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  #21  
January 12th, 2007, 07:16 AM
~Jess~'s Avatar Platinum Supermommy
Join Date: Oct 2005
Location: Central California
Posts: 16,959
A raise will def help! Let's see:
Starting in June with Budget #1 (you continuing to work), you will have $1766 for housing and car payments. Your new house payment will be around $2000 (with your sis paying you $500) and your car payments are $1025 for a total of $3025.

$3025-$1766=$1259

Looks like he'll need a raise of approx $1259 a month (bring home) in order to buy the house and keep your cars, assuming that I got the payment correct.

Also, keep in mind that your sister will not be living with you forever. She may not even be living with you until your cars are paid off. Heck, I don't think I could live with my sister for more than a few months without killing her, lol. You won't know until you're actually in the situation. Keep that in mind, because if she moves out, by that time you've already bought the house, and you'll need to come up with an extra $500 a month, (for a total of $1759 extra) which may mean getting a 2nd job, or selling the car at that point.

Also, keep in mind the 2nd scenario looks much better with your dh making more money too! You CAN be a SAHM, it just depends on whether it's worth it to make the sacrifice. Totally up to you.

I just ran some #s for you and it looks like $400,000 at 6% gives you a payment of right around $2400, not including taxes, insurance, or mortgage insurance. I'm assuming you don't have $80000 to put down, so that means mortgage insurance will run you around $200 a month. Insurance should be at least $75 a month and I'm totally clueless on property taxes in Florida.

Sooooo...

Principal & interest: $2400
Mortgage insurance: $200 (required if you don't put 20% down)
Property insurance: $75
Taxes: ???

Total payment: $2675 + property taxes.
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  #22  
January 12th, 2007, 07:37 AM
~Jess~'s Avatar Platinum Supermommy
Join Date: Oct 2005
Location: Central California
Posts: 16,959
What county are you in? If you want, I can look up your property tax rate to give you an estimate of how much your property taxes are.

I looked up Miami (since you had mentioned that your dh has co-workers that live there, I thought you might be in the same county) just to get an idea of what they would be. Looks like in Miami they are around 2%, so I'll do a tentative figure based off of that.

$400,000 (value)
-$25000 (exemption)

Total assessed value: $375,000
2% of $375,000= $7500/year in property taxes

$7500/12 mos=$625 a month in taxes.

So if your property taxes are around 2% like Miami (and for all I know, Miami has much higher taxes than the rest of the state), then your payment would be approx. $3300 a month on a $400,000 house.

Bottom line: Your dh will need to make $2059 more each month to buy the house you want and keep the cars too. That is assuming that your sister lives with you long enough to pay off both cars. You will probably never get to be a sahm either unless he gets another substantial raise.

Since he went from temp to perm employee, he may very well make that much more. In that case, go for it and enjoy!!!!!

GL in whatever you decide!

If you have any questions, comments, or concerns, let us know!
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  #23  
January 12th, 2007, 08:06 PM
BensMom's Avatar Ephesians 4:29
Join Date: Apr 2005
Location: The Lonestar State
Posts: 50,214
You know what... I really don't have anything to add. I think Jess did a great job. Until you know for sure how much he'll be making, whether or not you want to keep the cars, etc., there's really no point in coming up with a debt payoff plan. If you get rid of even one of the cars right now, you could keep making that monthly "payment" to yourself to be used as a down payment on a house. Money's tight, but you're still in good shape. There are SOOOOOOOOOOOOOOOOOOO many people in America who are so far in debt by the time they're 25 that they'll never be able to make things work. You really don't have that much debt. Like Jess said, if you have any questions, let us know. We'll be glad to work through some other scenarios with you if things change. Hey, life happens! Things WILL change...let's just hope it's for the better, right?
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  #24  
January 14th, 2007, 01:23 PM
Mega Super Mommy
Join Date: Dec 2006
Posts: 1,296
Quote:
What county are you in? If you want, I can look up your property tax rate to give you an estimate of how much your property taxes are.

I looked up Miami (since you had mentioned that your dh has co-workers that live there, I thought you might be in the same county) just to get an idea of what they would be. Looks like in Miami they are around 2%, so I'll do a tentative figure based off of that.

$400,000 (value)
-$25000 (exemption)

Total assessed value: $375,000
2% of $375,000= $7500/year in property taxes

$7500/12 mos=$625 a month in taxes.

So if your property taxes are around 2% like Miami (and for all I know, Miami has much higher taxes than the rest of the state), then your payment would be approx. $3300 a month on a $400,000 house.

Bottom line: Your dh will need to make $2059 more each month to buy the house you want and keep the cars too. That is assuming that your sister lives with you long enough to pay off both cars. You will probably never get to be a sahm either unless he gets another substantial raise.

Since he went from temp to perm employee, he may very well make that much more. In that case, go for it and enjoy!!!!!

GL in whatever you decide!

If you have any questions, comments, or concerns, let us know![/b]



We live in collier county
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  #25  
January 14th, 2007, 01:46 PM
~Jess~'s Avatar Platinum Supermommy
Join Date: Oct 2005
Location: Central California
Posts: 16,959
Collier county is better than Miami. It looks like the tax rate is closer to 1.6% there.

Soooo...

$400,000
-$25,000 (exemption)
$375,000 assessed value
x 1.6%

= $6000 annual property taxes
----or----
$500/mo.

You're probably looking at a total payment of around $3175 on a $400,000 house.

This assumes 0 down (except closing costs), 6% interest rate, and 30-year term.
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  #26  
January 14th, 2007, 01:53 PM
nmiracles's Avatar Mega Super Mommy
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Wow Jess. That is pretty amazing that you found and figured all that out. I wouldn't have a clue.
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  #27  
January 14th, 2007, 02:11 PM
~Jess~'s Avatar Platinum Supermommy
Join Date: Oct 2005
Location: Central California
Posts: 16,959
Quote:
Wow Jess. That is pretty amazing that you found and figured all that out. I wouldn't have a clue.[/b]
I used to work in Finance, including mortgage loans, so it's second nature for me
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  #28  
January 14th, 2007, 08:12 PM
BensMom's Avatar Ephesians 4:29
Join Date: Apr 2005
Location: The Lonestar State
Posts: 50,214
Quote:
I used to work in Finance, including mortgage loans, so it's second nature for me [/b]
I was wondering how you threw that together so quickly! Impressive!
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  #29  
January 14th, 2007, 08:41 PM
~Jess~'s Avatar Platinum Supermommy
Join Date: Oct 2005
Location: Central California
Posts: 16,959
Quote:
Quote:
I used to work in Finance, including mortgage loans, so it's second nature for me [/b]
I was wondering how you threw that together so quickly! Impressive!
[/b]
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  #30  
January 15th, 2007, 05:37 AM
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ok Well that is a little better then the miami rates...what does the $25,000 exeption mean (I am totally cluless) and the house we are buying is mt DH mothes that she rents out right now so will there be closing costs? and also Dh's uncle is a realtor so we won't need to pay a realtor fee.


Also If she sold us the house for 350000 but we took out 400000 and put that extra 50,000 into the bank to pay the motgage for a year or two would that be smart b/c by then we will def make more money by then and be able to afford that house better? Would this be a smart move to make I mean if for some reason we didn't make more we could always put it on the market and sell it before it came time to pay the mortgage on our own. Let me know what you think.
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  #31  
January 15th, 2007, 09:04 AM
~Jess~'s Avatar Platinum Supermommy
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For the first half of your question:

1. The exemption is a part of the value of your home that you are not responsible for paying property taxes on. There is a form that you have to file, but usually you only have to file it 1 time, not annually. Here's the info for Florida:
Quote:
$25,000 Homestead Exemption


Every person who has legal or equitable title to real property in the State of Florida and who resides on the property on January 1 and in good faith makes it his or her permanent home is eligible for a homestead exemption. If title is held by the husband alone, a wife may file for him, with his consent, and vice-versa. If property is held by the entireties, one spouse may file as agent for the other.

If filing for the first time, be prepared to answer these questions:

1. In whose name or names was the title to the dwelling recorded as of January 1?
2. What is the street address of the property?
3. How long have you been a legal resident of the State of Florida? (A Declaration of Domicile or Voter's Registration will be proof of date before January 1.)
4. Do you have a Florida license plate on your car and a Florida driver's license?
5. Were you living in the dwelling on January 1?[/b]
source: http://dor.myflorida.com/dor/property/exemptions.html

Here our exemption is only $7000, so you get much more than us!

2. Closing costs are not something that the seller charges. Closing costs are bank fees and state/county fees for transferring title. You will have closing costs regardless who you buy from. If you paid cash, rather than taking out a mortgage, your closing costs would be considerably less, but most ppl can't do that. They usually range from $5000-$15000. Keep in mind that is just FEES, that does not include money down towards the purchase price.

3. Buyers are not responsible for realtor fees, so you wouldn't have to pay a realtor fee no matter who you used as a realtor or who you bought your home from. The bonus of not having realtor fees is that the seller may lower the purchase price in order to sell faster. Then again, some sellers will keep the purchase price the same so they can pocket more money from the sale. The benefit of lowered realtor fees normally benefits the seller more than the buyer.
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  #32  
January 15th, 2007, 09:40 AM
~Jess~'s Avatar Platinum Supermommy
Join Date: Oct 2005
Location: Central California
Posts: 16,959
To help you make a decision about the 2nd part of your question, regarding the $50,000, I need to analyze the cost of that extra money. The ultimate decision will be up to you.

The first issue that springs to mind:
~You will have to lie to the mortgage company and put down that the sale price is $400,000.

What this means for you:

~The property will need to appraise for $400,000. I assume that it is worth that amount, and mil is selling to you for less than that to help you out, so that shouldn't be a problem.

~Your property will be taxed at $375,000 rather than $325,000.

=Total increase in property taxes over 30 years: $24,000 more.

~Since the bill of sale has the sales price at $400,000, the bank will give your mil $400,000 (minus any realtor fees) and SHE will have to give the $50,000 back to you. However, this means that she will have to pay capital gains tax on $400,000 rather than $350,000. (Unless she has lived in the home for 2 out of the last 5 years, but since it's a rental, I'm guessing that's not the case)

=mil will have to pay an extra $7500 in taxes. She may want you to pay that for her since she is doing this as a favor to you. Now that $50,000 has decreased to $42,500.

So far, your cost of that extra $50,000 is:

$50,000
-$7500 (to pay extra tax for mil)
-$24,000 (increased property taxes over the course of 30 years-keep in mind, if you live there longer, this amount will be greater)
$18,500 left

Now, I'll need to run some numbers to see how much interest you'll pay on that $50k.

Be back in a jiffy...
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  #33  
January 15th, 2007, 10:02 AM
~Jess~'s Avatar Platinum Supermommy
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Location: Central California
Posts: 16,959
Okay, if you finance an extra $50,000 at 6% over 30 years:

~You will pay $57,920 JUST in interest.
~You will spend an estimate of an extra $500 in fees to borrow the extra $50k.
~Your monthly payment will be $300 higher for 30 years.

Interest on $400,000 for 2 years: $47,427
Interest on $350,000 for 2 years: $41,501

Rent at $1700/mo for 2 years: $40,800


TOTAL cost of extra $50,000:
~$500+ (additional fees in order to borrow)
~$57,920 (interest)
~$24,000 (increased property taxes)
~$7,500 (increased taxes for mil)
$89,420
+$50,000
$139,420 Total cost to buy the home 2 years sooner.
Total cost to rent for 2 years: $40,800

Since your mil is the one who owns the home, can you rent from her until you have more monthly income/less debt and can afford the mortgage? That would be the best option if it is available.

Chrystal, do you have any other suggestions, or anything to add?
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  #34  
January 15th, 2007, 10:16 AM
BensMom's Avatar Ephesians 4:29
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Location: The Lonestar State
Posts: 50,214
I didn't run the numbers myself yet, but it doesn't matter because you said exactly what I would've said. It really doesn't make sense to buy at a higher price. Most of your principle is paid at the end of a mortgage while most of the interest is paid upfront. If there's ever a time to pay as much as possible on a loan, it's at the beginning. Doing it your way would only make matters worse IMO.
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  #35  
January 15th, 2007, 10:23 AM
~Jess~'s Avatar Platinum Supermommy
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Location: Central California
Posts: 16,959
I do want to add, that if mil agrees to this plan, but in 2 years, she would want to charge you $400,000 for the house, then you may as well borrow the extra $50k now. Otherwise, you will have the same cost of funds, but will have paid $40k in rent too.

Same goes for if you're going to buy a different equivalent property at full-price for $400,000.

You WOULD be better off borrowing the extra $50k to save yourself the rent, kwim?

But, if mil would let you rent for 2 years, and then buy the property for $350k, then that would be the best option.

Then again, prices could drop dramatically over the next 2 years, and then you'd be upside-down on your house. It's been a seller's market for the last 3-4 years, and it very well could be a buyer's market for the next 3-4 with prices deflating a bit more each year In my area, the prices are anticipated to drop by approx 10% just in the next year!

Plus, if you don't have a house payment for the next 2 years (or a very small one), you may end up using that as a crutch to continue spending as you have been. You've been spending close to $6k a year just on eating out! You should have been saving that for the last year, while you didn't have a payment.

Either way you look at it, it's a gamble.
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  #36  
January 15th, 2007, 11:18 AM
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My MIL would not have to pay taxes b/c she lived in the house for 10 years and just moved out 2 years ago almost to the date. But still I see your point of view and I am really glad I asked. Me and DH were just talking today and are going to decide on all of our options tonight, I really don't want t buy a 400000 dollar house. So hopefully DH will agree to renting elsewhere.
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