All Forum Posts by: Matthew Hintzke

@Joel Johnson - ok thanks a lot that all makes sense now!

@Ashish Acharya - is it very common for you to be in a lower tax bracket when I retired? I am 28 now and figured I would only go into a higher tax bracket the older I get as I intend (and figure most people do the same) on gaining more equity and wealth throughout the years.  With that assumption I thought a Roth seemed more applicable as I only believe taxes will go higher in the future which means getting taxed now is better than getting taxed in ~35 years.

Years ago when I was a bit more naive in my financial knowledge I opened up a Roth IRA Investement account with Schwab. Over a years I have added little bits of money here and there mostly to play around with the market and get my feet wet. I have been funding this Roth IRA via a manual transfer from my Checking account which is all money that was already taxed. I was thinking about it, and I didn't realize this entire time that I might have been getting taxed twice on this money since a Roth IRA taxes you "on the way in" right?

However, I looked at my statements and account and couldn't find anything that talked about the amount I was taxed, nor did I ever notice a deposit getting taxed ($1000 deposit went into the account as $1000). So does Schwab just assume this money is already taxed since its not coming directly from payroll? If I had a Traditional IRA whould this work any differently since you aren't supposed to get taxed until "the way out"?

I guess I am just trying to understand these 2 types of accounts a little more. Thanks for any insight!

@Dave Skow - ok awesome that totally makes sense now. I will definitely talk to a lender about trying to stick with the Conventional then.

@Dave Skow - ok that makes sense. I know we can put down 5% on a house we can afford the monthly mortage + taxes on, so I think I will go that route, but I will still need to pay PMI.. you are just saying PMI on a 5% conventional is lower than PMI on a 5% (or 3.5%) FHA, correct?

Hi and thanks for all of the quick responses!

@Dave Skow - I did not know you could go as low as 3%. Is that a special kind of conventional? Also, I am still a little confused around how PMI works. I thought PMI was needed if you are under 20% no matter what type of loan you get. Is that not true then? I would love to avoid PMI if possible, but I didn't think it would be unless had like 100K to put down on a 500K house which is just too much.

@Jerry Padilla - are you referring to a 203K loan? I remember reading about that in a book, but thought that it required some major pre-requisites before doing so, but I will have to look into that if we can find a fixer-upper.

Hey!

I am a 28 yo who has lived in the Seattle area for the past 15-20 years and have seen this area's prices go out of control in the last few years especially.  My wife, new daughter, and I are looking to purchase somewhere in the Woodinville, Bothel, Snohomish areas as they are really the only places within our budget.  I mostly wanted to ask for people's advice on 1) How are other first time home buyers able to compete in this market? and 2) What kind of loan do you think I should try to get. I know I should just go to a lender, but before I try to do that I wanted some unbiased advice from here if possible.  Here is our info:

Credit score: 750+

Household Income: ~210k

Downpayment funds: 30-40k depending on how much we want to stretch our budget

Debt: I have about $25k left in student loans that I have vigorously been paying off $1000/month (started at around $70k) since I graduated 5 years ago. Also have about $35k in loans for an SUV  (probably didn't need the 4Runner, I know)

From what I've read, I can get a conventional loan as long as I put at least 5% down, correct? So I think I could afford something between $500-600k and get us the 3-4 bedrooms we are looking for.  Are there any major benefits with doing the conventional over and FHA? I read refinancing can be easier with FHA and you could put down less (3.5%) which gives us more to work with for any maintenance/repair costs.

The easy answer might just be to "go see a lender", but I just figured I would get some advice from the experienced people here.

Thanks for any input,

Matt