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      04-08-2020, 10:11 PM   #23
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Lender is offering to roll refinancing closing costs into the loan. That’s a no-no, right?
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      04-09-2020, 01:21 PM   #24
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Originally Posted by spencers View Post
Lender is offering to roll refinancing closing costs into the loan. That’s a no-no, right?
Why? seems like a good idea if its low interest rate.
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      04-09-2020, 01:30 PM   #25
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You guys looking at 15 years should do the math on the difference between your 15 year mortgage versus just getting a 30 year and paying ahead when you want.

15 year mortgage is dave ramsay type stuff.
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      04-09-2020, 01:35 PM   #26
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Why? seems like a good idea if its low interest rate.
lol I think most people would rather not pay interest on ~$3000 over a 30 year time frame if they can afford not to, that's why.
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      04-09-2020, 01:39 PM   #27
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Originally Posted by spencers View Post
Lender is offering to roll refinancing closing costs into the loan. That's a no-no, right?
I wouldn't
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      04-09-2020, 01:40 PM   #28
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Originally Posted by FCobra94 View Post
lol I think most people would rather not pay interest on ~$3000 over a 30 year time frame if they can afford not to, that's why.
Why? Tax deductible 3% interest? Seems impossible to not beat that over 30 years if you put it into an investment.

Why not pay your mortgage down as much as you possibly can when you refinance if that's your logic?
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      04-09-2020, 01:41 PM   #29
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Originally Posted by ImolaMoop View Post
You guys looking at 15 years should do the math on the difference between your 15 year mortgage versus just getting a 30 year and paying ahead when you want.

15 year mortgage is dave ramsay type stuff.
I was doing it because I can go from 4.125% to a credit union of 2.5% and I was going to put down a large chunk of money down at re-fi. I think closing costs will be $3k or under. I'm trying to pay my house off in the next 5 years. Open to reasons on why I shouldn't.
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      04-09-2020, 01:52 PM   #30
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Originally Posted by rebekahb View Post
I was doing it because I can go from 4.125% to a credit union of 2.5% and I was going to put down a large chunk of money down at re-fi. I think closing costs will be $3k or under. I'm trying to pay my house off in the next 5 years. Open to reasons on why I shouldn't.
The reason is you can use the money you're throwing into mortgage payments and chunk down payments to invest in other things. Like stocks or rental properties.

Mortgages are the cheapest money you can get, plus being tax deductible for most people. There is virtually not any 15 or 30 year period in the history of the stock market that wouldn't dramatically pay off in your favor if you chose to invest instead of pay down your mortgage.



Additionally, if you are still eager to pay down your mortgage ASAP, at least do the math on your total interest of a 30 year + extra principal payments versus a 15 year. It's not that big of a difference and you keep the flexibility.
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      04-09-2020, 01:54 PM   #31
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Originally Posted by spencers View Post
Lender is offering to roll refinancing closing costs into the loan. That’s a no-no, right?
I do it. If your rate is good enough why wouldn't you? It will just make your loan balance that much higher but if you are paying less in interest than you are planning to make in other places, there is no reason not to.
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      04-09-2020, 01:59 PM   #32
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Originally Posted by Marmugmotleocay View Post
I have an over 800 credit score and the best 15 year I can get is 3.125 % at my Credit Union with $3900 closing costs. Who is offering in the 2% range?
Here is who I went with but you have to be semi local I think (this way with a lot of CU). They knock another 0.25-0.50% off for "member discount" when you actually call in to lock it in. Closing costs are <$1,600.
https://www.veridiancu.org/rates/loan-rates/mortgage

Here is another local CU with similar rates https://www.greenstate.org/rates/mortgage-rates.html
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      04-09-2020, 02:02 PM   #33
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Quote:
Originally Posted by ImolaMoop View Post
Quote:
Originally Posted by rebekahb View Post
I was doing it because I can go from 4.125% to a credit union of 2.5% and I was going to put down a large chunk of money down at re-fi. I think closing costs will be $3k or under. I'm trying to pay my house off in the next 5 years. Open to reasons on why I shouldn't.
The reason is you can use the money you're throwing into mortgage payments and chunk down payments to invest in other things. Like stocks or rental properties.

Mortgages are the cheapest money you can get, plus being tax deductible for most people. There is virtually not any 15 or 30 year period in the history of the stock market that wouldn't dramatically pay off in your favor if you chose to invest instead of pay down your mortgage.



Additionally, if you are still eager to pay down your mortgage ASAP, at least do the math on your total interest of a 30 year + extra principal payments versus a 15 year. It's not that big of a difference and you keep the flexibility.
We have 2 rental properties and I max out my 401k every year. I still have money saved that I could potentially invest. I've thought about buying another rental but just haven't looked into it much.

The other reason I want to get my mortgage paid off is that I am in a job currently where I am doing very well and in my industry I would be hard pressed to find another company to pay the bonuses with how flexible this job is. If I could squeeze a few more years of doing that & pay off my mortgage then I could either work part time or do some non profit work.

Thanks for the input. You've given me some ideas on numbers to run.
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      04-09-2020, 02:34 PM   #34
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Quote:
Originally Posted by rebekahb View Post
I was doing it because I can go from 4.125% to a credit union of 2.5% and I was going to put down a large chunk of money down at re-fi. I think closing costs will be $3k or under. I'm trying to pay my house off in the next 5 years. Open to reasons on why I shouldn't.
If you are planning on paying off the house within 5 years, unless you are planning on just doing it in a lump sum in 5 years and not over the next 5 years, a refi likely does not make as much sense for you with $3k closing costs.
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      04-09-2020, 02:47 PM   #35
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This question is debated endlessly on all financial fora. 3% money is cheap and you should try to get as much of it as possible. Especially tax deductible 3% money. Heck, inflation will make that 0% real money over a 30 year period. Deduct the interest on top of that and you are making money.

Sounds pretty simple and straight forward, right?

Well, investing is probably 90% emotion and 10% data driven. I plopped $500k into my house last Sept to pay off the mortgage. That was 3.875%, 30 year money. It felt good, but not euphoric. It also removed a line from my budget (mortgage). But it also added 2 lines: real estate taxes and home insurance that escrow took care of before (I hate escrow, BTW, but it was required for my loan). But man, do I look like a genius now! That $500k would have been in this market and lost 30%. I'm a genius! Not really. Just got lucky.

We are moving and building a house. The proceeds from our current house would allow us to pay cash for our new house. But I locked in @ 3.125% for 30 years and just can't pass that up. When all that money is in my account come August or so, we will take a look at what we want to do with it yet again. Pay off the house? Keep the mortgage? Invest? I'm sure the emotions will kick in again and we will pay it off, but who knows. It is nice to live in a house that is paid off. But all I have to do is make any percentage over 0% real to make investing the better option. That seems easy enough until COVID-20 comes along.
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      04-09-2020, 02:57 PM   #36
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Quote:
Originally Posted by Hawkeye View Post
Quote:
Originally Posted by rebekahb View Post
I was doing it because I can go from 4.125% to a credit union of 2.5% and I was going to put down a large chunk of money down at re-fi. I think closing costs will be $3k or under. I'm trying to pay my house off in the next 5 years. Open to reasons on why I shouldn't.
If you are planning on paying off the house within 5 years, unless you are planning on just doing it in a lump sum in 5 years and not over the next 5 years, a refi likely does not make as much sense for you with $3k closing costs.
I pay extra every month so I would be paying it down over the 5 years. I wouldn't do a lump sum payoff in 5 years. I get my bonuses quarterly so I will anticipate paying 1/2 the bonus to mortgage & other half to savings/investing.
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      04-09-2020, 04:30 PM   #37
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You guys keep mentioning "tax writeoff" when it comes to interest. Are you really at a point where the standard deduction is that far behind when itemizing instead?
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      04-09-2020, 04:39 PM   #38
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You guys keep mentioning "tax writeoff" when it comes to interest. Are you really at a point where the standard deduction is that far behind when itemizing instead?
It was a lot better before the SALT cap @ $10k. I could deduct $34k in SALT and $16k in mortgage interest. That was good. Once the SLAT cap hit, I was stuck with $10k SALT and $16k mortgage. So in reality, the first $14.5k of mortgage interest is NOT tax deductible. That sucks.

Once 2025 rolls around, the tax cuts go away but the SALT cap stays. Yeah!

Oh well, first world problems.
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      04-09-2020, 04:47 PM   #39
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You guys keep mentioning "tax writeoff" when it comes to interest. Are you really at a point where the standard deduction is that far behind when itemizing instead?
I benefitted from the higher standard deduction and no longer itemize. Helps to live somewhere that has no state income tax. Also, even with mortgages and property taxes on 2 properties and a HELOC I don’t have enough property taxes and interest to exceed the $24K standard deduction.
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      04-09-2020, 04:48 PM   #40
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Is it me or is no one doing a jumbo loan at a decent rate? I've currently got 4% and would love to get in under 3.5% but no one is doing it. Any tips?
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      04-09-2020, 05:04 PM   #41
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Is it me or is no one doing a jumbo loan at a decent rate? I've currently got 4% and would love to get in under 3.5% but no one is doing it. Any tips?
Depends on what you consider jumbo? As I have said with everything else check your local CU (a few of them). As far as I know they do not raise rates for jumbo loans in my area.
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      04-10-2020, 09:55 AM   #42
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I got a VA loan at 3% fixed interest for 30 years with no down payment and no PMI.
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      04-10-2020, 09:58 AM   #43
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I got a VA loan at 3% fixed interest for 30 years with no down payment and no PMI.
What was the VA funding fee? That's equivalent to paying points.
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      04-10-2020, 10:01 AM   #44
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Depends on what you consider jumbo? As I have said with everything else check your local CU (a few of them). As far as I know they do not raise rates for jumbo loans in my area.
I think jumbo refers to any loan above the Fannie Mae / FHLMC limits to purchase the loans, which I believe vary by location.
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