you're locking it up and can't access it.  To me, money in the hand is worth a lot more than money that's yours on paper but not easily accessible. I don't know the math well enough, but you don't really need the math.  Just keep in mind that you have to weight the present value of putting that money into savings vs the future value of putting it into your mortgage and paying less interest at some point in the future.  Do the math and see how much you will save by paying the mortgage down faster, but also keep in mind that future money is worth less than present money.  A LOT less if you suddenly have an emergency or decide on a major purchase and need the money, but then have to jump through hoops to get to it.   To me, you need to save a considerable amount by paying down the mortgage, and also understand that your money is getting locked away, for it to make sense.
I'd stick with 20% down. Truth is - we don't know enough about you. Are you single and staying that way? How is your retirement savings doing? As others asked, any other debt? You can put 20% down, take a breath and see how it's going. I did just that, the 20%. We then had a baby, and 5 nanny-years to pay for. When she was gone, all that money went to the mortgage, and after refinancing (with no points no closing) we have 7 years to go. Just under 20 years beginning to end. During that time we've saved for college (just about fully funded) and for retirement (both with matched 401(k) accounts).  Remember, if you lose your job, a house with a lower mortgage means nothing when there's still the next payment due. But that cushion of cash can be handy.
I'm not an attorney, nor am I a licensed tax adviser. I suggest you talk to these two types of professionals. From my limited knowledge, without proper documentation/organization, I can't see how the IRS/State will not consider this as a rent payment. The mortgage responsibility is of the person signing the mortgage contract, and you're under no obligation to pay that person anything. Had you not lived at the property, you might argue that it was a gift (although I'm not sure if it would stand), but since you do live in the property - it is quite obviously a rent payment. Putting your name on the deed may mitigate this slightly but I'm not sure how much - since you're still not obligated to pay the mortgage. However this is probably moot since it is unlikely for a bank to give a mortgage on a property to person A when it is also owned by a person B, without that person B being side to the mortgage contract.
"Really this is no different from any kind of large lump sum and having a mortgage.  There are probably many questions and answers on this subject.  It really doesn't matter that the proceeds were the result of a sale, an inheritance would not change the answer. I think it is important to note that the proceeds will not eliminate the house 2 mortgage. A high level choice of investment one makes is between equity (such as stock) and debt investments (such as bonds and mortgages).  You are in a unique case of being able to invest in your own mortgage with no investment fee.  This may tip the scales in favor of paying down the mortgage.   It is difficult to answer in your specific case as we don't know the rest of your finances.  Do you have a sizable 401K that is heavily invested in stocks?  Do you have the need for a college fund?  Do you have an emergency fund?  Do you have a desire to own several homes generating income property? If it was me I'd do the following in order, skipping steps I may have already completed: I've heard that the bank may agree to a ""one time adjustment"" to lower the payments on Mortgage #2 because of paying a very large payment. Is this something that really happens? I really kind of hate this attitude.  Your goal is to get rid of the mortgage in a timely manner.  Doing such makes paying for kids college a snap, reduces the income one might need in retirement, basically eliminates the need for life insurance, and gives one a whole lot of money to have fun with."
PMI (Private Mortgage Insurace) is not part of foreclosure. It is part of the MORTGAGE process. Say a bank wants a 20% down payment, for a mortgage and you can only put up 5%. You can take out PMI for the 15% difference. The bank will force you to do this every year (usually for lesser amounts) until your house has risen enough in value so that you have 20% equity.  That's because banks want a maximum loan to value (LTV) ratio of 80% (sometimes less, nowadays).  OK, by allowing you to buy a house with skimpy equity, PMI increases the chance of foreclosure.
Agree with the previous posts the question is poorly worded.  -but-  Clark Howard does say you really need to be getting 90% back in the mortgage payment.  Remember that what ever your paying in principle a month is adding to your net worth and every month that gets you a little more money than the last payment.   Also this is a good hedge on inflation and at some point within a few years you will be at break even.
It is unlikely that the plan is worth doing, given the numbers you have used. However, your thinking is correct that given enough of a rate differential, it could be worth doing. Consider that for each $100k of your mortgage [and I assume your limit for an unsecured personal loan is likely far less than 100k], you would save only $50/year by taking out a personal unsecured loan of 3% and paying off your 3.05% mortgage. Instead, such low unsecured rates may be a signal that it would be worthwhile for you to renegotiate your mortgage. You will likely need to pay a fee, but the savings could be significant.  For each $100k of mortgage, a 1% rate change from your current rate saves you 1k per year. So if you can get a mortgage rate of 2% [which may be possible if an unsecured loan costs you 3%], compare the initial administrative fee against those savings, over the course of the term of the renegotiation. ie: $300k saves you 9k over 3 years, so would be well worth even an initial $3k admin fee.
If you wait long enough in a strong enough market, the rent on the other half of the duplex may cover the entire mortgage payment. If you currently have an urban apartment within walking distance of work and switch to a suburban apartment with a commute, you have a better chance of finding a duplex where the entire mortgage payment is only the $1000 that you pay in rent. Your half of the duplex won't be as nice as your apartment is, and you'll have a half hour or hour long commute every morning (and the same to get home in the evening). But on strictly fiscal terms you'll be doing about as well. Plus you have the income from the other half. So even if your mortgage payment is more than your rent payment, you can still break even if the rent covers it. Consider a $1400 mortgage and $400 in rent from the other half (after property management fees). So long as nothing goes wrong, you break even. Perhaps the agreement is that your parents take care of things going wrong (broken appliances, troublesome tenants, time between tenants). Or perhaps you drain your emergency fund and adjust your 401(k) payment down to the minimum when that happens. Once your emergency fund is replenished, restore the 401(k). If you're willing to live in what's essentially a $500 apartment, you can do better this way. Of course, you can also do better by living in a $500 apartment and banking the other $500 that you spend on rent. Plus you now have the expenses of a commute and five hours less free time a week. You describe yourself as essentially living paycheck to paycheck. You have adequate savings but no building excess. Whatever you get paid, you immediately turn around and spend. Your parents may view you as profligate. Your apartment is nicer than their early apartments were. You go out more often. You're not putting anything aside for later (except retirement). It didn't use to be at all strange for people to move out of the city because they needed more space. For the same rent they were paying in the city, they could buy a house in the suburbs. Then they'd build up equity.
Where'd your money go?! Simple - it's a liability of the partnership, so you and your husband are together owed $20,000 by the partnership before any equity exists. Everything balances nicely at this point. Note that you should account for paying closing costs the same as you considered the down payment - that money should be paid back to you before any is doled out as investment profit! Now, how do you handle mortgage payments? This actually isn't as hard as it sounds, thanks to the nature of a partnership and proper business accounting. With a good foundation the rest of the building proceeds quite cleanly. On month 1 your sister pays $1400 into the partnership, while you pay $645 into the partnership. FP will record an increase in assets (cash) of $1800, an increase in liability to your sister of $1400, and an increase in liability to you of $645. FP will then record a decrease in cash assets of $1800 to pay the mortgage, with a matching increase in cost account for the mortgage. No net change in equity, but your individual contributions are still preserved. Let's say that now after only 1 month you decide to sell the property - someone makes an offer you just can't refuse of $350,000 dollars (we'll pretend all the closing costs disappeared in buying and selling, but it should be clear how to account for those as I mention earlier). Now what happens? FP gets an increase in cash assets of $350,000, decreases the house asset ($320,000 - original purchase price), and pays off the mortgage - for simplicity let's pretend it's still $300,000 somehow. Now there's $50,000 in cash left in the partnership - who's money is it? By accounting for the house this way, the answer is easily determined. First all investments are paid back - so you get back $20,000 for the down payment, $645 for your mortgage payments so far, and your sister gets back $1400 for her mortgage payment.
If your mortgage is an interest only one then the full amount of the payment you make should be to an expense account perhaps called mortgage interest. If the mortgage is a repayment mortgage you need to split the amount of the payment between such an expense account called mortgage interest and between a liability account which is the amount of the loan. In practice I have not found it very easy to do all this as the actual amounts vary depending on number of days in the month and then there are occasional charges etc made by the mortgage company so some approximations seem to be needed unless one is to spend hours trying to get it exactly correct...... Steve
Generally, paying down your mortgage is a bad idea. Mortgages have very low interest rates and the interest is tax deductable. If you have a high interest mortgage, or PMI, you might consider it, but otherwise, your money is better off in some sort of index fund. On the other hand, if your choices are paying down a mortgage or blowing your money on hookers and booze, by all means do the mortgage. Typical priorities are: Dave Ramsey has a more detailed plan.
"Your mortgage agreement probably gives you three options: Pay off your mortgage in full. Use the insurance company's deck-repair payment to fix your deck to be similar in quality to what it was when you took out the mortgage, allowing for normal wear-and-tear since you took out the mortgage. In other words, you can ""restore or repair the property to avoid lessening the Lender's security"". According to most American mortgages, if you can make the repairs for less than the insurance settlement, and the lender is happy with the work, you can keep the savings. Hand over the insurance company payment for the deck to your lender, and have them apply that amount toward the principal of your mortgage. If the repairs are not ""economically feasible"", and you are current with your payments, most American mortgages specify this use of the money. Here are some typical mortgage provisions in this regard. This is an excerpt from the Fannie Mae/Freddie Mac form 3048, which is the form used by most banks for mortgages in the state of Washington. (I have added paragraph breaks and bolding for clarity.) Many states have different wording, but the intent is the same: In the event of loss, Borrower shall give prompt notice to the insurance carrier and Lender. Lender may make proof of loss if not made promptly by Borrower. Unless Lender and Borrower otherwise agree in writing, any insurance proceeds, whether or not the underlying insurance was required by Lender, shall be applied to restoration or repair of the Property, if the restoration or repair is economically feasible and Lender's security is not lessened. During such repair and restoration period, Lender shall have the right to hold such insurance proceeds until Lender has had an opportunity to inspect such Property to ensure the work has been completed to Lender's satisfaction, provided that such inspection shall be undertaken promptly. Lender may disburse proceeds for the repairs and restoration in a single payment or in a series of progress payments as the work is completed. Unless an agreement is made in writing or Applicable Law requires interest to be paid on such insurance proceeds, Lender shall not be required to pay Borrower any interest or earnings on such proceeds.
I'm of the belief that you should always put 20% down.  The lower interest rate will save you thousands over the life of the loan.  Also PMI is no different then burning that much cash in the fireplace every month. From Wikipedia Lenders Mortgage Insurance (LMI), also known as Private mortgage insurance (PMI) in the US, is insurance payable to a lender or trustee for a pool of securities that may be required when taking out a mortgage loan. It is insurance to offset losses in the case where a mortgagor is not able to repay the loan and the lender is not able to recover its costs after foreclosure and sale of the mortgaged property. You are basically paying money each month for the bank to be insured against you not paying your mortgage.  But in actuality the asset of the condo should be that insurance. Only you can decide if you are comfortable with having $50k in liquidity or not.  It sounds like a good cushion to me but I don't know the rest of your expenses.
Obviously you can't predict the future too much, but it's not too hard to figure out what is going to happen to mortgage rates in the short term. Mortgage rates are heavily influenced by 10 year treasury yields.  You can find the daily 10 year rates here.  It's easy to see the direction they've been moving recently.  It usually takes a few days for mortgage rates to follow if the 10 year treasury yield is dropping (although if it's going up, mortgage rates will go up faster than they will fall). Here's a sample of all the 10 year treasury yields for the past 10 years.  Looks like a good time to get a mortgage or refinance! You can also take a look at movements in mortgage backed securities. Here you can find a chart for Fannie Mae 3.0% mortgages.  As the price goes up, mortgage rates go down.  Think of it this way. Right now people are will to pay $103 for $100 worth of 3.0% mortgages. That doesn't really make sense because I could just loan you $100 at 3.0% and turn around and sell it for $103 immediately, pocketing the $3 profit.  The reason is because right now, no one would willingly borrow money at 3.0%. Rates have fallen so much that if a bank has a customer paying them 3.0% on a mortgage, other people are willing to pay a premium on that mortgage. New mortgages are probably being written for 2.0%. (There is no current mortgage backed security for 2.0% fannie maes because rates have never been this low before).
"A budget is a predetermined plan for spending allocated funds to a fixed set of categories according to a schedule. If by,  ""Keeping track of your money"" you mean you are only recording your spending to see on what it is being spent and when, then the answer is no.  A budget has constraints on three things: Schedule:  The mortgage has to be paid at the 1st of the month with a 2 day grace period. Amount: The mortgage payment is 1500.00 Category: The mortgage. Tracking your money would be as follows: 10/5/2016: $25 for a video game. 10/5/2016: $129.99 for two automobile tires. 10/6/2016: $35.25 for luncheon. I didn't like him! Why did I blow this money? 10/7/2016: nothing spent...yoohoo! 10/8/2016: Payday, heck yeah! I'm financially solvent YET AGAIN! How do I do it?! See the difference?"
The mortgage is a debt and you pay interest on it, typically more than you can earn elsewhere (especially once taxes are taken into account.) By lowering the principal, you lower the total interest you pay. This is true whether you sell the house after 1 year, 10 years, or 100 years. In your case, prepayments made in the next few years would mean that when you sell, your mortgage principal would be lower than it otherwise would have been, and your house equity will be higher. You can therefore either move up to more house for the same monthly payment, or have a lower monthly payment for the same kind of house. Either of those are good things, right? Now is the easiest time to find a little more money, so do it if you can. Later you will have more obligations, and develop a taste for more expensive things (statistically speaking) and therefore find a few hundred a month much harder to come by.
I just wanted to add one factor to the other answers. The cost of maintenance etc. is not a fraction of the cost of financing - it is more likely a fraction of the value of the house, and a function of its age. If you say you need to replace a roof every 25 years, and that costs $10,000 (depends on the size of the house, obviously), then you need to set aside $400 a year for roof repair. Other costs (painting, flooring, kitchen, bathrooms, water heaters, heating, AC, yard upkeep etc) can be roughly estimated in the same way. A rule of thumb is 1% of the value of the house per year to cover all big-ticket maintenance. If you pay 4% mortgage, that would increase the reserve by 25%; but if interest rates rise, the fraction may be smaller (I remember paying over 10% mortgage...). In general, whether keeping a property for long term rental income (with the potential for appreciation - but prices can go up and down) is a good idea will largely depend on your ability to predict future costs and value. If you have a variable mortgage, that will be harder to do.
If you have a mortgage backed by FHA, Fannie, or Freddie I would hold off.  There is talk of a new plan that would allow refi's on mortages that were underwater.  I would expect rates to stay about the same for the forseeable future.  Take that money you would spend each month on the personal loan and stick it into your mortgage payment to bring down your debt on it.  Your home may be underwater on paper but once the economy comes back, or hyperinflation sets in (one of the 2 will happen) you will have equity in your home again soon after.
Have you found a general contractor to rebuild your home? I would imagine that someone with a bit of expertise in the area is used to dealing with insurance companies, floating the money for a rebuild, and hitting the gates to receive payment for work accomplished.   Business are used to not receiving payment when work is accomplished and it is part of the risk of being in business.  They have to buy materials and pay employees with the expectation of payment in the future.  Much like workers go to work on a Monday for the work that day, three Friday's later, business often have to float costs but for longer periods of time. If you are looking to be your own general contractor then you will have to float the money on your own. The money should not be used for living expenses or mortgage payments, it should be used for down payments in order to get the work of rebuilding started.