Depends on the price of the home

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I'm at a fork in the road (age 47), and i have two paths - just wanted to see what the folks here would do in similar situations. i have $88k left on my mortgage (house worth $300k, original $180k cost). mortgage and interest is about $900 a month. i pay an extra $1k a month towards principle – been doing it for quite a few years. option 1) stay working in a fairly high stress job (about $130k a year), have the house paid off in 7 years or so. continue my normal $1k per month to the 401k ($160k now, started late). leaving my current job soon, new company – so transfer $80k cash pension into ira. i can retire at 60 or so, and have $500k to $800k in the assets at retirement. option 2) lower paying job, less stressful (maybe $60k a year). pay off the house with the combination of cash ($70k) and some of the cash pension. that would leave me with $180k-$190k in ira/401k), and $300k house paid off. assets would be lower, lower monthly bills, and no mortgage monkey. thoughts?

Your pension is underfunded at your age. And you're thinking about drawing it down, taking a lower paying job and contributing less to it going forward (due to the lower paying job). I too have a have a stressful job. A bit older than you and over $700,000 in retirement assets (2 401K's and an IRA), another $350,000 in stocks and mutual funds and over $250,000 in money markets and other short term investments. And my condo is worth about $500,000 and I just paid off the mortgage with a large bonus I just received. And I don't think I'm ready yet either. But before I retire I want to be sure I can still afford my Sox tickets, go on ski trips and otherwise continue to enjoy my life. If you're willing to live a lifestyle well beneath what you enjoy now, maybe your plan works. But I'd want to be more secure myself.

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I make a little over $100k a year (anywhere from 100k to 120k - it varies). i have no debt other than a car payment ($300). i am self employed, my business expenses are $1500 a month. my fico score is around 730 or so at all the credit bureaus. i live in los angeles and as a single female want to live in a safe area (hollywood hills, burbank, west hollywood). i want to buy a place costing between $400k and 500k. what sort of mortgage can i get? i am thinking that i may be forced to settle for something costing in the $300k range. should i wait until i can bump my income up to the $150 to $175 range to purchase a condo?

In general, I would buy sooner rather than later. But in some areas, real estate prices are soft, and it might be good to wait a few months (which you could use shopping). Your numbers should qualify for almost any sort of financing you wish, and there are lots of choices; one place to look is www.mlcc.com, the real estate lending arm of Merrill Lynch.

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I an trying to figure out how much it will cost me to afford all the things i will want. i know i went wrong somewhere wrong here: can you take a look and let me know where you think i went wrong? high lifestyle, high cost new lambo gallardo (10% interest)-appx$6900/ month(4 year loan, cost $300k, ttl 330k) mercedes ml63 amg (10% interest)- appx$2300/ month(4 year loan, cost $100k, ttl 110k) casual vehicle (10% interest)-appx$1150/month(4 year loan, cost $50k, ttl 55k) mortgage ($720,000 house- 10% interest)-appx$3300/ month(20 year loan, ttl $792,000) groceriesappx$400/ month($100/wk) cable, internet, tvappx$200/ month cell phone appx$75/month luxuries appx$1000/month electricappx$250/ month savingsappx$1000/month car, health, home insuranceappx$1000/month demanding salary- $210,600 high lifestyle, lower cost new lambo gallardo (10% interest)- appx$1900/ month (15 year loan, cost $300k, ttl 330k) mercedes ml63 amg (10% interest)- appx$1550/ month(6 year loan, cost $100k, ttl 110k) casual vehicle (10% interest)-appx$770/month(6 year loan, cost $50k, ttl 55k) mortgage ($720,000 house- 10% interest)-appx$2200/ month(30 year loan, ttl $792,000) groceriesappx$400/ month($100/wk) cable, internet, tvappx$200/ month cell phone appx$50/month luxuries appx$400/month electricappx$225/ month savingsappx$600/month car, health, home insuranceappx$1000/month demanding salary- $111,540

Just some thoughts... Insurance is understated. Medical insurance alone is close to the whole budget. There is a lot of $$$ in cars and the money allowed will not insure them. BTW, where is money to buy fuel for them? Or maintenance? Disc brakes for a lambo are about $30,000 each. Savings is way too low. It would better to have 10-15% into savings after at least 6 months of expenses is in savings. Groceries isn't budgeted high enough. Oh, yeah, don't forget the tax man. Plan on 30 plus percent going to him for income and FICA. House maintenance? Where is that funded? Lawn care? Water/sewer/garbage? Furniture? Clothing? Do you have house appliances? Maintenance on them? In short you have most of the biggies, but the rest is missing.

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I have a 300k 1st mortage at 5.75% and a 2nd at 50k at 9%. what options do ihave to knock my payment lower?i pay 458 a month on the 50k loan. and in 15years it will balloon.my home is only worth 409k so if i refinance i will have to pay pmi and 10k in closing costs. anyone have any ideas or options to help me lower the payment?

Request an amortization for both the 1st and 2nd mortgage. It will give you a break down between interest/principal. If your first mortgage is 30 years, you pay about 70% in interest on the first 15 years, on the 2nd, you'll pay 70% on the first 7.5 years. That's how banks make their money

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Here is my situation: i earn $110k a year, same company for 28 years. i have a credit score over 800 i have about $70k cash on hand. $750k in 401(k) $100k in roth ira no debt besides a half paid off house. the house is worth $200k and i own about $110k i want to buy a fourplex in my neighborhood. it is currently occupied with leases, the first lease ends in late 2011, so i should be set for a year. rent comes in at $3200 a month it costs $300k, so i want to put 10% down. the banks i called asked for 25% down because it is an investment property. honestly, if i get approved for a 30 year mortgage at 10% down i should be making money on this property from day one. is there any bank lending like this? i tried bankrate.com and called all those banks and they all insisted on 25%, which really ties up too much of my cash.

Google is your friend in this regard. Google "portfolio lender" and the name of your town. A portfolio lender doesn't sell their notes, they keep them and service them themselves. Because they don't have to fit your application to Fannie or Freddie criteria, they can be more creative. A good rule of thumb is if the bank is an S&L or credit union, they're probably portfolio lenders. You'll meet with a decision maker. Your deal looks good on the financials, he/she will probably be equally interested in your experience as a manager, and what plans you have for the property. You kind of have to sell yourself to the lender....as much as you try to convince them the property makes sense financially. They may make an offer right then, or they may take a drive by the property and make an offer later. A potential sticking point is these lenders usually want a building with 5 or more units. BTW, gone are the days of non-recourse loans on investment properties, you will have to sign a personal guarantee. These type of notes usually don't come with a 30 year amortization. They're more likely a 25 yr amort w/ first 10 fixed. After the ten years you'd either re-fi, or the note would adjust w/ a 2 point wiggle on the yearly adjustment tied to the 10 year treasury or the prime rate. I'd guess right now you'd be looking at 7.5 to 8% on this type of loan. To increase your chances of getting by with 10% down, you coluld look at a 15 year fixed which would give you $700+/- monthly positive cash flow after principal and interest, but before RE tax, insurance, any utilities, and maintenance reserve.

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We are paying rent for 1800 a month for the last 5 years and we feel that we are really wasting our money . we have been offered a 300-350k for a mortgage on a fixed interest of 6.5%. our dilema is that how much will we get back after 10 years if we bought a 300k house and sell it in 10 years time. we need the cash then to start life in another country where cost of living is lower. what will actually happen if we can only sell the house at the price we pay for it when we buy the house. we really appreciate your response very much.

I guess the question is, what have you lost NOW for having paid $1800/month for the past five years..... I guess that is my Realtor talk there, but seriously, your value WILL increase unless you buy in a super high risk area like New Orleans or on a fault line or something and the place falls into the earth. Although most of the market in the US is slower now, it is still better than getting NOTHING while renting. You have just made someone ELSE rich. You ARE paying HIS mortgage AND taxes and HE gets the tax benefit of home ownership that YOU DON'T GET NOW!!! Just for the tax benefit alone, I would own!!! Ask your mortgage broker to show you the tax benefit of home ownership!!!! GOOD LUCK

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Consider this situation: a young family with 2 dependent kids that has a $300k mortgage. the life insurance agent recommends a whole life policy of $100k for the husband, $30k for the wife, and even 2 smaller whole life policies of $50k on the little kids. the kids have more coverage than the wife! the agent says its a great savings program for your kid's education. so this family have 4 whole life policies and they pay a total of $2500/year for it. if you guys know how whole life insurance works, you would know its a total ripoff. but anyway, lets focus on the coverage. god forbids if either the husband or wife dies, how will that be enough to pay off the mortgage and protect their kids? if i met this family, i would cover them all in one single 30 year term policy and give the parents the right amount of coverage for 1/3 of the price they pay currently. i would of ask if the parents really want coverage on their kids. if they do, i would just add a child rider that would of cost an extra $6/month and it would cover all their kids from 14 days old to age 25 years old. i would of told them about real college savings plans such as 529 plans, ugma/utma, and coverdell esa. i would of told them about retirement plans such as traditional ira or roth ira or annuities. by the way, i did do all the second part for this family and replace all their whole life policies. i saved them $1500/year and educated them about how to invest it in mutual funds and using some of the savings to pay off their debt. there should be laws on finding the suitability factors on which life insurance policy is right. it should take into account the total earn income, total debt, how much they spend, how much they save, do they have dependent kids and how old is the youngest child, and so on. a life insurance application doesn't ask for any of this except for age, sex, health questions, and family medical history.

Its because insurance companies have lobbyists that pays millions to politicians. In New York, you can't even replace a life insurance policy until weeks later. You would have to send forms to the insurance company you want to replace and the insurance company have to send the information to the client giving full disclosure about the policy. The problem is that the insurance company takes their time in sending out the required information, but I believe they have 60 days to comply. They usually take 30 days to send the information. After the client has received the information, then you can replace the life insurance policy. Its the most stupid law I ever seen. What if you try to give the client more coverage for less premiums and the client dies before receiving the required information? Instead of dying with $500k coverage that you are trying to give to the client, they die with $100k coverage from their current policy.

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Hi everyone, i'm a first time home owner and have no experience with home buying terminology. i do have a realtor at this time. i'm looking to buy a single family home for about $250k - $300k max, prefer somewhere in the middle around $285k. my credit score is 784 from all 3 credit agencies. i have $60,000 cash for down payment. i have $0 debt. no car payment and rent is $500 a month (rent a room). i own a $30,000 car and $5,000 car free and clear. my annual income is $60,000+ . i have been asking around and it doesn't seem like i will be having trouble getting a loan. i was looking at the fha and conventional loan. since my down payment budget is $60,000. if i were to purchase a house with conventional loan of purchase price $285k and 20% down payment would be $57,000 that would leave me $3000 for closing cost which is cutting it really close. i was thinking about putting down 15% on a fha loan $42,750 which would leave me $17,250 left for closing cost and mip. the upfront mip will be 0.0175 of the loan amount $24,2250 which will be $4240. i believe under the new fha mip i will have to pay the mip monthly for 5 years until i can get the house appraised and have mip removed. the monthly mip will be $112 for 60 months that would be $6720. so basically if i go with fha 15% down i will have to pay a total of $10960 for mortgage insurance. what if i go with a traditional loan and put down 15% and get pmi for 2 years. so my confusion is should i do mip or pmi if i only want to put 15 % down ? if you guys have any other suggestions please let me know. thanks

Yes 20% down would be your perfect world but if you must do 15% down then I would ask the loan officer to give a print out showing the PMI rate on conventional compared to the FHA MIP rate. No up front PMI like FHA's MIP. Monthly PMI rate should be lower than FHA's with your great credit score and 15% down. Unless they've changed the rules since I got out of the business...You're PMI drops off when you have the house paid down to 80% of value . FHA's MIP falls off when you have it paid down to 78% of value. (And yes you would need an appraisal to prove this in 5 years.) **Upfront MIP can be rolled into your loan amount and doesn't have to be paid out of pocket at time of closing. **But where in the world are you thinking of buying that would require $17,250 for your transaction? That's at least $2,000 too much for closing and upfront MIP where I come from. Sellers are allowed to pay 6% of sales price (in closing costs and prepaids) for FHA and for conventional loans if you write your offer that way and they accept it. (Sellers can pay 6% on conventional if you are putting at least 10% down and if your contract is accepted specifying that the sellers contribution applies to your prepaid items as well as closing costs.) That should more than cover everything. We are in a buyer's market. The seller should contribute to closing costs! I understand that some sellers right now are victims of falling house prices so maybe they don't have enough equity to help pay many closing costs...but they need to agree to pay part of them if they want to get their home sold! Hope this helps!

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I am a 24 year old male living in nj and make 70000. i have 20% to put down on a 300k home and if i buy the house i plan to then, after mortgage and property taxes i have $900 left / month. (this $900 i will have already removes my 6% of my pay going into a 401k and 7% going into an employee stock plan (guaranteed 10% at end of year)) i have about 10k+ saved up in case anything goes sour. after all bills i figure i will be able to save $400/month. i am currently going for my mba and paying for it but my company re-reimburses me for that so i do expect my salary to go up. is saving $400 enough to get buy? i currently live at home and can stay as long as i want really but i want to get out on my own. i may rent out one of my three bedrooms of my house to help cover my property taxes. the property taxes in nj are much worse than the housing costs. use all the information above and add that in 3 months i will have a total savings of $100k to play with. i will put the down payment, closing costs, furnishing, and emergency 10k+ from this pot. with this said, anyone see a reason not to move out? i feel job is secure and company is growing. prices are low (for nj) now and i am just waiting for a slight drop in rates along with some more cash.

right now i would place you in the top 4% of folks in the work force on having a great plan!!!

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It's pretty simple ....i dont want to be left with his huge debt ,mortgage .cc's etc. i'm encouraging him to revise his will but he absolutely refuses to even discuss it (denial) his assets come no-where near where his debts are at especially his 300k mortgage and only something like 20k in his 401k, i'll probably try to consolidate his debt but also the funeral ,personal loans totalling over 450k to some pretty pissed people so i'm looking for a low cost solution here ..has anyone heard of aig term life?? and can i use his 401k to pay it off..i bet he'll die within 1year (likely less probably 6 months) i need the coverage to be 4-5 million & need atleast 600k in cash to pay his personal debts so am i going about this all wrong?? if you can provide links that'd be great. also does anyone know of any good estate planning firms or any other financial person i should be in contact with? thank you so so much, i'd be lost without yahoo answers i actually do inherit his debt....the people my father borrowed from arent exactly going to forgive his debts! sorry if i didnt make that clear! is there any other way i can get money from my father dying? if i don't get atleast 1 mil.... i'll probably be dead and my son has to deal with it my father was a compulsve gambler , liar, alcoholic and wife beater and the only thing i regret is he wont live long enough to pay off this debt i have $2mil in liquidable assets but need atleast $1mil more hah ! it's not the mafia or something it's just my dads business partners.. metophorically speaking seems the old bastard wotn die for atleast 2 years , good!

Legally you won't be liable for your father's debts. But life insurance is no solution at this point, since no insurance company will take that bet. If you are worried about your personal safety, why don't you liquidate your considerable property and disappear? Start over somewhere else in an untraceable way? Have you ever seen the Shawshank Redemption? You may want to review the end of the movie or see how the Witness Protection system works.