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Lumix2010 01-01-2011 10:58 AM

Mortgage advice
 
I recently moved to Maryland and plan to buy a new home near where I work. I expect to pay around 500,000, but do not have the funds to pay a 20% down payment. Options are to take out a home equity loan on a home I own out right in New England that I can't sell due to the market, borrow from my 401k, borrow from friends and family, or get a cash advance on my credit cards. I have no debt, a well paying job, and non-liquid assets (retirement funds, my previous home) to cover the loan if problems arise in the future. I can see pros and cons to each option and am having trouble deciding what the best course of action is. Any advice would be appreciated.

cjscully 01-03-2011 02:37 PM

Re: Mortgage advice
 
My usual advice for people in your situation is this:
There are numerous mortgage calculators online (just Google it), use one of them to calculate the monthly payment based on an FHA loan with a 3.5% down payment. If your housing payment - principal, interest, taxes and insurance - based on that calculation would be below 30% of your income (28% would be even better). Then an FHA loan with the low down payment would be an option for you.

If the housing payment exceeds that 30% figure, you're better off waiting to make the purchase until you have saved a sufficient down payment to ensure your housing payments are affordable.

Don't borrow from any source to come up with a down payment. Most lenders do not allow borrowed funds to be used for a down payment. It will also put added strain on your finances because you'll end up with the mortgage payments plus the payments on the down payment. That's just not a good scenario.

goodyphilips 01-07-2011 10:25 AM

Re: Mortgage advice
 
If you have an excellent credit score(do you?) then some lenders might loan you with out any down payment.

familyof7 01-26-2011 11:47 AM

Re: Mortgage advice
 
You need to do a mortgage calculator to see what you can afford. That is obvious. I don't normally agree with borrowing money for a down payment, however if you have enough equity in your other house than that in my mind is a temporary transfer of assets till you get the other house sold. Here are some of my thoughts:

Low down payment means you have to pay costly PMI, so I would not do less than 20%

401K loan is immediately due if you lose your job, never a good situation

Credit Card Advancement - I would try to eliminate all your credit cards and avoid having any of that debt

Home Equity Loan - Using an asset you currently own, could take a tax deduction on the interest and will mostly likely give you the best interest rate.

goodyphilips 02-02-2011 02:47 AM

Re: Mortgage advice
 
Oh yes mortgage calculator would be the best option for you, it will help you find out the information you are seeking yourself.

RichS 02-02-2011 12:30 PM

Re: Mortgage advice
 
Some good advice here. Start with a mortgage calculator, which you can find on line for free, and then decide which way you want to go. You are in a very good position right now but you don't want to take a step backwards by taking on additional new debt.
Maybe you can "rent to own" so you don't have to borrow. With the housing market in the mess it is most people are willing to be creative. Give it some thought.

RichS CFP(r)
www.insimplelanguage.come

dalemdunn 02-28-2011 10:44 PM

Re: Mortgage advice
 
Quote:

Originally Posted by RichS (Post 21503)
Some good advice here. Start with a mortgage calculator, which you can find on line for free, and then decide which way you want to go. You are in a very good position right now but you don't want to take a step backwards by taking on additional new debt.
Maybe you can "rent to own" so you don't have to borrow. With the housing market in the mess it is most people are willing to be creative. Give it some thought.

This is a good advice. Rent to own is the best thing if you cannot outrightly pay for DP, or if you are fine with getting a cheaper type of mortgage. But that do not mean it is bad at all. Just be practical of what you can afford.

90mortgages 03-02-2011 06:32 AM

Re: Mortgage advice
 
I hope you have excellent score. In such cases the lenders can help you without any down payment

littleroc 04-01-2011 11:48 AM

Re: Mortgage advice
 
How much are you underwater on the house in New England? That will effect my advice I give you.

lerrygibson 04-28-2011 02:42 AM

Re: Mortgage advice
 
Well it is necessary to first look for how much we are in underwater and then asking for advice that will be worth necessary and after that calculating it through mortgage calculator.

samson smith 08-13-2011 04:09 AM

Re: Mortgage advice
 
Quote:

Originally Posted by Lumix2010 (Post 20446)
I recently moved to Maryland and plan to buy a new home near where I work. I expect to pay around 500,000, but do not have the funds to pay a 20% down payment. Options are to take out a home equity loan on a home I own out right in New England that I can't sell due to the market, borrow from my 401k, borrow from friends and family, or get a cash advance on my credit cards. I have no debt, a well paying job, and non-liquid assets (retirement funds, my previous home) to cover the loan if problems arise in the future. I can see pros and cons to each option and am having trouble deciding what the best course of action is. Any advice would be appreciated.

Ok, I have some advice for you. Firstly, start your mortgage meter and calculate your monthly payment that is pay by you in every month. I think this give you an idea to choose the best option.



samson smith 09-26-2011 07:59 AM

Re: Mortgage advice
 
If you are in the market to purchase or sell the home then you need some mortgage advice. First you go to your local bank to get the advice you are looking for, but this may not be the best option for you. When you need mortgage advice then you need a professional that deals with the mortgages.

andysmith 10-18-2011 04:11 AM

Re: Mortgage advice
 
It is better to use your resources for any type of borrowing. lots of people advised you to go for a mortgage calculator and i also believes that it is the best option you have in this situation.

samson smith 12-14-2011 02:22 AM

Re: Mortgage advice
 
Thanks for the advice of Mortgage calculator!!

margauxmorgan 01-20-2012 04:48 AM

Re: Mortgage advice
 
online loan calculators are really helpful d^_^b
i use the ones in loan calculator formula . com
where do you get yours?


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