Nick’s parents are forced to confront earlier than anticipated retirement…and they aren’t financially prepared. Now, a bank is offering to buy a part of their mortgage or a part of their house. Is this a scam?!
Anna is househacking, and she locked down an awesome interest rate. But she’s still carrying PMI and is wondering if there’s a way to remove the PMI without refinancing.
Jon from Colorado is curious about after-tax contributions to a Roth 401k and would like us to talk about why we wouldn’t recommend it.
Courtney from Denver is a real estate investor who wants to invest in new locations and wants tips on building out her network.
Former financial planner Joe Saul-Sehy and I tackle these four questions in today’s episode.
P.S. Got a question? Leave it here.
Here are the details:
Nick asks (at 02:19 minutes): At the end of this year, my dad has to retire. He was not planning to do so, so he’s not financially prepared. That has put him and my mom in an interesting position.
They have a house that’s worth about $2.5 to $3 million, but they owe $1 million on it. They also owe the IRS about $300,000 in back taxes and have about $50,000 in credit card debt. Their savings and retirement accounts are worth about $50,000.
Recently, they were approached by a bank that offered to buy part of their mortgage or part of the house. They offered them up to 20% of the mortgage and my parents are intrigued by this because they think it could buy them a little bit more time in the house to figure out a retirement plan.
My questions are twofold:
One, is this partial mortgage thing legitimate or is it predatory? I’m very skeptical of something like this. I worry that the fine print could bite them in the butt later and maybe they’d lose the house.
Two, if they use that option, what should they do after that? It seems like the best course of action is to sell the house, downsize, put the funds from the house in a smart, conservative investment and live somewhere that’s a lot cheaper.
Anna asks (at 16:43 minutes): I bought a house back in November 2020 with an interest rate of 2.375%. I have PMI on the house and I have $13,000 left until the PMI falls off.
With the housing market booming and prices being high, the value of my house has gone up about $30,000.
I‘ve been learning about refinancing and using that extra equity to remove the PMI. I was hoping you could clarify my options for me. I wouldn’t want to refinance because of the great interest rate, but I’d love any advice you can give.
Jon asks (at 35:40 minutes): On a recent episode, after tax contributions to a 401k were discussed. You both felt that this was complicated and didn’t recommend it.
Could you spend a little time discussing the differences between a Roth 401k and an after-tax contribution to a 401k?
Courtney asks (at 43:59 minutes): My husband and I have two local rental properties and we’re looking to start investing elsewhere. I’ve loved your and Suni’s episodes on Invest Anywhere.
In one of those episodes, you guys mentioned that developing relationships with other investors in the cities that you’re considering investing in has been really key for you.
I was wondering specifically how you went about developing those relationships, meeting up with people when you’re in town, et cetera?
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