Answers in Real Estate

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There are a couple of non-conventional ways to get rid of PMI too.

VA loan USDA loan Navy Federal Credit Union loan

None of those above require PMI at all. You could also check to see if your local credit unions would cut you a deal with no PMI if you refinanced the loan through them. Of course, paying the closing costs might mean you pay more through closing costs than you do in PMI!

You will need to check your mortgage paperwork. If it's a FHA loan, you might be required to have a 5 year payment history before you can get rid of the PMI. Some mortgages require 78% LTV before you can get rid of PMI.

Unfortunately, while the rules of thumb are pretty good, there's no true answer without seeing your actual mortgage's terms and conditions to determine if you can get rid of that pesky bugger. Good luck - hope you can get rid of it ASAP! Try to keep paying the same amount on your mortgage, though; it'll help you pay it off more quickly!

Well the quickest way to remove PMI would be to paydown the mortgage to the appropriate level - generally 80% loan to value. The second way is to pay for a new appraisal and if the figure comes in higher than the appraisal value on file, the you have increased your equity in the property. And hopefully closing the PMI gap. You can also do BOTH if the appraisal comes in higher but not enough to remove it. You can also paydown the difference.

Borrowing money for a down payment to borrow money is almost never a good idea, even if it is your own funds. Not only do you have the borrowing costs on the mortgage but the 401k repayment too. That could make for a cash flow crunch, not to mention the hit to your retirement savings.

I would wait to buy a home until you have the whole down payment saved. Or, sell some company stock and pay the capital gains tax. I would sell enough so that you don't entirely deplete your savings.

You are doing well to have $50K in your 401k at age 32 plus savings, plus a $50K stock account. Keep it up.

I'd also suggest selling some of the company stock and affirm Dan and Jason's comments to not borrow from your 401(k). Assuming you are currently contributing into your 401(k), I highly advise to continue doing so if any way possible. Good luck in your new home!

I'd definitely sell the company stock. Make sure that you choose the company stock which you've held longest to take advantage of long-term capital gains taxes. Never, ever, ever borrow from your 401k unless it means that you're using it to eat food. Not only do you run the risk of having the loan called as Dan mentioned, but now you're paying back the loan with after-tax money, meaning that you're going to be taxed twice on the repayment money. When you're selling the company stock, make sure that you're selling 1.2 times the amount you need. In this case, you're saying that you need $9k, so you'd want to sell $10.8k and put that $1,800 somewhere that you won't touch it so that you have the money ready when you file your 2013 taxes.

Also, don't go wild in buying furniture. You should cash flow that purchase. Don't borrow money to buy furniture. Don't sell stock to buy furniture. You'd be selling assets and purchasing (effectively) liabilities. Go to estate sales and haggle like crazy.

Once you're done with the closing of the house and settled in your house, look at diversifying out of your company stock. Think about it. You're getting a paycheck from this company AND relying on it for growth of your assets. What happens if the unthinkable happens (which happens a lot nowadays) and your company has financial trouble? You're faced with both losing your income AND losing the value of your stock, a double whammy. It's a risky position to be in.

Congratulations on your decision to purchase a home. I would recommend selling the company stock and paying the capital gains tax. Hopefully the stock has been owned for over one year to receive the lower rate. I would discourage borrowing from your 401k plan because if you were to leave the job, the loan becomes due before you leave. In addition, almost half of your investments is tied to your company which is too high. I hope you have much happiness in your new home.

I'm a fee only hourly planner - much different beast than one who does AUM. So, I'm going to look at risk-adjusted, AFTER-FEE returns. Slap too high of a management fee on there, and I'll not touch it.

Basically, I take the approach of passive investing. I am more of a fan of residential real estate (which is the anti-passive investment, I guess), where possible, but that's not practical for all clients. In the alternative, I'm going to look for something which as closely mirrors an index as possible.

In this case, I'd look at overall diversification (geographic, type of investment, etc.) as well as cap rates, performance metrics (vacancies, repairs, capital gains, turnaround time, etc.) that I'd look for in commercial and residential real estate, and then see how the overall portfolio of metrics weighs up against its competitors. I'd also look at the management team - who's doing the picking and who's doing the managing.

Hope this gives you an idea of the things I'd look for in an investment approach for a client. The more transparency, the better.

The negative impacts on your credit can be quite damaging. You would be better off to try and restructure the mortgage with your lender. However, in today's world most banks are not interested in working with lenders unless you are using one of the government programs that are out there. If you absolutely want out of your obligation, you would be better off to try and sell the house. I assume you are underwater, so you would want to work with someone that has experience with short sales.

A biweekly mortgage is just a way for the bank to make extra money. They're going to charge you a fee which is completely unnecessary. Just set up an automatic debit each month for your mortgage + 1/12 of a mortgage payment, and you'll accomplish the same thing. Just make sure that you're indicating that it's an extra principal payment. What I had to do with my mortgage servicer when I had a mortgage was to make two separate payments. One of the payments was the normal mortgage. The second payment was purely principal and indicated as such. Otherwise, they'll ever so helpfully just pay off the interest or advance the payment for the next one that's due, negating the benefits and causing you to sit on the phone for an hour with an incompetent and clueless dolt who can't understand why in the world you'd want to pay off your mortgage early.

Go kill that mortgage as quickly as you can!

My wife and I had a similar decision to make while we were paying off our mortgage. We were being hyperaggressive in paying that thing off (kill your mortgage as quickly as possible; your blood pressure will thank you!), but we had a pretty crummy 2006 vintage rate, so it was very lucrative, potentially, to refinance to a 15 year (or even a 10 year) note to get a lower interest rate. We didn't. Here's why.

We had to pay closing costs and loan origination fees. Since we were going to be paying off our mortgage in under two years, we were not going to be able to recoup the fees as a result of the lower interest rate. So, if you're going to be a) aggressively killing your mortgage, or b) potentially moving in a couple of years, you'll want to incorporate the fees and closing costs into the new mortgage payment to make sure that the breakeven point (the point at which you've saved more from the interest payments than you paid in those costs) is shorter than the amount of time that you'll either own the home or have a mortgage.

When that mortgage is gone, you'll feel a state of euphoria the first couple of months when you can say "hahah! I don't have to pay that $$#& bank anymore!" Then, amazingly enough, the feeling wears off (hedonic adaptation in reverse?), and soon, it evolves into another feeling, which is neat too - "How did we ever live with a mortgage?" Can't wait until you get there!

I'll address the question as foreclosure or short sale versus regular house on the corner not in a distressed situation. If a) you can get it at a price below market, and b) the condition of the property is not such that when you add the repair costs and the purchase price together, you're at or above market value, then I think it's a good way to go. It's how we've bought three properties in the past, and we've been very happy with the outcome. To me, the reason is simple - the bank is in business, and the homeowner is not. The homeowner gets an emotional attachment, which triggers a psychological reaction called the endowment effect. Banks don't suffer from such psychological phenomena (there's a joke in there somewhere, isn't there?). You can read more about how the endowment effect affects (have to think about which of those two words goes where) real estate at the link below.

http://www.hullfinancialplanning.com/the-endowment-effect-why-you-should-buy-a-foreclosure-and-never-sell-to-an-investor/

I'll come at this from the perspective of someone who's made some pretty good real estate investments and someone who's made some pretty bad ones. I am assuming that you're talking about real estate as an investment and not a REIT, so if you're talking about REITs, this isn't the answer for you!

Here's where I screwed up: I got overleveraged. I had a great builder who was building some beautiful houses that we were doing on spec, but we wanted to make sure that he kept his crew together, so we kept going, even after we couldn't sell one of the houses right away. I invested in something which I couldn't rent out to cover the payments. We were building in a ski resort community, and the HOA fees were crazy. It was a pure flip play, and when it didn't flip right away, we were having to continue to reach into the wallet. Ouch. * Raw land in the middle of nowhere. Pro: it had BEAUTIFUL views. Con: Did I mention the middle of nowhere?

Here's where I've done it right: Bought foreclosures or in distressed situations (see http://www.hullfinancialplanning.com/the-endowment-effect-why-you-should-buy-a-foreclosure-and-never-sell-to-an-investor/ for more on the psychology of buying from banks). Gave myself plenty of wiggle room for expenses. Biggerpockets.com recommends you account for expenses by setting aside 50% of rents each month. The rest goes to mortgage service/profit, although, I'm pretty dead set against debt (http://www.hullfinancialplanning.com/there-is-no-such-thing-as-good-debt/) * Paid cash. You can give yourself a lot more leeway when you're paying cash than if you're wondering if you can make a mortgage payment if the renters bail.

The adage of making your money on the purchase has held true for me. Find great deals and don't get over your head in some major slabjacking or foundation repair if you don't already know how to do all of that yourself.

During 2004 through 2007 lenders were allowing people to go as high as 65% indebtedness . That included all debts such as car loans, cc payments, student loans, etc. That madness led to the foreclosure mess we experienced in 2008-2011 where people could not afford their homes either through illness, loss of job or other bills taking a larger portion of take home pay.

When looking at your mortgage, don't forget your total debt payments you make each month. The total amount of debt payments should not exceed 35% of your income.

When looking to add Real Estate to my Clients' portfolios, I look for consistently growing dividends and reliable tenant base such as medical facilities, research facilities, and other tenants who are unlikely to move because of their unique facility needs.