Looking for Financial Help/Advice

[Barefoot]

Hello All. My wife and I are looking to buy land and build a home sometime next summer. We currently own our existing home with an outstanding Mortage balance of 103K. The house is worth 185-200K as of the current market. We are coming into some money (right around 110k) and we are looking for a little direction.

Our bills:
Credit Cards= 2300$
Vehicle Loan= 24,500$ (worth 37,000$ put a large down when we bought it)
Home Loan= 103K approximately

Assest's/Cash= about 15,000$

Thats about it as far as debt. So, should we pay off the car and house? Obviously we will be selling the current home, so I am just wondering if we should save the liquid cash as a Down for the new place, or pay off what we currently have. Or does it matter? After the dust settles, we will be selling the car as it is too big for our needs now (kids grown). So without paying anything off, and potential equity in the current home we should be around the 200k mark (relative).

Suggestions? I'm assuming pay off at least the credit cards and vehicle loan. Anyway seems a like a few choices are viable I am just wondering from an outsider perspective, which route would you take and why?

Thank you in advance

[Deleted]

I would pay off the car and unsecured debt first. Especially if your savings interest plus investments are making less than you are paying in interest on your debt. Being debt free is a great feeling.

[Blueobelisk]

I'm pro at finances. I have a mother fucking finance website. I'll give you advice. But this is not legal advice. If shit goes down I'm warning you now that I won't be held liable and don't even try suing me.

1. It'd help to know how long you have left on the car payments/mortgage payments.
2. It'd also help to know mortgage interest rate. (I'm assuming it's fixed rate.) I'd also want to know the amount you bought the house for (including or excluding downpayment).
3. It'd really help to know how long you plan to keep living at your current house.
4. I wonder how long it'd take you to pay off the credit card payments if you don't pay it off now.

If I knew those then I could help out with actual math to give a correct result. But I can't now. The general rule of thumb is that in the beginning of a mortgage you're paying almost all interest. You may want to take some money and put it into your house payment just so you start paying back the principal. But that also depends on how long you're gonna be there.

[Barefoot]

I'm pro at finances. I have a mother fucking finance website. I'll give you advice. But this is not legal advice. If shit goes down I'm warning you now that I won't be held liable and don't even try suing me.

1. It'd help to know how long you have left on the car payments/mortgage payments.
2. It'd also help to know mortgage interest rate. (I'm assuming it's fixed rate.) I'd also want to know the amount you bought the house for (including or excluding downpayment).
3. It'd really help to know how long you plan to keep living at your current house.
4. I wonder how long it'd take you to pay off the credit card payments if you don't pay it off now.

If I knew those then I could help out with actual math to give a correct result. But I can't now. The general rule of thumb is that in the beginning of a mortgage you're paying almost all interest. You may want to take some money and put it into your house payment just so you start paying back the principal. But that also depends on how long you're gonna be there.

Oh we still have 28 years left on our home mortgage (no second). We put 40% down on the Home when we Bought it. We want to sell the home next year summer time while we buy some land and build hopefully, our last home. I am not looking to invest this liquid cash long term as we want to get into our "dream" home so to speak by next year. As far as the car goes, 3 years left on it I think. But like I stated about we plan on selling that in the next 2 months at 35-37k. So about a 12kish, profit margin. We have other paid off cars.

[crazyb]

Easy.
1) Pay off the CCs first. that's a no brainer.
2) I would pay off the car loan next (interest in your savings account being significantly lower than what you are paying on the car loan).
3) Then I would save the rest. Keep paying your current mortgage as is, at least you get the tax deduction on the interest (assuming US rules, not sure if elsewhere). If you are going to still be in your current home while building the new home you will need the liquid finances to keep paying off both until everything is finalized on both ends. then once you are in the new and have sold the old you can work out the details on investing the remaining money vs. paying off the home etc. With home rates being so low, many would suggest to invest and keep the mortgage. But that would depend exactly on where you are from a retirement perspective, etc.

[Reeve]

Hello All. My wife and I are looking to buy land and build a home sometime next summer. We currently own our existing home with an outstanding Mortage balance of 103K. The house is worth 185-200K as of the current market. We are coming into some money (right around 110k) and we are looking for a little direction.

Our bills:
Credit Cards= 2300$
Vehicle Loan= 24,500$ (worth 37,000$ put a large down when we bought it)
Home Loan= 103K approximately

Assest's/Cash= about 15,000$

Thats about it as far as debt. So, should we pay off the car and house? Obviously we will be selling the current home, so I am just wondering if we should save the liquid cash as a Down for the new place, or pay off what we currently have. Or does it matter? After the dust settles, we will be selling the car as it is too big for our needs now (kids grown). So without paying anything off, and potential equity in the current home we should be around the 200k mark (relative).

Suggestions? I'm assuming pay off at least the credit cards and vehicle loan. Anyway seems a like a few choices are viable I am just wondering from an outsider perspective, which route would you take and why?

Thank you in advance

I wouldn't pay off the house. Mortgages are both tax deductible and often lower interest than the amount of money you could make by investing that same money in the stock market.

Pay off the credit card first and the car loan second. Invest the rest.

[Kujako]

Without knowing the interest rates, debt to earnings ratio, etc... we have no real information to base any suggestions on.

[Blueobelisk]

If you have a lien on the car you can't sell it until you pay it off. But I don't know the situation so I'm just gonna assume you can sell it, in which case (since its only 2 months away) don't bother paying the car off, I'd say.

Alright I used one of my programs and calculated your mortgage assuming $103,000 left at a 4.6% rate (I guessed) for 28 years and your mortgage payments are around $545. (That's fucking low. $545/month * 2 years (assuming you had a 30 year mortgage which is standard) means you paid about $13,000 so probably $116,000 or so principal. If you paid 40% then you probably bought the house for $190 or $200k. I wonder where you live.) Also means you'll be paying $80,000 interest over the course of the 28 years. That's heavily over these coming years though.

(Sorry for stalker level analysis.)

Ya uhm. I'd definitely pay the credit cards. I'm not sure about the car if you're really going to sell it. I might put like $50,000 or so to house payments to cut the interest paid over the 28 years in half, which'll save you money for this final year. I'm not sure I'd bank all my liquid cash into that, though.

[Barefoot]

Without knowing the interest rates, debt to earnings ratio, etc... we have no real information to base any suggestions on.

House 4.5% Fixed 30/yr
Vehicle 4.2% (3) years left

Debt to income about 40% atm, with 60% free


Remember we are not looking to invest long term as we want to buy the new house by next summer.

[Drobu]

Certainly pay off credit cards to begin with. After that, I would bank the rest. I know everyone is different, but here
is what I would do about the house. If it's just you and the wife, just build a nice small home and try and pay cash for it.
This will depend on location and obviously the price of land as well. I watched my cousin blow a lot of insurance money
after a tornado building a home that was, imo too much for him and his wife. Currently lives in a camper with an unfinished
home because he fucked up big time.

[Barefoot]

If you have a lien on the car you can't sell it until you pay it off. But I don't know the situation so I'm just gonna assume you can sell it, in which case (since its only 2 months away) don't bother paying the car off, I'd say.

Alright I used one of my programs and calculated your mortgage assuming $103,000 left at a 4.6% rate (I guessed) for 28 years and your mortgage payments are around $545. (That's fucking low. $545/month * 2 years (assuming you had a 30 year mortgage which is standard) means you paid about $13,000 so probably $116,000 or so principal. If you paid 40% then you probably bought the house for $190 or $200k. I wonder where you live.) Also means you'll be paying $80,000 over the course of the 28 years. That's heavily over these coming years though.

(Sorry for stalker level analysis.)

Ya uhm. I'd definitely pay the credit cards. I'm not sure about the car if you're really going to sell it. I might put like $50,000 or so to house payments to cut the interest paid over the 28 years in half, which'll save you money for this final year. I'm not sure I'd bank all my liquid cash into that, though.

Yea winces it so short term, I think the Wife and I are more worried about how we look to the Banks when we try to get a construction loan from them. DO we look better with les sin the bank but house/car/cc's paid off? or Do we look better with some paid off, i.e. car/cc's and a 100k+ in the bank?

Before anyone asks, Our credit score is somewhere in the low 700's.

[Blueobelisk]

Yea winces it so short term, I think the Wife and I are more worried about how we look to the Banks when we try to get a construction loan from them. DO we look better with les sin the bank but house/car/cc's paid off? or Do we look better with some paid off, i.e. car/cc's and a 100k+ in the bank?

Before anyone asks, Our credit score is somewhere in the low 700's.

Funny story. I'm selling my house and these potential buyers say they need 4 months to close (after legal paperwork goes through). Apparently they don't keep their money in the bank. So even though they have money they had to let it sit in the bank for 2 months so they could get approved for the loan.

I really don't think that applies to you. It's a more wise investment to pay off your debts (as long as you keep some money in the bank, like I suggested). Don't worry about needing to bank money to get loans.

[Azaril]

House 4.5% Fixed 30/yr
Vehicle 4.2% (3) years left

Debt to income about 40% atm, with 60% free


Remember we are not looking to invest long term as we want to buy the new house by next summer.

You need to get your debt to income down to ~20% or so. 40% is amazingly high, unless you're thinking of available debt as 40%

If your income is say, 2000/month and you're spending 900$ on debt payments before your mortgage payment, that's a LOT. Banks generally want 30% debt /income or less.

you should have no debt load before going with a construction loan. You actually get two loans when you do that also. You get one to buy the land and the other to build the house.

Pay the credit card and don't use them anymore except in dire emergency.

Pay the car with whatever cash assets you have left. If you had 40k in cash but 15k on your car loan, the bank will most likely require that you pay off your car loan first, and be ok with taking 25k down instead of 40. If you sell your house and you end up making money on it, any profit needs to go to paying off any current debt.

If you have to, sell your house, get an apartment and put the majority of your assets in storage. Take any profit from the house and pay everything off and live there while your new house is being built.

[Barefoot]

You need to get your debt to income down to ~20% or so. 40% is amazingly high, unless you're thinking of available debt as 40%

If your income is say, 2000/month and you're spending 900$ on debt payments before your mortgage payment, that's a LOT. Banks generally want 30% debt /income or less.

you should have no debt load before going with a construction loan. You actually get two loans when you do that also. You get one to buy the land and the other to build the house.

Pay the credit card and don't use them anymore except in dire emergency.

Pay the car with whatever cash assets you have left. If you had 40k in cash but 15k on your car loan, the bank will most likely require that you pay off your car loan first, and be ok with taking 25k down instead of 40. If you sell your house and you end up making money on it, any profit needs to go to paying off any current debt.

If you have to, sell your house, get an apartment and put the majority of your assets in storage. Take any profit from the house and pay everything off and live there while your new house is being built.

Yea i was Guessing our debt to-income. We bring in about 7k a month, and only have the debts I listed (other than regular bills) Our Mortgage payments is 720 (impound). We just didn't know if we should pay the house and car off and have lil money in the bank (10k or so) when we apply for a new construction loan. We were also thinking of buying the plot of land now with the 100k and sit on it till next year. Where we live we can get about 10-20acres for 50-85k.

[Symphonic]

Hello All. My wife and I are looking to buy land and build a home sometime next summer. We currently own our existing home with an outstanding Mortage balance of 103K. The house is worth 185-200K as of the current market. We are coming into some money (right around 110k) and we are looking for a little direction.

Our bills:
Credit Cards= 2300$
Vehicle Loan= 24,500$ (worth 37,000$ put a large down when we bought it)
Home Loan= 103K approximately

Assest's/Cash= about 15,000$

Thats about it as far as debt. So, should we pay off the car and house? Obviously we will be selling the current home, so I am just wondering if we should save the liquid cash as a Down for the new place, or pay off what we currently have. Or does it matter? After the dust settles, we will be selling the car as it is too big for our needs now (kids grown). So without paying anything off, and potential equity in the current home we should be around the 200k mark (relative).

Suggestions? I'm assuming pay off at least the credit cards and vehicle loan. Anyway seems a like a few choices are viable I am just wondering from an outsider perspective, which route would you take and why?

Thank you in advance

Don't worry about paying the house off - especially if you're going to sell it. Either get equity by making improvements to the house, or just keep making minimum payments.

Pay off credit card debt ASAP, and then pay your car off.

[ringpriest]

I wouldn't pay off the house. Mortgages are both tax deductible and often lower interest than the amount of money you could make by investing that same money in the stock market.

Pay off the credit card first and the car loan second. Invest the rest.

This sounds like good advice to me. I also suggest taking a look at purchasing a triple-net property.

[Annoying]

If your income is say, 2000/month and you're spending 900$ on debt payments before your mortgage payment, that's a LOT. Banks generally want 30% debt /income or less.

That's crazy! 30% seems low, as the more I make, the more I want to spend on cars. What's wrong with spending half your income on cars? =D

[drwelfare]

Look at interest rates and base on that.

Also put more on payments, cut out things and excess spending. Do you really need a nice car?

[dextersmith]

I'm pro at finances. I have a mother fucking finance website.

Funny story. I'm selling my house and [...]

Bull shit! You said you're 21 and use your mom's, step dad's, and grandma's credit cards in another thread.

http://www.mmo-champion.com/threads/...light=step+dad

You seem to be rude and asinine in most of your posts. Stop trying to screw people over with their finances jerk. Finances are serious.

@OP:
It's best to seek financial advice from professionals, and ignore emo 21 year old twit basement dwellers who start posts with "pro" and "mother fucking finance website". Best of luck.