All Forum Posts by: Ron S.

that was it? Did you prematurely post? 

 Good summation. Also worth mentioning that you only have 15 days to submit the bid declaration.

its not that complicated. Junior goes to sale, you are successful bidder at sale. You own the property subject to the senior. You exercise your rights as a junior lienholder to pay off the senior. You might have to show you are the junior now with your foreclosure paperwork but by statute you have the right to pay the senior off. If you don't, they'll foreclosure and wipe you out.

What's gonna suck is, say the property is worth $500,000 and say the senior is $200,000 and say the junior is $100,000. The junior is going to go to say at full debt at $100,000. No doubt someone else is going to bid. Let's say someone bids $199,999 and you bid $200,000 and no one else bids...you are like, "Yay, I won and get the property". You do but guess what, you don't' get that extra $100,000 back. You paid $200,000 even though the total debt on the junior was only $100,000. The surplus proceeds do not go to pay the senior down and do not get reimbursed back to you as an overpayment. Any surplus would be subject to claim by junior encumbrances and then to the owner of record 

...and when your note comes due, and you can't refinance out of the maturity, what's your exit strategy? That's a nonconforming property, where you have fewer lenders that will bite on it so you are limited there but let's assume that's not an issue. Let's also assume you have the credit qualifications, you're going to have an equity issue in that you bought 10% above market (roughly) and even if you did it owner occupied in your refinance, you are still above 100% LTV so, you are limited even further with your exit strategy.

Sounds like the only way this works is if he gives you a 30 year term. That doesn't sound realistic. Sounds more realistic that you get into this and when the note matures and you can't refi out of it, your handing the keys back to him.

You knew about the PMI when you took the loan out. You also benefited from the tax deduction that includes PMI and per your own statement, it's been a great experience until you looked at a recent statement that reminded you of what you once knew but forgot from long ago.

Do the math. Will a refinance now recover $1,800 per year you pay in PMI? Will you be able to get a rate now, low enough to reduce your payment and recover the cost of the refinance in 3-4 years rates in 2017 were 3-4%. Today they are 6.5-7.5%) . Will you be there in your home in 3-4 years?

In my opinion, there are too many factors to consider to refinance, just because you have PMI. If the math works ok but it should be compelling and a no brainer in savings for you to refinance now, in this market.

The interest rate is only important for your ability to pay and will not factor into anything in the future from an equity standpoint (But good luck getting a 5% rate when market rates are nearly 7%. Maybe an ARM would be better but you have the risk of them going up as well.) Neither will your upgrades for the most part. Real estate by definition is speculative for the most part but value usually increases over time all things being equal (Absent cataclysmic events). Appreciation over time over the last 40 years has been around 5% per annum (per FHFA) so, is real estate a good investment? If those numbers work for you then yes.

Don't overthink it.

 the short answer is no. That land doesn't convert to cash for a downpayment, unless its encumbered or sold and no institution is going to lend on a $20M piece of property.

 Understatement of the year.

not worth doing your own eviction. Hire an attorney for an unlawful detainer and be done with it.

Why would you need the will to structure the step dad part? The only reason you would, is if you doubt your own integrity. If you and your mom want the step dad to be able to live there, have her will it to you and upon her passing, let him stay, rent free or not, unless there is more to it and I'm missing it.