twinmama85
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Post by twinmama85 on Jan 15, 2012 18:54:57 GMT -5
I don't believe in ARMs because there is no guarantee...think about it, if your rate goes up (I don't think rates are going to drop more than they have) and you can't afford the new payment, you are SOL if you can't refinance. AND if you have to refinance, you are looking at possible closing costs again. Don't shoot yourself in the foot to save 1% for 5 years.
In all honesty, given your budget you gave us and your financial situation, you should hang tight on buying a house because again, you have no guarantee that your income is going to go up. but good luck with whatever you choose.
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constanz22
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Post by constanz22 on Jan 15, 2012 19:06:53 GMT -5
I would write a check today for the 4k you owe the IRS. What good is 25k in a "house fund" when you have this hanging over your head. If I understand right, that it was due for your 2010 taxes, you are accruing interest and penalties. Just pay it and be done. Then, if you are owed a refund this year, put it back into the house fund. You'll have your refund before you need the money for the house.
What is your time frame for this house purchase? It sounds like you are buying new construction. A 2 year old mortgage approval is not going to be valid. I still don't think you can afford this house, but that's JMHO...
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Deleted
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Post by Deleted on Jan 15, 2012 21:24:09 GMT -5
I didnt change my withdrawals for my taxes. I am hoping to get a refund so they can take it. I won't pay it off until after I file my taxes so I will know exactly how much more I need to take care of my stuff. The interest rate right now is 3.75%. The realtor talked to me about a 5 - 1 ARM not sure exactly how it works but I am researching it and aske a question on our board. s Dont do an ARM...the rates will balloon after the 5 years and if you cant refinance, you can end up with a ungodly interest rate. I HIGHLY recommend you pay off the taxes immediately, because every month you let it sit, its compounding interest and penalties. We have an ARM and have had it for over 5 years and it has never ballooned. The way ours is set up is that the rate can never go over 7.25% It is currently at 3.25%. Would I recommend one? No because you never know if it is going to go up or down. We have been very lucky that it was fixed for the first 3 years and has gone down for the past 2 years. We are also lucky that ours has a ceiling. Not all of them have a ceiling. I don't think you are in a good position to buy a house. I don't think you are in a good position to be buying a $3500 sculpture either.
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Deleted
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Post by Deleted on Jan 16, 2012 8:03:57 GMT -5
Dont do an ARM...the rates will balloon after the 5 years and if you cant refinance, you can end up with a ungodly interest rate. I HIGHLY recommend you pay off the taxes immediately, because every month you let it sit, its compounding interest and penalties. We have an ARM and have had it for over 5 years and it has never ballooned. The way ours is set up is that the rate can never go over 7.25% It is currently at 3.25%. Would I recommend one? No because you never know if it is going to go up or down. We have been very lucky that it was fixed for the first 3 years and has gone down for the past 2 years. We are also lucky that ours has a ceiling. Not all of them have a ceiling. I don't think you are in a good position to buy a house. I don't think you are in a good position to be buying a $3500 sculpture either. what kind of ARM did you have? Obviously not a 5/1 if it has adjusted every year you've had it. Mine is fixed for the first 60 payments, after that it can adjust. Also, I've been looking at 30 year rates and for 0 points, I'm seeing rates closer to 4% than 3%.
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Deleted
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Post by Deleted on Jan 16, 2012 10:10:23 GMT -5
Ours was fixed for the first 3 years. It hasn't adujsted every year, just the last 2 years. Thankfully it has adjusted down. I don't know what the exact name of it is because it is all in my husband's name. I understood how it worked, but just not what they called it other than an ARM. The bank wouldn't put me on the loan because I was a SAHM. I am listed on the deed of the house, just not the loan.
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Deleted
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Post by Deleted on Jan 16, 2012 10:27:38 GMT -5
Ours was fixed for the first 3 years. It hasn't adujsted every year, just the last 2 years. Thankfully it has adjusted down. I don't know what the exact name of it is because it is all in my husband's name. I understood how it worked, but just not what they called it other than an ARM. The bank wouldn't put me on the loan because I was a SAHM. I am listed on the deed of the house, just not the loan. sounds like a 3/1 ARM. fixed for the first 3 year and then can adjust every year after that.
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jdnstl
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Post by jdnstl on Jan 17, 2012 13:36:59 GMT -5
wow - after reading all of Patstab's posts i don't think i ever will be able to buy a house. it'll cost way too much.
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twinmama85
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Post by twinmama85 on Jan 17, 2012 13:54:43 GMT -5
wow - after reading all of Patstab's posts i don't think i ever will be able to buy a house. it'll cost way too much. Thats why I am going to buy one with as much cash as possible lol
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sealy
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Post by sealy on Jan 19, 2012 9:09:07 GMT -5
pat I don't give my tithe to my church. I give my tithe to my local cancer hospital and they use it for people who are not fortunate to afford insurance and have too much money to get government assistance but not enough money to take care of their medical bills.
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Peace77
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Post by Peace77 on Jan 19, 2012 12:12:39 GMT -5
Sealy wrote:
Sealy that sounds like a wonderful cause but the case is still the same. You can't afford to give away that much if you have to juggle your bills each month.
I still suggest that you give less until your debts are paid off. In the meantime, I'll bet that the cancer hospital would love a new volunteer.
When I was in the hospital, a volunteer came by with magazines and a lap blanket in my favorite color that someone had made. Both the magazines and lap blanket were donated. There were a wonderful respite from the long hours of illness. *******************************************************
PLEASE, pay off the IRS before they take your funds right out of your checking account. This could easily cause your checks to bounce.
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Clever Username
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Post by Clever Username on Jan 20, 2012 12:47:20 GMT -5
Pat, I think you're onto something. But I'm not sure you're exactly on target. Methinks, she's got a combination of: - No debt aversion - kept her lifestyle even when income dropped, even though it put her budget in the red. - Lifestyle set at her "high water mark" - May or may not have yet realistically captured if her income drop was a normal cyclical trend or an unlikely to return abnormality.
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twinmama85
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Have a blessed New Year!
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Post by twinmama85 on Jan 20, 2012 12:57:56 GMT -5
Pat, I think you're onto something. But I'm not sure you're exactly on target. Methinks, she's got a combination of: - No debt aversion - kept her lifestyle even when income dropped, even though it put her budget in the red. - Lifestyle set at her "high water mark" - May or may not have yet realistically captured if her income drop was a normal cyclical trend or an unlikely to return abnormality. Agreed, she needs to realize her income now, not if it goes back up, there is no guaruntee, especially this day in age... Sealy, we aren't trying to judge you or put you down, we just don't want you to get a house you can't afford and lose it a few years later.
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sealy
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Post by sealy on Jan 22, 2012 2:48:43 GMT -5
thanks twin I asked for it you all are just being honest and trying to help me. I will be paying the beautiful state on of Cali on tuesday or wednesday. Next payment will be the wonderful IRS. My house will start to get built in Feb. It will be finished by June. No payment due till August. s
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twinmama85
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Have a blessed New Year!
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Favorite Drink: Wine
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Post by twinmama85 on Jan 22, 2012 14:58:16 GMT -5
patstab-- people have to make their own choices and/or mistakes. You cannot force your advice no matter how good and true it is (believe, I have tried). I hope and pray that everything works out but there is a lot of risk and said person is walking a very thin line. All we can do now is offer support when asked.
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twinmama85
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Have a blessed New Year!
Joined: Dec 28, 2010 9:48:38 GMT -5
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Favorite Drink: Wine
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Post by twinmama85 on Jan 22, 2012 15:27:13 GMT -5
Yeah, I am in the military but we currently have $49k in debt (mostly student loans from when we were stupid) and so the thought of buying ANYTHING is laughable right now. On top of that, I plan to make a career out the military so I see no reason for my to buy a house when I move every 3-4 years. So, my plan instead is to invest as much money [once I am debt free and established EF, retirement, & ESAs] as I can so that way when I separate in about 18 years, I will hopefully have enough cash to buy a house outright. My plan right now is to invest $5,000 a year in mutual funds and see if I can get it to grow (I am assuming when I start this, I will have at least 16 years to invest)
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Rocky Mtn Saver
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Post by Rocky Mtn Saver on Jan 22, 2012 17:17:50 GMT -5
thanks twin I asked for it you all are just being honest and trying to help me. I will be paying the beautiful state on of Cali on tuesday or wednesday. Next payment will be the wonderful IRS. s Congrats on getting rid of your state tax debt! Looking forward to hearing that you got the federal boys off your list too! Karma!
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sealy
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Post by sealy on Jan 24, 2012 22:06:47 GMT -5
done with state taxes next stop IRS
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sealy
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Post by sealy on Jan 24, 2012 22:07:44 GMT -5
I am not taking my house fund below $20,000.
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Peace77
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Post by Peace77 on Jan 26, 2012 0:01:31 GMT -5
Why pay the outrageous interest and fees that the IRS charges?
Best to just pay them off.
You can add the money back to your house fund later.
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Rocky Mtn Saver
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Post by Rocky Mtn Saver on Jan 26, 2012 12:55:16 GMT -5
If she paid off the IRS at this point in the filing season, might she run the risk of having them still take her refund because her payoff hadn't made it through the red tape by the time she files in the next month or so? I've never owed back taxes, but that's what I'd personally be leary of at this point. If she pays them off and they still end up keeping her refund in error, who knows how long it'd take to get her $ back?
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Peace77
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Post by Peace77 on Jan 26, 2012 18:34:52 GMT -5
If that (post #89) is a concern, then there are 2 options:
1. Pay off the entire amount now. File in March or April and collect any refund. Put the refund into the house fund if there are no other immediate needs.
2. Figure the taxes now. If there is a refund coming, pay the difference now. For example if $4k is owed, a $2k refund is expected. Pay the remaining $2k now.
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sealy
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Post by sealy on Jan 28, 2012 22:41:46 GMT -5
I paid off CA taxes already. I paid $ on the IRS. They will post quickly because I already had an account set up.
I won't file my taxes until perhaps March.
I know it makes more sense to pay off the IRS and put the $ back into my house fund but if it goes below 20K then I may start to pinch at it for other things. I'm going to wait till the other $ posts then I will know exactly how much more I have to pay.
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Plain Old Petunia
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bloom where you are planted
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Post by Plain Old Petunia on Feb 7, 2012 14:32:43 GMT -5
In my opinion, Sealy, you are biting off WAY more than you can possibly chew. I think you are running full speed towards financial disaster. I wish you would pause for a moment and consider whether what you want and what you can afford are necessarily the same.
I wish you the best of luck with whatever you decide.
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Plain Old Petunia
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bloom where you are planted
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Post by Plain Old Petunia on Feb 7, 2012 14:50:25 GMT -5
I also wonder what became of the money you withdrew prematurely from your 403b? Is this the source of your downpayment? Did it go to pay off debts? Was it spent?
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mizbear
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Stand back. I have a budget, and I know how to use it.
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Post by mizbear on Feb 9, 2012 21:42:11 GMT -5
sealy- Please be extremely cautious. This is really making me suspicious of the financing agent.
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