mortgage Questions - Basically Money

Home office write off on a line of credit mortgage

2010-07-23T21:45:03Z

I've been looking at mortgage products such as Manulife One - which work like a line of credit based on the equity in your home. The monthly payment is the interest on the amount left owing every month. The more you pay down, the smaller your monthly payments become. The bonus is you can take money out of the account for personal use.

I am self employed and going to buy a condo that will have a home office that constitutes 10% of the total square footage. I understand I should be able to deduct 10% of my mortgage payment as a business expense.

Question part 1. Does this 10% write off still apply to this type of loan? I would be writing off 10% of the monthly interest payment.

Question part 2. I can take money out of the line of credit for personal stuff, like buying furniture etc. How would this affect the write off, because I'm adding personal items into the mix of the loan?

I'm a teenager - Why do people use mortgages, when they could just pay for the house in full (cash)?

2009-12-30T22:19:15Z

I would like your recommendation on whether you should buy a house with a mortgage, which you would pay as you go, or should you buy it in full. Thank you for your time.

What are your thoughts (pros & cons) on all-in-one accounts, like Manulife One?

2010-04-14T23:21:01Z

I think it looks very interesting, and certainly promises to deliver. My main concern is, as a single person, is it wise to put all of my eggs into one basket?

What impact does the new mortgage rules have on CMHC policies? [Canada]

2010-04-19T15:30:15Z

With reference to this question, how does this affect the Canadian Home and Mortgage Corporation (CMHC)? This organization made it possible to get a new home with as little as 5% downpayment, essentially insuring the borrower in case of default. Will this change with the new rules?

Mortgage interest rates

2010-05-12T16:00:11Z

Are the mortgage interest rates expected to rise over thenext few months or remain stable or increase. I ask this because financial institutions are lobbying to sign with them withthe current rate. Based on the answers from my previous queries I take the "sleep test" seriously, an so inclined to do so. But I do want to poll the learned community here and see if there is any consesnsus of the rates are going to dip or rise over the course of next few months?

Foreclosure process: What happens when a bank forecloses on a home?

2010-04-14T05:20:15Z

I know it is a long complicated process, but what is the high level overview of what a bank does when it forecloses on a house? Beyond credit getting hurt, what else?

Where does the bank get it's money? How does PMI play into it? How do the homeowner's taxes change for that year? For the upcoming years? Please let me know from a bank's point of view as well.

With interest rates beginning to ascend, is it better to lock in a mortgage at fixed rate or opt for variable rate?

2010-04-29T01:41:04Z

With the interest rates beginning to ascend, is it better to lock the house mortgage at a fixed rate or to opt for a variable rate mortgage? Thanks in advance for the sage advice that is shared here.

What is the difference between Freddie Mac, Fannie Mae and Ginnie Mae? [US]

2010-04-26T01:15:34Z

What is the difference between the various US housing agencies nick-named "Freddie Mac", "Fannie Mae" and "Ginnie Mac"? How have they been affected by the sub-prime mortgage crisis?

Should I pay more than 20% down on a home?

2010-04-16T17:48:31Z

I'm starting to consider buying a home in a year or three. I'll have a lot of money available at that time -- perhaps enough to do more than the standard 20% down payment. I might be able to manage something more like 30-50% (depending on exactly how well things play out and how long I wait).

Should I pay more than 20% for a down payment? What are the advantages and disadvantages? What sort of factors (tax brackets, risk tolerance, state of local real estate market, etc) should influence my decision one way or another?

Which type of mortgage is better? Fixed-rate, or Variable?

2010-04-13T13:54:14Z

We just bought our first house and are contemplating fixed vs. variable. Our broker is really pushing for variable but we're just not sure. I know interest rates will probably be creeping up soon, but will they creep up so fast that we'll be in trouble with our monthly payments? Our situation is that we are earning a fixed income right now that will likely double or triple in two years time, so we know we could afford higher payments in 2 years, but the question is how much are things likely to change before that?

What percentage of my budget should the mortgage be?

2010-04-09T22:36:09Z

What percentage of my budget should the mortgage be?

How to determine new, lower interest payments after a lump sum mortgage payment, i.e. new amortization schedule?

2010-04-08T13:34:56Z

Here's a financial math problem:

I have a mortgage at about $78,0000 with 5.5% interest and 56 of 360 monthly payments were made. I'm currently paying about $360/month in interest charges. If I pay it down by $50,000 what would the monthly interest payments be?

I've trying to build a amortization schedule, but the lump sum is difficult to represent. Do I just start over with 360-56=304 payments? It sounds like the bank will actually decrease the term of the mortgage. How is that calculation done? My main goal is to reduce interest charges. My second goal is to have a lower monthly payment.

What value does a mortgage broker bring? Can they get you a better deal than your bank can?

2010-03-23T03:07:56Z

Many I meet are very salesy. Makes me wonder if they are truly after my best interests? Banks seem so aloof and laissez-faire. The kind of attitude that sends the message that they don't care if I take my business elsewhere (which leaves me with the impression that they are the best deal around).

Mortgage: Difference between joint tenancy / tenants vs. tenancy in common?

2010-02-21T19:39:39Z

When taking a mortgage, what is the difference between joint tenancy and tenancy in common? Under what circumstances is it preferable to choose one over the other? If your circumstances change how easy is it to switch?

Canada: New mortgage qualification rules, 2010: Why, what, & when in effect?

2010-02-16T23:08:03Z

Earlier today, the Canadian federal Finance Minister Jim Flaherty announced new mortgage qualification rules for Canada.

Why were new rules introduced?
What are the new rules being introduced, vs. what they were before?
When will the new rules take effect?
Where is definitive information about the new rules available?

Will our hefty student loans affect our chances of getting a mortgage?

2009-11-05T16:42:26Z

My husband and I live simply but we're content. I'm an avid budgeter and love finding ways to be frugal. My dilemma right now is that we've been able to keep our living expenses below what we make, but I don't know what our focus should be for using the extra.

We've got $100K in student loans (ug), with rates ranging from 3.3% to 9.1%. We're just making minimum payments right now. We'd like to buy a house in the next 5 years or so. We've been saving in a money market account and have $10K there now.

Our credit scores are excellent, but we're afraid that our hefty student loans could hurt us when it comes time to apply for a mortgage. Does anyone know how our loans will affect a mortgage rate? And if it does hurt us, how much should we try to pay off before we're safe?

Basically, should we put our focus on paying off our student loans, or saving for a house?

When applying for a mortgage, can it also cover outstanding debts?

2010-01-15T19:23:27Z

Hi,

When applying for a mortgage, can you also add some extra on (£10k) to cover car finance? Or is there any benefit of keeping them separate?

Homeowners: How did YOU get a deposit for your home?

2010-01-10T18:55:22Z

How did you get a deposit for your first home?

Inheritance?
Separate Loan?
Hard savings?
Some other way?

Can you share any experiences? Is it a good idea to open up an ISA specifically for this purpose?

What does the term "second mortgage" mean? Can I easily get one?

2010-01-21T02:47:41Z

Are these loans easy to get if you have enough equity in your current home? Is there any negative connotation associated with getting a second mortgage

For a major expensive home renovation (e.g. addition, finished basement, or new kitchen) should one pay cash or finance with a loan? Would such a loan be "good" debt?

2010-01-16T14:12:55Z

This other question is similar, but was referring to a specific renovation/repair (new flooring) that, while expensive ($1500), isn't very expensive – it's feasible to consider saving up for over a short period of time.

So, I'm curious: Imagine one wanted to do a major home renovation such as: building an addition to the home, finishing the entire basement (assume with bathroom), or redoing the entire kitchen.

In those cases, would it still make sense to save up the cash, or else take out a specific loan, additional mortgage, or borrow from a line of credit? Actually saving up the cash for a major renovation like that – easily exceeding five figures, perhaps approaching six! – could take many years, decades!, for some families.

So, if one could really use the additional space and didn't have cash on hand, would borrowing for such a renovation be considered "good" debt similar to a mortgage? Or are there still reasons to save up the cash?

What is mortgage insurance? Do you have to have it, in order to be approved by a bank?

2010-01-13T19:48:38Z

What does mortgage insurance do? Whom does it protect? Do I need it? MUST I have it, in order to be approved by a bank for a mortgage with them?

Homeowners: How can you protect yourself from a financial worst-case scenario?

2010-01-10T18:40:50Z

Say your a home-owner, a first time buyer. You've just got your first flat and your about 1 year into your 25 year mortgage.

Suddenly, something goes wrong with your job, and your made redundant (credit crisis and all)

You look for other jobs, but struggle, your forced at worse case scenario to take a job stacking shelves at a supermarket, but that merely pays your food+electric let alone anything else

What happens in this case? Do you get evicted because you just can't make up the money for mortgage? Can you "freeze" your payments? Or get insurance to cover you?

NB: For the record, this isnt my case, I would like to become a first time buyer in the next year or so but with an unstable market in the IT sector I'm concerned this may be true to many people, and wondering how this can best be tackled

Getting on the property ladder: mortage, downpayment, fees? [UK]

2009-11-15T23:42:28Z

Once I've got my finances straight I'd like to think about getting my own place, but what sort of money am I looking at to have under my belt before I can begin thinking?

Is it right that the UK mortgage market still requires a 20% deposit? Most places round here are round the 100k mark so getting 20k might be a little challenging (I've been advised to take a separate loan for the deposit, but that sounds messy)

What about fees etc? Stamp duty? I've done some of the online calculators, putting in 21k as my annual salary before tax, estimates to give me a mortgage of 50k, whats that gonna get...a caravan?

Can anyone give me some good advice? There must be hundreds of people in my situation...

How can I minimize losses on an upside down mortgage for a condo I no longer live in?

2009-12-21T17:07:12Z

I have made a good faith effort to keep up my mortgage payments on a condo that I no longer live in since Oct 2005. In 2005 I had to move out of state for my job and I listed the property for about 60 days before realizing that there was not enough interest in the market to sell it at a reasonable price. The property is now appraised on the market at just under $300,000 while I am paying on a $330,000 interest-only 7/1 ARM loan. It is supposed to reset in April 2011.

Fortunately, I have a good property management company that has been able to keep the condo occupied by a tenant under lease for almost every month since moving in 2005. On the other hand, I have been losing anywhere between $700 - $1000 out of pocket each month because the rent doesn't cover my cash flow. This is really starting to add up and I am building a fear that I will not be able to hold onto the property long enough for the market value to recover.

It's one thing to keep paying the mortgage, knowing that one day, it will be worth more than I paid for it. It's another thing to keep paying my mortgage, with the chance that my condo might not reach the price I paid for it before the ARM resets. I have lost approximately $42,000 due to this negative cash flow over 50 months.

So, here is my question: Is there anything else I can do in this situation to minimize my out-of-pocket losses going forward?

What is a good place to park a Christmas bonus? Pay down the mortgage, TFSA or RRSP?

2009-12-22T21:16:49Z

Many companies in Canada tend to pay out bonuses around Christmas time. If one is fortunate enough to get one this year what is the best strategy for the bonus? TFSA's have a limit of $5000 yearly. An RRSP will defer taxes and sometimes result in a tax refund.

Should I put more money down on one property and pay it off sooner or hold on to the cash?

2009-10-21T05:55:13Z

I've a huge chunk of money saved up for a down payment on a property that I'd eventually like to pay off and use as a rental. The assumption is that the property value will go up substantially over time because I intend to buy in a great location.

I'm wondering if I should

Put as much down on the property as possible and try to pay it off sooner - or
Put as little as possible down, and try to use the remaining cash somewhere else (e.g. a second property in a few years).

Mortgage rates are quite low - so I'm debating which way to go. Property values are still going up fast in my city (Toronto, Canada), so its almost like waiting 10 years would make it difficult to afford that second property.

What is a reverse mortgage?

2009-10-19T00:53:39Z

What is a reverse mortgage? I hear these advertise often but don't understand how they are different from a regular mortgage! Can somebody explain please what they are and when they would be useful? Thank you!