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Bob_Sacamano

So moving forward with the understanding that a Roth IRA is better for them, here's my plan (please critique), - Maintain their Traditional IRAs but cease future contributions. Exchange VASIX for VBIAX ?? - Open Roth IRAs for them and contribute the max 7k each to VBIAX? - Open a taxable account for...

Bob_Sacamano

OP, Given your parents tax bracket, I suggest maxing Roth IRA contributions at this point rather than towards a traditional IRA. Overall, 20/80 is too conservative for what is likely to be a 20-30 year lifespan. That said, we don’t know your folks Risk Tolerance, Retirement Goals, plans etc. Withou...

Bob_Sacamano

Not everything listed in that screenshot will be an actual "expense" they see. Really a lot of it is just an attempt to budget for a worst case scenario to roughly estimate what their year to year balances could be in retirement. I expect actual expenses to be more like $3500/mo, and even...

Bob_Sacamano

Not everything listed in that screenshot will be an actual "expense" they see. Really a lot of it is just an attempt to budget for a worst case scenario to roughly estimate what their year to year balances could be in retirement. I expect actual expenses to be more like $3500/mo, and even ...

Bob_Sacamano

It's customary in our culture that when parents get to an age they can't care for themselves, they move in with their children. The majority of the expenses listed would be eliminated at that point and social security/assets would cover them. I understand being the financial backstop for your paren...

Bob_Sacamano

Yikes. What happens in 15 years when the property payments stop? You mom is only 60. Mine lived until 91. So, starting at 75, you've got expenses of $4,700 and social security of $1,500. That leaves a monthly shortfall of more than $3,000, unless I've got the facts completely wrong. Given that they...

Bob_Sacamano

How much longer do they expect to work? The $4780/mo gross income is payout that they will receive for the next 15 years from the recent sale of a property. They may pick up a part-time job to supplement this but that remains to be seen. How much do they expect in SSA when they retire? Dad is expect...

Bob_Sacamano

Emergency funds: 6 months plus Debt: home mortgage @ 2.75% interest Tax filing status: married, filing jointly Tax rate: 10-12% Federal, 5.75% State Age: Dad - 63, Mom - 60 Income: $4780/mo Current retirement assets (about $500k total) Asset allocation: 20/80 currently Traditional IRA Dad - $35k 10...

Bob_Sacamano

I don't see any overthinking going on. You are with: Schwab Vanguard CapitalOne Adding an account with Vanguard is a very low risk proposition. Vanguard, if I recall, is the largest holder of retirement assets in the US. I am partial to Fidelity but to me there are no significant differences. You d...

Bob_Sacamano

We've put an offer on a used home. Our mortgage broker has recommended a Family Opportunity Mortgage. This is a Fannie Mae program that allows adult children to buy a home for their elderly parents who cannot do so themselves. It's not well known but there's many results for it on Google. What do yo...

Bob_Sacamano

A mortgage broker recommended what she called a "Family Opportunity Loan". Is anyone familiar with this? There's many articles for it online but I don't see how it's any different from co-signing. Apparently it is an actual FHA program. She said I would apply as if I was buying a second ho...

Bob_Sacamano

Here are the underwriting guidelines for both Fannie Mae and Freddie Mac. They will outline what is acceptable for income verification. https://selling-guide.fanniemae.com/Selling-Guide/Origination-thru-Closing/Subpart-B3-Underwriting-Borrowers/ and https://guide.freddiemac.com/app/guide/topic/5300...

Bob_Sacamano

Here are the underwriting guidelines for both Fannie Mae and Freddie Mac. They will outline what is acceptable for income verification. https://selling-guide.fanniemae.com/Selling-Guide/Origination-thru-Closing/Subpart-B3-Underwriting-Borrowers/ and https://guide.freddiemac.com/app/guide/topic/5300...

Bob_Sacamano

So far the banks we have called are not playing ball. They want to see some record of verifiable income. The sale agreement and expected payments from that doesn't qualify apparently. We have a house picked out and want to go under contract but this is holding us up. I may have to cosign... Again, ...

Bob_Sacamano

So far the banks we have called are not playing ball. They want to see some record of verifiable income. The sale agreement and expected payments from that doesn't qualify apparently. We have a house picked out and want to go under contract but this is holding us up. I may have to cosign...

Bob_Sacamano

My parents have a small business property that they are in the process of selling with the intention of then buying a house/retiring. The sale has been negotiated through a seller-financed agreement. They will receive monthly payments (with interest) from the buyer for the sale of the property over ...

Bob_Sacamano

So are the prepaids and escrow partly why my loan balance went up? I guess I'm wondering now if there might have been a mistake or I was misled somehow? And if I should refinance again to correct it. I'd pull out your final loan closing statement and see why the cost was so high. I am not sure whet...

Bob_Sacamano

Example portfolio. Here is an example portfolio that you could consider. This is a three-fund type portfolio, modified as necessary to accommodate the fund offerings in your 401k. Current portfolio size = $170k. New annual contributions = about $36.4k. The asset allocation is: 20% bonds; 20% intern...

Bob_Sacamano

I'm in a very similar situation. Have been paying $1k extra towards my mortgage hoping to pay off the loan in 8 years. But recently I had the same thought as you so I did the math. Even factoring interest saved on the loan and continuing to invest $1k after 8 years, the investment came out ahead by ...

Bob_Sacamano

I am trying to put together an example portfolio idea for you to consider. About how much do you believe you might be able to contribute to a taxable account annually? Is your HSA at Vanguard? Are you able to to use any Vanguard fund in that account? Hi, thanks for your help. I've read through your...

Bob_Sacamano

401k options:

Bob_Sacamano

The math works like this - if you will be in the same or higher tax-bracket in retirement, use more Roth now. If not, use traditional. It might be possible to drop into a lower bracket as a single in retirement, but my guess is that it is not very likely. A single person has to have a very low inco...

Bob_Sacamano

I've updated the original post with additional information. I will check what the fund selections are like in the 401k and provide that tomorrow. I don't quite understand why the pre-tax 401k is being recommended over the Roth 401k and Roth IRA. The upfront tax deferral is nice but I will likely be ...

Bob_Sacamano

Emergency funds: 6 months plus Debt: home mortgage @ 3.75% interest, no other debt besides credit card use Tax filing status: single Tax rate: 22% Federal, 5.75% State Age: 30 Salary: $80k Current retirement assets (about $170k total) Asset allocation: 90/10 currently, can be convinced 80/20 or 70/...

Bob_Sacamano

Thank you for the response. I had a feeling it was closing costs but I don't understand how they could be that high. The lender explained that everything is basically by the book no matter the lender. Her cut is $1500 for admin/processing (which is high, I regret not shopping around) but beyond tha...

Bob_Sacamano

This has nothing to do with your home value increasing. Your loan amount went up is because you must have financed your closing costs, which must have been fairly high if your loan value is higher than your original loan 2 years ago. Your loan balance would have dropped to about $168,000 after the ...

Bob_Sacamano

Original Loan Oct 2018 closing $190k home value 10% down payment $171k loan 5% interest / 30yrs Refinance Loan Dec 2019 $200k home value $176k loan 3.75% interest / 30yrs I realize it's too late to ask questions but I'd like to know if I made the right choice to refinance at the time and the answer...

Bob_Sacamano

Original Loan Oct 2018 closing $190k home value 10% down payment $171k loan 5% interest / 30yrs Refinance Loan Dec 2019 $200k home value $176k loan 3.75% interest / 30yrs I realize it's too late to ask questions but I'd like to know if I made the right choice to refinance at the time and the answer...

Bob_Sacamano

Original Loan Oct 2018 closing $190k home value 10% down payment $171k loan 5% interest / 30yrs Refinance Loan Dec 2019 $200k home value $176k loan 3.75% interest / 30yrs I realize it's too late to ask questions but I'd like to know if I made the right choice to refinance at the time and the answer ...

Bob_Sacamano

Thank you all for the thoughtful responses. The fact that all of you are sharing the exact same sentiment is assuring. I've been front loading my 401k since the beginning of 2020 by contributing 70% of each paycheck so I only have about 10k left to add before I reach the maximum for the year. The Ro...

Bob_Sacamano

So what is everyone else on this board doing if a target retirement fund is perfectly good? How come I see so few people here talking about them? Surely I can do better than a set it and forget it approach. Maybe something more tailored for the time. It seems a lot of people are making calculated mo...

Bob_Sacamano

I started investing in 2013 when I got my first real job at age 23. I heeded much of the advice given here and elsewhere which was to set up a 3 fund portfolio in a target retirement fund. I've been maxing out each of my retirement accounts since (except the 401k which I started contributing to two-...

Bob_Sacamano

My mom (59) and dad (62.5), together, have about 48k currently invested in a Traditional IRA at Vanguard. Their holdings are in VTTVX which is a 2025 target retirement fund with 60/40 allocation. I opened these accounts for them in 2015, partly to take advantage of Saver's Credit, and have held on d...

Bob_Sacamano

With closing costs financed into the loan, aren't we talking about a difference of a few dollars over the life of the loan?

Bob_Sacamano

Here are the loan details.

How should I go about shopping around? Which banks are best for refinancing? Anyone had experience with these?

Rocket Mortgage
Better.com
Quicken
BoA

Bob_Sacamano

Lender is saying she usually overestimates on the loan amount and I could get up to $1700 back at closing.

Bob_Sacamano

Not sure about all the inputs but I used this calc to run the numbers:

https://imgur.com/zcoSTVQ

Can someone confirm? Thanks!

Bob_Sacamano

My mortgage lender contacted me to discuss refinancing my loan. At face value it seems like I should follow through with it but I just want to make sure everything checks out. Current Loan Interest rate: 5% Original loan amount: $170,910 Principle balance: $168,388.48 Term: 360 months New Loan Inter...

Bob_Sacamano

Are home warranty plans really that bad? I plan to stay at this place for about 5-7 years. The cost for the warranty would amount to about $800/yr. I would assume they keep the system running for that time with repairs or even replace the entire system if it comes to that. But in any case $800 x 7 <...

Bob_Sacamano

I bought a 1000 SF condo around this time last year and had a full inspection done before closing. The inspector told me the HVAC system was in good operational condition but could die at any moment given that it's 18 yrs old. I didn't negotiate a lower sale price since there was really nothing &quo...

Bob_Sacamano

I plan on raising some [ruckus] with the HOA to see what they are willing to do. Perhaps if I twist their arm a bit they will at least concede on the deductible. There have been several cases of burst pipes on the property, I am not the first to deal with this. What will contacting the other condo o...

Bob_Sacamano

There was a water damage incident in my condo back in June. I came home one night to find my bathrooms and bedrooms flooded with water from the unit above. The person who rents that unit said his toilet overflowed on its own while he was at work. Now I have to admit my ignorance and lack of experien...

Bob_Sacamano

Should I show insurance the quote that's 3k above theirs or the one that's 10k above? Am I required to choose that contractor once I share the quote? Can/should I show them multiple quotes?

Bob_Sacamano

I opened a T-IRA for my parents in April 2015 and deposited their funds into VTTVX which is a Vanguard 2025 target retirement fund. The balance is now at 45k (6k net gain, 6.5% rate of return) to give you an idea of its performance thus far. I am meeting with a financial advisor with Edward Jones on...

Bob_Sacamano

I filed a claim with home insurance for a water damage incident and received an estimate for the damage in the amount of 24k. The policy is for replacement cost coverage. I got quotes from 3 separate contractors to do the repair work. They came in at 3k-10k higher. Given that the adjuster's estimate...

Bob_Sacamano

I can't risk missing my October 2 closing date. Can I negotiate origination fees? I don't know why there's an administration and processing fee. I'm sure the lender has a perfectly good reason...

Bob_Sacamano

I feel like my closing costs are relatively high. Even subtracting the single payment for PMI and mortgage points ($9,826 - $1,487 - $812) my closing costs are $7,527 or 3.96% of the sale price. Do any of these seem abnormally high to anyone? Can/should I negotiate this with my mortgage broker? http...

Bob_Sacamano

I wanted to compare 10% vs 20% down after 5 years so I did a little math. Please check me on this: So off the bat with 10% down I am putting 19k less towards the condo. Putting 20% down, however, means: $6,120 less mortgage paid ($917/mo vs $815/mo) $4,565 less interest paid (used an amortization sc...

Bob_Sacamano

Can someone comment on the 10% vs 20% argument. As I see it, the PMI is easily offset by the fact that I'll have more savings with 10% down that I can then invest or even put into a Ally no penalty CD. Also she claims the 10% down payment earns me a lower interest rate, could this be true? And final...

Bob_Sacamano

You guys have me worried now. I'm past the due diligence period and closing is set for October 2. If I get a another quote, I won't meet the closing date. The loan has not been finalized so I can still decide to put down 20%. Is it possible that my interest rate is in fact 5%? I think the daily aver...

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