Need advice from a property appraiser

[Zerk]

Whole life insurance....
reasons to never get whole life insurance

Term life is what your supposed to get. People should walk away from whole life as fast as then can.

 

[Zerk]

Instead of paying 12k in costs, you could use that money for working on house. I can't believe anyone would consider 12k on 5ok loan, plus interest.

If I say what I think, I will get censored

 

[BigCountry1689]

Not exactly sure how you reached that conclusion. I earn 6 figures and my wife earns high 80s. Our debt to income ratio on the back end is 27 percent. I have only one financed vehicle, I drive a 2008 Nissan Frontier paid off. And 1 credit card with a 40% balance. Because I choose to finance projects that should appreciate in value as opposed to using my savings account, I dont think that is living above my means. Further I dont think that because the house dosn't contain the equity to reach an 80% LTV and complete both projects at once is not a matter of fiscal responsibilty but more a sign of the housing market in my area. I dont think I said I would have an issue paying my mortgage it was more making the numbers work out to were I could keep my money in the bank.

 

[BigCountry1689]

Term life is what your supposed to get. People should walk away from whole life as fast as then can.

Apparently you missed my post on what I pay for my policy.

No matter what it appraises for, you have to pay the loan.

Sounds like you living beyond your means.

 

[BigCountry1689]

Instead of paying 12k in costs, you could use that money for working on house. I can't believe anyone would consider 12k on 5ok loan, plus interest.

If I say what I think, I will get censored

That would be why I said I was meeting with the lender to look at numbers.

I ended up refinancing with A different lender. I used the bank my inlaws financed with called Trustco bank, they did a 30yr refi at 3.75% I dont know the closing costs yet but should be between $1600-$2000. They pay for appraisal which should be completed next week and they finance at 89.9% LTV.

 

[TheMan419]

I pay very little for mine through my employer. Not looking for a public sector debate..... but I get $500,000 for $12.28/mo, for my line of work that is worth it for me to know my wife wont have a mortgage. I will admit that I did not do the research I should of I just signed and accepted when I was hired. But I was reading through tonight while at work and is says there is a cash value over time. Now what that is I don't know, I don't believe in unicorns or free money, but if its there I will use it. I figure for a term policy I will pay slightly less then what I pay for my whole life so its a wash.

Only issue with that is if you should pass away before the loan is paid off the wife gets less $$ because they will repay the loan out of the death benefit. Although if you took out a mortgage she would have to pay that back. So likely a wash.

$12.28/mo for $500K is a good deal even for term. If it is building cash on top of it, your employer is subsidizing it somehow.

 

[BigCountry1689]

Only issue with that is if you should pass away before the loan is paid off the wife gets less $$ because they will repay the loan out of the death benefit. Although if you took out a mortgage she would have to pay that back. So likely a wash.

$12.28/mo for $500K is a good deal even for term. If it is building cash on top of it, your employer is subsidizing it somehow.

They have it all through one company (STD, LTD, LIFE, ACCIDENT,ETC...) so Im sure they are pushing some money into it. After 14 years it has a cash value of $3,100 so nothing to even fool with but still a good emergency fund if its ever needed.

I have USAA for my home insurance policy and I pay for a accidental death, dismemberment rider that comes out to approx. 75/yr. So if the wife or I croak the mortgage is paid up to the current amount owed. Now when the mortgage gets down to a point that it is no longer fiesable to keep that rider I will delete it.

***I know insurance is one of those topics that people believe is either a waste or a sleep easy. Me, I believe if priced right that it is valuable for my families future.

As of right now it seems like the Trustco loan will give me everything I am looking for, we shall see if it stays on course.

 

[Zerk]

Not exactly sure how you reached that conclusion. I earn 6 figures and my wife earns high 80s. Our debt to income ratio on the back end is 27 percent. I have only one financed vehicle, I drive a 2008 Nissan Frontier paid off. And 1 credit card with a 40% balance. Because I choose to finance projects that should appreciate in value as opposed to using my savings account, I dont think that is living above my means. Further I dont think that because the house dosn't contain the equity to reach an 80% LTV and complete both projects at once is not a matter of fiscal responsibilty but more a sign of the housing market in my area. I dont think I said I would have an issue paying my mortgage it was more making the numbers work out to were I could keep my money in the bank.

You have credit card debt, you are living beyond your means, if that is what you meant.

You want to take a loan out, so you can take another loan out.

No project will yield 100% return. Maybe if you do all the work yourself you will get close.

You want to borrow money, so the house will go up, so you can borrow more money.

Get a lawn chair and save money for the porch. 20k loan so you can sit outside.

 

[Zerk]

If you male so much money, why don't you cash flow this?

 

[BigCountry1689]

You have credit card debt, you are living beyond your means, if that is what you meant.

You want to take a loan out, so you can take another loan out.

No project will yield 100% return. Maybe if you do all the work yourself you will get close.

You want to borrow money, so the house will go up, so you can borrow more money.

Get a lawn chair and save money for the porch. 20k loan so you can sit outside.

I dont think I could be clearer without giving you my W-2 but I dont find myself in any financial crisis. I do believe pulling equity from a home has been a common choice with homeowners for quite a time. And seeing as how I live in a rual area that does not see quick turnaround in the real estate market I have to make desicions on how to complete certain projects. This is the choice I made when I decided to live 1hr 25min from work. If you read my first post it said I do have the funds to complete 1 project but I am not gonna open up a CD just to pay for a porch when I can finance it. I said I have "A" credit card, I would hardly call 40% balance living beyond my means. I choose to have a revolving line of credit because it is needed to maintain a credit score not to mention that I dont like traveling with a debit card.


It appears that you are one of those people who like to give advice based on how you live. I live a comfortable lifestyle and as previously stated I would prefer to keep my money where it is making money. If I choose to take out 40 loans and pay $75,000 to closing costs it is my choice. I dont believe that when I started this thread it was titled financial advice from zerk. So now that I have found a solution that fits within the relm of what I was looking for I will place you on the ignore list as your one of those people I dont feel like bantering with. Good luck on your next thread and my sympathy to that poster.

 

[JMER817]

There is good debt and bad debt...taking a loan on a home that should appreciate over time and where you can write off the interest while you make a nice return in your CD makes sense to me.

 

[Zerk]

Most people do not understand what deductions are. You pay 10k, and get 2.5 back.

It is best to have no deductions.

As far as being normal to use your house as a piggy bank, lots of people learned a lesson on that.

You are making money, but have to use credit cards. With the money you are making, if you were not a normal American, you could just pay for this.

A study was done. 100% of foreclosures had mortgages.

You should check out Dave Ramsey.

 

[Zerk]

There is good debt and bad debt...taking a loan on a home that should appreciate over time and where you can write off the interest while you make a nice return in your CD makes sense to me.

There is no good debt. The debtor is slave to the lender. You could pay your house off, and invest what was mortgage payment.

Full disclosure, I do have mortgage and 850 credit score. I hope to he successful enough that it goes to zero.

 

[Zerk]

Ignore lists are for chicks.

 

[lennyzx11]

I am assuming your being funny......

In any case the barn is for my wife to have her own space, take care of her horses and any other projects she does. Like what my shop is for me. The porch is more for me because in the early morning and in the evening I like to sit outside as opposed to watching TV.

I spoke to the lender today and his suggestion is a Homepath Reno mortgage as it takes into account the after completion value of the projects. After completion refinancing out and into a conventional to get rid of the PMI. The big kick in the N*ts with this is the combined $12,000 in costs and fees with the two mortgages.

He also said that the barn would probably yield me more in value as the appraiser would have to assign value to that based on structure type and quality. Further that the porch would be assigned based on square footage no matter if it was made out of Italian marble or old pallets. But that neither would yield me any great amount of equity in the short term. I am going to see him at the end of the week to look at the options a little harder and see what we have. thanks for the input thus far.

Addressing this ONLY from a value of life standpoint.
Build the barn first. Then she gets to do her thing. You say you have your shop and sitting outside can be done anywhere on your property.
My personal idea would be to get loan for barn, and contract it to be built. Meanwhile a couple hundred bucks as you go start building a deck/porch yourself. You can be working on it or sitting "outside" staring and brainstorming on it enjoyably for quite some time. Ledger board or pier block foundation one weekend, then frame, joists, flooring etc. just a little at a time cash and sweat equity. A piece of plywood or OSB makes a walkway over the joists to the front door temporarily just fine for a while till decking money comes in.
This way you get both. Probably completed within 3 months easily I would think.
Raising a barn is intimidating but building a porch can be handled by someone that makes rustic furniture like your profile says easily I believe.
Don't screw with "old man money" now (or any foreseeable time). There's a chance of upcoming issues regarding these in our lifetimes I believe.
Lenny

 

[TheMan419]

There is good debt and bad debt...taking a loan on a home that should appreciate over time and where you can write off the interest while you make a nice return in your CD makes sense to me.

Depends on cash flow, the rate on the CD and the rate on the home loan. If you are making 1% on the CD and the home equity loan is going to charge you 12%, then no... crack the CD. Of course if the CD is all the liquidity you have then cracking that might not make sense. Lots of moving parts there to make the decision.

 

[BigCountry1689]

I already used a CD to build my shop so I don't want to use another one, though the thought had crossed my mind previous to my in-laws suggesting their bank. I keep those as a "What if" so in the event that I have a catastrophic incident I have back up money. The Refi that I got pre-approved for from Trustco has an interest rate of 3.75%, and with pulling the money out ($55,000) I am only increasing my mortgage by $65 because I will be dropping the PMI of $160 a month and reducing my interest rate from 4.25% to 3.75%, for me $65 is well worth the reward. My long term plan is to make double mortgage payments but that is not possible until my 2 kids start grade school. Currently they both go to private Montessori to the tune of $2100 a month, I do not like having to pay that but I lost that battle to my wife. my oldest starts at a charter school in 1 year so I will divert that money towards the mortgage at that time. So in conclusion I get my porch and she gets her barn and my little world keeps spinning. Thanks to all for their insight and suggestions.

 

[Richard]

Some interesting financial advice being strewn about.

I could probably cite examples where said advice is spot on....and other examples where said advice is dead wrong.

 

[Zerk]

No ****

 

[MossRoad]

If you're going to borrow money, many times a home equity loan is much cheaper than a regular loan or a credit card. That's true. And of course, any time you can refinance a mortgage to a much lower rate, you'll probably save money in the long run if the closing costs are not too steep. By refinancing your mortgage to a lower rate, it'll put more cash available to you each month to spend on other things (like your savings, good schools, etc...). I understand that. And pulling equity from your house to spend on improvements to your house I understand as well.

However, being from a background of my wife and I not ever, not once, despite itemizing for 30 years, having ever beat the standard deduction, even when we had a mortgage, its hard for me to see how its a tax advantage to have a mortgage. You're paying someone taxes or you're paying someone mortgage interest. Either way, you're paying someone else and not yourself. We've been debt free since about age 40. We make average wages. I just don't get it.