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The borrower is slave to the lender

Home Mortgages and Home Buying The borrower is slave to the lender

  • Avatar Tangler 
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    Dave Ramsey is correct. I am buying a home (3rd time ) and my spouse and i are good savers. I have enough to pay cash for house, but this money is in vanguard stock index funds and we would pay 20% ltcg on any gains and tack a huge tax hit if we pay cash, so we applied for a mortgage. Both with near perfect credit, zero debt and a large net worth. Mortgage brokers and their team seem to have zero functioning neurons. Tons of crap to sign. Tons of data requested. tons of asinine questions: “where did this deposit into vanguard  for 80k come from?”
    When i answer: that deposit was from my savings account. they say: “we need a paper trail, can you send documents “ I said: listen, here is my vanguard statement, we have zero debt and enough to pay cash for this house, the only reason we are getting a mortgage is because we want to save in ltcg taxes; you guys have zero risk. We have no debts, no smoke and mirrors here. You have a house as collateral, we are putting 50% down payment and we have enough to buy the house.

    I fill out the stuff, answer the questions then some time passes and more bs questions.

    Then as closing day approaches (we have been waiting for a few months to allow sellers kids to finish school) the mortgage people are in a panic. They had months to request info and now they are running around like chickens freaking out about stuff……….”We need this now if you want to close on time!” “send this newly requested info by this afternoon”

    Tempted to tell them to $&@$&” off and just pay cash. I know that is financially dumb, ( i posted my situation here a few months ago and i discussed with a cpa and a cfa and everyone unanimously agrees mortgage is better financially) but goodness gracious I HATE BEING A SLAVE!
    Ok that is my rant, here are my questions:
    1. Anyone else hate this process?
    2. Am i a jerk for getting annoyed?
    3. Anyone pay cash just to avoid this hassle?
    4. Financially how dumb is it really to pay cash from stocks with LTCG?
    House price: 1.475M
    down payment = 50%
    interest rate is 3.375 on 7:1 arm which we will pay off in <7 income is > 500k
    Savings is over 4M

    Heck i bet the wci community would probably lend to me for a guaranteed 3.375% return. I show you all my statements + tax returns for 4 years + w2 for last 3 years + my savings in vanguard do you really need anything else? seriously? Ok, sorry for the rant. Thanks for listening. Hope this is the last time I do this nonsense.

    #221183 Reply
    ACN ACN 
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    Joined: 01/08/2016

    We’re about to close on a house this month. We rate locked at 4% within 30 days. The following week the mortgage rates continued to plummet for a 30-year fixed and I received another quote from another mortgage lender for 3.6%.

    I ask my current lender to float down the rate or match it and they said they don’t do it. I sent off a second email then asking what the penalty is if I change lenders and I immediately got a response that he will work on getting a match.
    The mortgage lender for you would be stupid not 2 cater to you when you’re getting such a large mortgage. They would rather have your business than no business at all.

    If you're ever having a bad day, just remember in 1976 Ronald Wayne sold his 10% stake in Apple for $2,300.

    #221187 Reply
    Liked by Tangler, ENT Doc
    Avatar bean1970 
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    Status: Physician
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    Joined: 07/12/2017

    paying cash you are not completely immune to some “hassles”…..we set up the wire to buy our house (wire the cash to the closing)…..we ended up getting a call from the bank because they had to file some paperwork to the feds from us stating where the money came from…..yup…..it wasn’t drug money…..unfortunately this is the result of living amongst thugs in the world……the good guys have to justify why we aren’t criminals…..

    #221188 Reply
    Liked by jz, SLC OB, Tangler
    wonka31 wonka31 
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    Status: Physician
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    Joined: 03/24/2018

    They always do this in my experience. I almost think they thrive on the self created chaos towards the end of the closing. This will close as they always do. You can threaten them that you will walk and notify their manager of why you had to, they don’t want to do all of that work without making a sizable commission at the end.

    #221189 Reply
    Liked by Tangler, Zaphod
    Avatar StateOfMyHead 
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    Status: Advanced Practice Provider
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    Joined: 01/01/2019

    I have purchased more than a few properties including years ago when as a cash business owner I had to apply for “no doc” or “low doc” loans which were actually not low or no anything. In my experience the home buying and especially lending process always has hassles, whether it is early, middle or end. My deals have always closed so I learned to just keep giving them whatever they request. At this point you have charted the best course for your situation so I would suck it up and mentally write off the aggravation as the cost of doing business. And most importantly enjoy your new digs. 🙂

    #221190 Reply
    fatlittlepig fatlittlepig 
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    Status: Physician
    Posts: 750
    Joined: 01/26/2017

    Dave Ramsey is correct. I am buying a home (3rd time ) and my spouse and i are good savers. I have enough to pay cash for house, but this money is in vanguard stock index funds and we would pay 20% ltcg on any gains and tack a huge tax hit if we pay cash, so we applied for a mortgage. Both with near perfect credit, zero debt and a large net worth. Mortgage brokers and their team seem to have zero functioning neurons. Tons of crap to sign. Tons of data requested. tons of asinine questions: “where did this deposit into vanguard  for 80k come from?”
    When i answer: that deposit was from my savings account. they say: “we need a paper trail, can you send documents “ I said: listen, here is my vanguard statement, we have zero debt and enough to pay cash for this house, the only reason we are getting a mortgage is because we want to save in ltcg taxes; you guys have zero risk. We have no debts, no smoke and mirrors here. You have a house as collateral, we are putting 50% down payment and we have enough to buy the house.

    I fill out the stuff, answer the questions then some time passes and more bs questions.

    Then as closing day approaches (we have been waiting for a few months to allow sellers kids to finish school) the mortgage people are in a panic. They had months to request info and now they are running around like chickens freaking out about stuff……….”We need this now if you want to close on time!” “send this newly requested info by this afternoon”

    Tempted to tell them to $&@$&” off and just pay cash. I know that is financially dumb, ( i posted my situation here a few months ago and i discussed with a cpa and a cfa and everyone unanimously agrees mortgage is better financially) but goodness gracious I HATE BEING A SLAVE!
    Ok that is my rant, here are my questions:
    1. Anyone else hate this process?
    2. Am i a jerk for getting annoyed?
    3. Anyone pay cash just to avoid this hassle?
    4. Financially how dumb is it really to pay cash from stocks with LTCG?
    House price: 1.475M
    down payment = 50%
    interest rate is 3.375 on 7:1 arm which we will pay off in <7 income is > 500k
    Savings is over 4M

    Heck i bet the wci community would probably lend to me for a guaranteed 3.375% return. I show you all my statements + tax returns for 4 years + w2 for last 3 years + my savings in vanguard do you really need anything else? seriously? Ok, sorry for the rant. Thanks for listening. Hope this is the last time I do this nonsense.

    Click to expand…

    That’s the way lending is now. They want to see the paper trail of where the funds are coming from to make sure you aren’t getting money from someone else

    Expensive house by the way putting 50% down and still have 700K mortgage.

    #221192 Reply
    Liked by Tangler
    Avatar Dont_know_mind 
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    Status: Physician
    Posts: 852
    Joined: 11/21/2017

    I pay in cash now for properties. There’s still hassles though.

    #221197 Reply
    Liked by RocDoc, Tangler
    Avatar CREGuy 
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    Status: Other Professional, Spouse
    Posts: 47
    Joined: 01/16/2018

    Most of what you’re complaining about is a result of Dodd-Frank.  All the paperwork, questions, paper trails, etc. is all part of the regulation that our wonderful government passed for “consumer protection”.  Big cash transactions are also going to create some headaches as you start dealing with Patriot Act issues and more regulations from our wonderful government (thank god we have Big Brother to look out for us!).  It has nothing to do with the particular lender that you’re working with, they’re just following the rules that are in place, just like any other lender would have to do. At the end of the day, it’s really not that big of a deal.  If it helps, just think about how much money you’re saving by not paying CG and cash for the house and think of that as how much you’re being paid to deal with the additional paperwork.

    #221204 Reply
    Avatar Tangler 
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    Status: Physician
    Posts: 259
    Joined: 08/23/2018

    THANK YOU! Yes,

    I pay in cash now for properties. There’s still hassles though.

    Click to expand…

    Do you buy rentals for cash? What kind of hassles do you see? I guess I might just be a little tired too (really hard day at work yesterday, nonstop for over 13 hours with high stress, I imagine my tolerance for bs decrease in direct proportion to how much stress / pain / lack of sleep

    #221227 Reply
    Avatar Tangler 
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    Status: Physician
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    Joined: 08/23/2018
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    Most of what you’re complaining about is a result of Dodd-Frank.  All the paperwork, questions, paper trails, etc. is all part of the regulation that our wonderful government passed for “consumer protection”.  Big cash transactions are also going to create some headaches as you start dealing with Patriot Act issues and more regulations from our wonderful government (thank god we have Big Brother to look out for us!).  It has nothing to do with the particular lender that you’re working with, they’re just following the rules that are in place, just like any other lender would have to do. At the end of the day, it’s really not that big of a deal.  If it helps, just think about how much money you’re saving by not paying CG and cash for the house and think of that as how much you’re being paid to deal with the additional paperwork.

    Click to expand…

    Yes, I really think we need a social safety net to care for the less fortunate, but I HATE big government and unnecessary complication of stuff. The tax law is a perfect example. In the words or the Bogleheads: “investing is simple, taxes are not” I wish the tax laws were much less complicated (small enough to fit on a post card) and I wish the government would get out of trying to fix everything with more regulation. The crooks don’t mind figuring out how to game the system and the rest of us just end up wasting tons of time and ATP.

    #221229 Reply
    Avatar Tangler 
    Participant
    Status: Physician
    Posts: 259
    Joined: 08/23/2018

     

    Expensive house by the way putting 50% down and still have 700K mortgage.

    Click to expand…

    YES, really dumb……….dang it. HATE the cost of living in my area. This is a freaking town house! The average home in the hood is > 1.5M. I am originally from the south east and dude, that is where I wish I could convince my boss = wife to move.  Geographic arbitrage = the south or mid west. BUT, cost of living is less than cost of divorce! (just kidding, sort of)

    FLP, you are a hero of mine by the way.

    #221232 Reply
    Avatar Tangler 
    Participant
    Status: Physician
    Posts: 259
    Joined: 08/23/2018

    I have purchased more than a few properties including years ago when as a cash business owner I had to apply for “no doc” or “low doc” loans which were actually not low or no anything. In my experience the home buying and especially lending process always has hassles, whether it is early, middle or end. My deals have always closed so I learned to just keep giving them whatever they request. At this point you have charted the best course for your situation so I would suck it up and mentally write off the aggravation as the cost of doing business. And most importantly enjoy your new digs.

    Thanks! YES, I need to reach in the top drawer and pull out a better attitude. If this ain’t a first world problem then what is?
    #221233 Reply
    Avatar G 
    Participant
    Status: Physician, Small Business Owner
    Posts: 1546
    Joined: 01/08/2016
    we would pay 20% ltcg on any gains

    Click to expand…

    no NIIT?  sorry, as I’ve explained elsewhere, a pet peeve not to mention that.

    4. Financially how dumb is it really to pay cash from stocks with LTCG?

    Click to expand…

    it depends, right?  when I finally decided to pay off my mortgage, I set up a pay-off fund.  I used a little money out of it, but didn’t like taking a 23.8% haircut for the effort.  because I was in a position of a 23.8% LTCG tax bracket, that implied that I had plenty of income…so I just turned off (most) non-protected savings and directed it to the mortgage.

     

    #221234 Reply
    Liked by Tangler
    Avatar Tangler 
    Participant
    Status: Physician
    Posts: 259
    Joined: 08/23/2018

    They always do this in my experience. I almost think they thrive on the self created chaos towards the end of the closing. This will close as they always do. You can threaten them that you will walk and notify their manager of why you had to, they don’t want to do all of that work without making a sizable commission at the end.

    Click to expand…

    Yes, good points. I should just consider myself lucky that I don’t work in their ridiculous business, and, as you say, I should milk them for as good a deal as I can get.

    #221235 Reply
    Liked by wonka31
    Avatar G 
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    Status: Physician, Small Business Owner
    Posts: 1546
    Joined: 01/08/2016
    The crooks don’t mind figuring out how to game the system and the rest of us just end up wasting tons of time and ATP.

    Click to expand…

    perhaps the first time I’ve heard taxes mentioned on a molecular level.

    #221237 Reply

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