vania-janet/multiturn-rag-retrieval-data huggingface dataset:
Interest is calculated daily. Doing the math: Between 6-17 and 7-25 are 38 days, 200.29 / 38 = 5.27 interest per day. Between 7-25 and 8-17 are 23 days. 120.02 / 23 = 5.22 interest per day. The minimal difference is because the principal has already gone down a little bit. So you should expect ~5.20 x number of days for the next interest number coming up; slowly decreasing as the remaining principal debt decreases. Note that this is equivalent of an annual interest rate of over 20 %, which is beyond acceptable. In the current economy, this is ridiculously high. I recommend trying to get a refinancing with another provider; you should be able to get it for a third of that.
"The ""Home Affordable Refinance Program"" is finally able to help folks restructure and lower their monthly payments. Financially savvy homeowners are actively planning to accelerate their payments and shave years off the mortgage. Regardless of how the homeowner chooses to use the monthly savings, the reality is that every penny saved is definitely a penny earned."
First pay off all existing debt. Then set up at least 6 month emergency fund.  Freelancing exposes you to way more risks than employment. Then buy GIC's to cover and match the maturity of  your expected education fees. Only 'play' with what is left.  Don't over think it.  Buy a low-cost (less than 0.5%) passive large-index mutual fund covering either the S&P or TSX.
"Thanks for the article. A couple questions:  - Is your basic investment premise that as defaults rise, investors will demand higher rates, and thus loans will become more expensive for borrowers? Why can't the lenders include a larger reserve to offset defaults (making loans less profitable for them?), or why doesn't this just wipe out the riskiest tranches of abs? Does it have to result in an implosion in supply?  - ""Since 2009, car loans have exploded over $1.1 Trillion""- wouldn't car loans increase significantly from the bottom of the Great Recession as the economy recovered? Also, the graph shows the billions of car loans. I think you'd have to look at an inflation adjusted loan origination, as cars do not cost the same today as they did 1970, so, you'd expect the total dollar value of loans to be much higher.  - ""How many borrowers are using their cars as collateral for new debt?"" Are you asking how many are refinance their cars? I don't think this is a thing. Cars depreciate and most of the time, the value of the car is less than loan. People may be rolling over into a new car and loan but I don't think they are re-mortgaging their cars. I could be wrong but there has to be information available on this  - ""We do this through purchasing long dated 1-2 year out-of-the-money PUT options on first order stocks""- How do you know where the strike price on these stocks will be? If your very confident, you can sell a call above to offset the cost of the put. Or alternatively, why don't you buy a credit default swap on the abs tranches?"
It doesn't add all that much to your monthly payment amount, compared to what you'd expect - particularly since the monthly payment includes property taxes which won't increase based on the length of the mortgage. Now that we have actual numbers from the OP: So, without cutting anything, you have $2k yourself you can be saving. (This assumes your rent number of $1345 is your portion of rent, and not the 100% amount.) That's $24000 per year, just by yourself. On top of that, you've got another $40k or so coming from your partner, at least some of which should be available as well if he/she is going to be co-owning? But if not, at least you have about $2000 a month you can be saving. You could also downsize the car, cut cable TV, downsize the phone, and have another $500 or so available - but it doesn't really look like you need to do that, given how much you have available now. I'd look at what you're doing with that ~$2000 per month right now, and see how you can free most of it up. You haven't mentioned a few things like utilities, not sure if that's just forgetfulness or if your partner is paying them; so perhaps not all of it is available. But - even $1000 a month is $12000 to add to the $20000 you have now, which makes a big dent in that down payment."
With the $2000 downpayment and interest rate of 11.5% nominal compounded monthly the monthly payments would be $970.49 As you state, that is a monthly rate of 0.9583% Edit With the new information, taking the standard loan equation where Let Now setting s = 98000, with d = 990.291 solve for r
For Option 2 - do you really think you can guarantee an average return of 8% here. Historical returns are no guarantee of future returns.  Even if you could get higher returns for option 2 than the interest rate on the mortgage, are you able to cover all the additional fees with the PMI in placing such a low down payment? The wiser choice in my opinion would be to chose option 1.
"Curious, are you asking about average, or the good numbers? The median family doesn't have $2500 to address an emergency. We are a nation of debtors, and spenders. A young couple at .8 is doing well. It means they saved 20% for a down payment, and just bought a house. Not too tough to buy with 5% down, have no other savings, and a student loan to put the debt to equity over 100%.  Older people should be shooting for zero. I semi-retired at 50, and my mortgage is at about 8% of my net worth. 50% would be too high. Others 50+ should have at least 50% equity in their home and nearly half their ""number,"" the amount needed to retire. So, a target is 25% maximum.  These numbers shouldn't impact you at all. You should plan wisely, spend frugally, and prioritize your goals. There are 'zero debt' people out there who make me look reckless, and others who invest in rentals with a goal of keeping them highly leveraged.  Neither group is wrong, what's right for you is what lets you sleep at night."
The simple answer is yes - put 20% (or more) down. In the past I have paid PMI and used a combination first and second mortgage to get around it. I recommend avoiding both of those situations. I am much more comfortable now with just a regular mortgage payment. The more equity you have in your home the more options you will have in the future.
It's six of one a half dozen of another.   Investing the cash is a little more risky.  You know exactly what you'll get by paying down your mortgage.  If you have a solid emergency fund it's probably most advisable to pay down your mortgage.   If your mortgage is 3% and your investment makes 3.5% you're talking about a taxable gain of 0.5% on the additional cash.  Is that worth it to you? Sure, the S&P has been on a tear but remember, past results are not a guarantee of future performance.
With bad credit but good income, I would simply save a large down payment. You're much more likely to get a mortgage with 25% down and a history of recently saving that 25% to show.
Rules of thumb? Sure - Put down 20% to pay no PMI.  The mortgage payment (including property tax) should be no more than 28% of your gross monthly income.  These two rules will certainly put a cap on the home price. If you have more than the 20% to put down on the house you like, stop right here. Don't put more down and don't buy a bigger house. Set that money aside for long term investing (i.e. retirement savings) or your emergency fund. You can always make extra payments and shorten the length of the mortgage, you just can't easily get it back.  In my opinion, one is better off getting a home that's too small and paying the transaction costs to upsize 5-10 years later than to buy too big, and pay all the costs associated with the home for the time you are living there. The mortgage, property tax, maintenance, etc. The too-big house can really take it toll on your wallet.
"I'm going to answer your questions out of order. Emergency fund: Depending on how conservative you are and how much insurance you have, you may want anywhere from 3-12 months of your expenses on hand. I like to keep 6 months worth liquid in a ""high-yield"" savings account. For your current expenses that would be $24k, but when this transaction completes, you will have a mortgage payment (which usually includes home-owners insurance and property taxes in addition to your other expenses) so a conservative guess might be an additional $3k/month, or a total of $42k for six months of expenses. So $40-$100k for an emergency fund depending on how conservative you are personally. Down payment: You should pay no less than 20% down ($150k) on a loan that size, particularly since you can afford it. My own philosophy is to pay as much as I can and pay the loan off as soon as possible, but there are valid reasons not to do that. If you can get a higher rate of return from that money invested elsewhere you may wish to keep a mortgage longer and invest the other money elsewhere. Mortgage term: A 15-year loan will generally get you the best interest rate available. If you paid $400k down, financing $350k at a 3.5% rate, your payment would be about $2500 on a 15-year loan. That doesn't include property taxes and home-owners insurance, but without knowing precisely where you live, I have no idea whether those would keep you inside the $3000 of additional monthly home expenses I mentioned above when discussing the emergency fund. That's how I would divide it up. I'd also pay more than the $2500 toward the mortgage if I could afford to, though I've always made that decision on a monthly basis when drawing up the budget for the next month."
Using the following loan equations where  and With the balance b[n] in period n given by Applying the OP's figures Check & demonstration Switching to $96 payment every 10 days, with 365.2422 days per year  Paying $96 every 10 days saves $326.85 and pays the loan down 2.68 months quicker.
Just echoing the other answers here. You're not ready yet. 3% down, or no money down loans are what got so many of us into trouble these last few years. It sounds like you make a pretty good living and are able to squirrel away money despite paying rent. Let me suggest something that I haven't seen here yet. Save  up for a 20% down payment. You will get better rates, won't have to buy mortgage insurance and it will give you enough of a cushion on your payment that you could better weather a job loss or other loss of income. Your priority for saving are, in order: Home prices aren't going up any time soon, so you're not going to miss out on a great deal. Keep your expenses low, treat yourself and your kids once in a while and keep saving.
1- Wells Fargo does not own our current mortgage. They have bundled it and sold it as an investment. 2- They make their money from 'servicing' the loan. Even if they only get $50 per month to service it (3% of our monthly payment), that adds up to $50,000,000 per month if they have a million homes under management. That is $600 million per year for each million homes being serviced 3- Managing the escrow gets them additional profit, because they can invest it and earn 2-3%. If 1,000,000 homes have an average balance of $2,000 in their escrow accounts, they can earn up to $60 per year, or $60,000,000 annually. 4- They make $1,000 every time they refinance the home. This is the approximate profit after paying real closing costs. Refinance those million homes, and you make a cool billion in profit! 5- They also want to be sure that they keep us as a customer. By lowering our payment, they decrease the likelyhood that we will refinance with someone else, and we are less likely to default. (Not that they lose if we default, because they don't own the loan!) 6- they make additional profit by paying off the old loan (they don't own it… remember), then packaging and selling the new mortgage. Since they are selling it as a security, they sell for future value, meaning they sell our $200,000 loan for a valuation of $360,000. This means that they sell for $200,000 PLUS some fraction of the additional $160,000. Let's say they only want a 10% premium of the $360,000 valuation. That means they sell our $200,000 loan for $236,000. They pocket $36,000. If they make a million of these transactions every year, that is $36 billion dollars in profit So… Wells fargo refinances one million homes every year, and they make: $36,000,000,000 initial profit for selling the loan (with absolutely no risk!)
First, let me fill in the gaps on your situation, based on the numbers you've given so far. I estimate that your student loan balance (principal) is $21,600. With the variable rate loan option that you've presented, the maximum interest rate you could be charged would be 11.5%, which would bring your monthly payment up to that $382 number you gave in the comments. Your thoughts are correct about the advantage to paying this loan off sooner. If you are planning on paying off this loan sooner, the interest rate on the variable rate loan has less opportunity to climb. One thing to be cautious of with the comparison, though: The $1200 difference between the two options is only valid if your rate does not increase. If the rate does increase, of course, the difference would be less, or it could even go the other way. So keep in mind that the $1200 savings is only a theoretical maximum; you won't actually see that much savings with the variable rate option. Before making a decision, you need to find out more about the terms of this variable rate loan: How often can your rate go up? What is the loan rate based on? I'm not as familiar with student loan variable rate loans, but there are other variable rate loans I am familiar with: With a typical adjustable rate home mortgage, the rate is locked for a certain number of years (perhaps 5 years). After that, the bank might be allowed to raise the rate once every period of months (perhaps once every year). There will be a limit to how much the rate can rise on each increase (perhaps 1.0%), and there will be a maximum rate that could be charged over the life of the loan (perhaps 12%). 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.
"You are assuming 100% occupancy and 100% rent collection.  This is unrealistic.  You could get lucky and find that long term tenant with great credit that always pays their bills... but in reality that person usually buys a home they do not rent long term.  So you will need to be prepared for periods of no renters and periods of non payment.  The expenses here I would expect could wipe out more than you can make in ""profit"" based on your numbers. Have you checked to find out what the insurance on a rental property is?  I am guessing it will go up probably 200-500 a year possibly more depending on coverage.  You will need a different type of insurance for rental property. Have you checked with your mortgage provider to make sure that you can convert to a rental property?   Some mortgages (mine is one) restrict the use of the home from being a rental property.  You may be required to refinance your home which could cost you more, in addition if you are under water it will be hard to find a new financier willing to write that mortgage with anything like reasonable terms. You are correct you would be taking on a new expense in rental.  It is non deductible, and the IRS knows this well.   As Littleadv's answer stated you can deduct some expenses from your rental property. I am not sure that you will have a net wash or loss when you add those expenses.  If you do then you have a problem since you have a business losing money.  This does not even address the headaches that come with being a landlord. By my quick calculations if you want to break even your rental property should be about 2175/Month. This accounts for 80% occupancy and 80% rental payment.  If you get better than that you should make a bit of a profit... dont worry im sure the house will find a way to reclaim it."
One scam that happens occasionally is that of the forced placed insurance.  Either the home owner fails to pay the premium,  or,  which is not uncommon,  the bank claims that the existing insurance does not meet their (obscure/undocumented) criteria,  and buy insurance on the owner's behalf...
All the high wealth individuals I know when this route, for two reasons - first of all, they didn't have to deal with insurance companies (or pay sky-high rates on account of all the speeding tickets they picked up) and secondly, they made their deposit with government bonds they had in their portfolios anyway, and they could still collect the interest on their self-insurance deposits. Of course, this meant that if they wrecked or dinged up their Maserati or Bentley or whatever, they'd be out of pocket to repair or replace it... but I guess if you can afford one $200,000 car, you can afford to buy a second one if you wreck it, or get by riding one of your other luxury automobiles instead. Since someone else mentioned kidnapping insurance, I'll point out here that what Robert DeNiro did in Casino when he put a couple million dollars into a safety deposit box for his wife to use if he was kidnapped or needed to pay off a government official is essentially the same thing as ""self-insurance"". Putting money away somewhere for unexpected events in lieu of buying an insurance policy against them. In real life, the very wealthy will often do this with US treasuries, government bonds and other interest-bearing, safe investments. They make a little money, diversify their portfolios and at the same time, self-insure against a potential big loss. This is another insurance area where even the very wealthy are remarkably similar to the rest of us, in that they all generally have it, yes, although the reason is a little different. For normal folks, the home they own is generally the largest part of their net worth, or at least a very substantial fraction, for those older folks with retirement savings that exceed the value of their homes. So for us, we have home owners insurance to prevent a catastrophic event from wiping out the lion's share of our net worth. If you're an ultra-wealthy individual who can afford an 8 figure home, that's not really the case (at least with the ones I've dealt with, who made their fortunes in business and are good managing their wealth and diversifying their assets - could be different for sports stars or the entertainment industry), and these people generally own multiple homes anyway, so it's not as big a deal if they lose one.
"&gt;I agree the numbers are bunk, however the 900k figure is the ""opportunity cost"" of a moderate income family 60k-100k and not the actual. The problem with that... is that *sans kids* most people really don't have much incentive to work all that hard. * You don't need anywhere NEAR as big of a house (heck, as a single or childless couple, you don't need a house, you can easily just rent a small studio or 1 BR apartment). * You don't need a minivan (or ""crossover"" or whatever the heck they call the equivalent of a station wagon these days). * You are feeding a LOT less people. * You don't need to worry about keeping anyone in shoes or clothes and buying new shit every year (provided you control your weight, of course, and don't ruin good clothing or follow ""fashion trends"" like a fool). * You don't have to plan &amp; take expensive ""Disney"" vacations for anyone, much less a group of 4 or 5 (or more) people. * You don't have anyone to ""send to college"" or a teenager to ""buy a car for"" (much less pay insurance to cover). * You can pretty much ignore the vast majority of life-insurance costs (if you're single, do you really give a shit who gets anything if/when you croak?) * Likewise with health-insurance -- dirt cheap while you're young, and even cheap when your middle aged if you have no kids (and with good reason, no ""pregnancy/birth"" costs, no vaccinations or childhood diseases, no tonsil-removal operations, etc.) * Etc. Quite seriously, **people without kids simply don't have as many REASONS to work like ""slaves"".** A single person or childless couple can easily buy a home, car and other assets and pay it all off in a few short years (certainly less than a decade) -- **and live content &amp; fairly well on a minimal income** after that.
"Why would you give them the money and borrow it back?  If you didn't give it to them in the first place you wouldn't need to borrow!  It makes no sense at all. It USED to have a different use--as a tax dodge.  You would buy ""life insurance"" for a low amount of coverage and way overfund it.  Let the money grow and in your later years you would ""borrow"" against the extra value you had built up in the policy.  Since this was a loan rather than a payout it wasn't income.  When you died the tax liability went poof. Thus so long as what you had to pay in life insurance + the inefficiency of the insurance company was less than the tax rate it was a good deal. Congress closed this loophole a long time ago by prohibiting too great overfunding."
Some part of the payment is probably also going for tax escrow, insurance payments, probably PMI if you aren't  putting at least 20% down. Get a complete breakdown of the costs. Remember to budget for upkeep. And please see past discussion of why buying a home at this point in your career/life may be very, very premature.
It has a 1% chance per year of being destroyed by some random event (flood, fire, taxes, pitchforks). You can buy insurance against this for 2% of its value per year. It even covers pitchforks. On its face this looks like a bad deal. Your expected loss is only 1%, but the cost to hide the loss is 2%? If this is your only asset, then the loss makes your net worth 0. The log of zero is negative infinity. Under Kelly, any insurance (no matter how inefficient) is worth it. This is a bit of an extreme case, and we'll cover why it doesn't apply even when it seems like it does elsewhere. Now suppose you have 1 million dollars in other assets. In the insured case, we always end the year with 1.98 million dollars, regardless of if the disaster happens. In the non-insured case, 99% of the time we have 2 million dollars, and 1% of the time we have 1 million dollars. We want to maximize the expected log value of our worth. We have log(2 million - 20,000) (the insured case) vs 1% * log(1 million) + 99% * log(2 million). Or 13.7953 vs 14.49. The Kelly Criterion says insurance is worth it; note that you could ""afford"" to replace your home, but because it makes up so much of your net worth, Kelly says the ""hit it too painful"" and you should just pay for insurance. Now suppose you are worth 1 billion. We have log(1 billion - 20k) on the insured side, and 1%*log(999 million) + 99% * log(1 billion) on the uninsured side. The logs of each side are 21.42 vs 20.72. (Note that the base of the logarithm doesn't matter; so long as you use the same base on each side). According to Kelly, we have found a case where insurance isn't worth it.
You need to get some thing called landlord insurance, tenants only covers his belongings. Any property damage caused deliberately or unknowingly is not covered in this, its upon the owner to get landlord insurance.