Getting Real (Estate) - Page 8

glatt · 01-17-2009, 10:58 AM

Looking at refinancing now. We've got 24 years left on our mortgage, but looking at average national rates for 15 year mortgages, what we are paying now per month, and what our remaining balance is, it looks like we can probably refinance now to a 15 year mortgage and keep our monthly payments the same. We'd pay it off nine years sooner, and the only drawback would be the closing costs, which would probably be the equivalent of a couple months of mortgage payments.

We haven't actually shopped around or anything yet for actual quotes.

Does anyone happen to know if rates are expected to continue to drop? 15 year rates seem to be at 4.65% right now.

smoothmoniker · 01-17-2009, 11:15 AM

they may drop a little, but not by much. The banks themselves are getting money for free right now, so what you see on the rates is their profit margin. There's no skin left on the cat, so to speak. Nothing left to cut.

We got a 30-year fixed lock at 4.875, with an option or a one-time float down within 21 days. If the rate moves down within 21 days, we get the new rate.

TheMercenary · 01-18-2009, 07:31 AM

Quote:

Originally Posted by glatt

Looking at refinancing now. We've got 24 years left on our mortgage, but looking at average national rates for 15 year mortgages, what we are paying now per month, and what our remaining balance is, it looks like we can probably refinance now to a 15 year mortgage and keep our monthly payments the same. We'd pay it off nine years sooner, and the only drawback would be the closing costs, which would probably be the equivalent of a couple months of mortgage payments.

We haven't actually shopped around or anything yet for actual quotes.

Does anyone happen to know if rates are expected to continue to drop? 15 year rates seem to be at 4.65% right now.

I think the rates are going to be as low as you are going to see them. We refinanced to a 15yr loan and our payments went up a few hundred dollars. Best thing we ever did. We only owe 8 years or so. At the time, around 2001, closing costs were around $3500, but I guess it depends on the market and the size of the loan. Lookout could tell us better.

glatt · 01-18-2009, 09:22 AM

Quote:

Originally Posted by TheMercenary

We refinanced to a 15yr loan and our payments went up a few hundred dollars. Best thing we ever did.

We ran a bunch of different calculators yesterday using all the actual numbers in front of us, and it looks like our monthly payments would go up by around $150 a month. That's actually a little too painful for us. We could swing it, but it would impact our already frugal standard of living for a few years. I think we may stick with the old loan. It's a tough call. Paying off the house 9 years sooner would be really nice. Ugh.

monster · 01-18-2009, 07:36 PM

beest did the same and our increase was more painful that that....

classicman · 01-18-2009, 07:46 PM

I refinanced mine from a 30 to a fifteen about 6 years ago. It was painful at first, but now I only have a few years left and that feels really good.

smoothmoniker · 01-18-2009, 08:23 PM

Sheesh, do you people understand nothing about the American way of life? You're supposed to refinance a new 30-year mortgage, take out all of your equity and invest it in the stock market, preferably on margin.

Think of all the money you'll make! Can't lose!

Radar · 01-18-2009, 11:54 PM

A friend of mine got one of those "interest only" loans a few years ago and I thought he was an idiot. Then he told me he claims single/zero on his taxes, and since his payments are all interest...at the end of the year he gets a check for about $12,000. He has the discipline to use that check to pay down the principle of the house. Doing it this way, his payments are lower, and he's actually paying the house off faster than a conventional loan.

It does take a lot of discipline though. When you've got a big fat check like that in your hand, a lot of other ways to spend it must pop into your head.

classicman · 01-19-2009, 07:12 AM

What about the interest he could have been earning/losing all year? How does that factor into this equation? Wouldn't he be better off, if he is that disciplined, to pay more each month?

TheMercenary · 01-19-2009, 07:16 AM

Yea, the neighbor bought a house on an interest only loan, 450k. He loses it today on the courthouse steps at auction to the highest bidder. The house is on prime real estate and is about 4000sq feet. Anyone who wants it can get it cheap.

Griff · 01-19-2009, 07:43 AM

I still can't get over the numbers you guys are tossing around.

classicman · 01-19-2009, 08:09 AM

What do you mean Griff?

Griff · 01-19-2009, 08:36 AM

The house prices mentioned are approaching one full decimal place from comparable homes in my local market. Beyond that, as an owner builder, I just can't conceive of paying down that kind of debt. I just wouldn't have the stomach for it. I think the stress of knowing I was one job away from financial ruin would be debilitating. I admire everybodies stones but am way more comfortable debt free.

smoothmoniker · 01-19-2009, 10:34 AM

You can't think of it that way. Add up the amount of money you pay into savings, into stock investments, and into mortgage each month. Now, instead of spreading it out into all of those places, you're putting all of that investment money into just one thing, the house.

In CA, the roll of the dice is a pretty good bet. If you're a generational buyer (buy once, live there forever), the chance that you'll retire with a home free and clear worth 10x your annual salary is a decent one. I don't know that that's true elsewhere.

It's a home, but it's also your primary savings and investment. That's a big part of why my wife and I are stretching so far to get into this house. We feel like it's the best leveraged investment we could make right now. Also, we really, really want to live there.

Undertoad · 01-19-2009, 10:41 AM

tax deduction

01-17-2009, 11:15 AM	#107
smoothmoniker to live and die in LA Join Date: Feb 2003 Location: Los Angeles Posts: 2,090	they may drop a little, but not by much. The banks themselves are getting money for free right now, so what you see on the rates is their profit margin. There's no skin left on the cat, so to speak. Nothing left to cut. We got a 30-year fixed lock at 4.875, with an option or a one-time float down within 21 days. If the rate moves down within 21 days, we get the new rate. __________________ to live and die in LA

01-18-2009, 07:36 PM	#110
monster I hear them call the tide Join Date: Dec 2005 Location: Perpetual Chaos Posts: 30,852	beest did the same and our increase was more painful that that.... __________________ The most difficult thing is the decision to act, the rest is merely tenacity Amelia Earhart

01-18-2009, 07:46 PM	#111
classicman barely disguised asshole, keeper of all that is holy. Join Date: Nov 2007 Posts: 23,401	I refinanced mine from a 30 to a fifteen about 6 years ago. It was painful at first, but now I only have a few years left and that feels really good. __________________ "like strapping a pillow on a bull in a china shop" Bullitt

01-18-2009, 08:23 PM	#112
smoothmoniker to live and die in LA Join Date: Feb 2003 Location: Los Angeles Posts: 2,090	Sheesh, do you people understand nothing about the American way of life? You're supposed to refinance a new 30-year mortgage, take out all of your equity and invest it in the stock market, preferably on margin. Think of all the money you'll make! Can't lose! __________________ to live and die in LA

01-18-2009, 11:54 PM	#113
Radar Constitutional Scholar Join Date: Dec 2002 Location: Ocala, FL Posts: 4,006	A friend of mine got one of those "interest only" loans a few years ago and I thought he was an idiot. Then he told me he claims single/zero on his taxes, and since his payments are all interest...at the end of the year he gets a check for about $12,000. He has the discipline to use that check to pay down the principle of the house. Doing it this way, his payments are lower, and he's actually paying the house off faster than a conventional loan. It does take a lot of discipline though. When you've got a big fat check like that in your hand, a lot of other ways to spend it must pop into your head. __________________ "I'm completely in favor of the separation of Church and State. My idea is that these two institutions screw us up enough on their own, so both of them together is certain death." - George Carlin

01-17-2009, 10:58 AM	#106
glatt ™ Join Date: Jul 2003 Location: Arlington, VA Posts: 27,717	Looking at refinancing now. We've got 24 years left on our mortgage, but looking at average national rates for 15 year mortgages, what we are paying now per month, and what our remaining balance is, it looks like we can probably refinance now to a 15 year mortgage and keep our monthly payments the same. We'd pay it off nine years sooner, and the only drawback would be the closing costs, which would probably be the equivalent of a couple months of mortgage payments. We haven't actually shopped around or anything yet for actual quotes. Does anyone happen to know if rates are expected to continue to drop? 15 year rates seem to be at 4.65% right now.

01-19-2009, 07:12 AM	#114
classicman barely disguised asshole, keeper of all that is holy. Join Date: Nov 2007 Posts: 23,401	What about the interest he could have been earning/losing all year? How does that factor into this equation? Wouldn't he be better off, if he is that disciplined, to pay more each month? __________________ "like strapping a pillow on a bull in a china shop" Bullitt

01-19-2009, 07:16 AM	#115
TheMercenary “Hypocrisy: prejudice with a halo” Join Date: Mar 2007 Location: Savannah, Georgia Posts: 21,393	Yea, the neighbor bought a house on an interest only loan, 450k. He loses it today on the courthouse steps at auction to the highest bidder. The house is on prime real estate and is about 4000sq feet. Anyone who wants it can get it cheap. __________________ Anyone but the this most fuked up President in History in 2012!

01-19-2009, 07:43 AM	#116
Griff still says videotape Join Date: Feb 2001 Posts: 26,813	I still can't get over the numbers you guys are tossing around. __________________ If you would only recognize that life is hard, things would be so much easier for you. - Louis D. Brandeis

01-19-2009, 08:09 AM	#117
classicman barely disguised asshole, keeper of all that is holy. Join Date: Nov 2007 Posts: 23,401	What do you mean Griff? __________________ "like strapping a pillow on a bull in a china shop" Bullitt

01-19-2009, 08:36 AM	#118
Griff still says videotape Join Date: Feb 2001 Posts: 26,813	The house prices mentioned are approaching one full decimal place from comparable homes in my local market. Beyond that, as an owner builder, I just can't conceive of paying down that kind of debt. I just wouldn't have the stomach for it. I think the stress of knowing I was one job away from financial ruin would be debilitating. I admire everybodies stones but am way more comfortable debt free. __________________ If you would only recognize that life is hard, things would be so much easier for you. - Louis D. Brandeis

01-19-2009, 10:34 AM	#119
smoothmoniker to live and die in LA Join Date: Feb 2003 Location: Los Angeles Posts: 2,090	You can't think of it that way. Add up the amount of money you pay into savings, into stock investments, and into mortgage each month. Now, instead of spreading it out into all of those places, you're putting all of that investment money into just one thing, the house. In CA, the roll of the dice is a pretty good bet. If you're a generational buyer (buy once, live there forever), the chance that you'll retire with a home free and clear worth 10x your annual salary is a decent one. I don't know that that's true elsewhere. It's a home, but it's also your primary savings and investment. That's a big part of why my wife and I are stretching so far to get into this house. We feel like it's the best leveraged investment we could make right now. Also, we really, really want to live there. __________________ to live and die in LA

01-19-2009, 10:41 AM	#120
Undertoad Radical Centrist Join Date: Jan 2001 Location: Cottage of Prussia Posts: 31,423	tax deduction

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