Refi

[Dottleshead ★]

I was figuring on selling my house this spring or possibly next.  But the mortgage rates have been dropping since the last time I refinanced, and after the small drop yesterday, I decided to check them out again.  Turns out with my credit score I was able to get a killer rate through Rocket Mortgage (a.k.a. Quicken) that resets my mortgage to 30 years again -- but drops my monthly payment $300 a month.  They also waived my property appraisal fee -- bringing my closing costs to about $3500. That means in 5.66 months, the closing costs on the refinance with the new rate will have paid for itself.  It's a no brainer. 

This means I can put off selling my home until the following year, and if we change our minds, then in July I could still put it on the market and not lose anything really.  Perhaps we hold onto it longer?

Even though I believe this makes a lot of financial sense, it really makes my wife happy.  

[Dottleshead ★]

I subscribe to the 'happy wife is a happy life' philosophy.

[Wilbur ★]

Just now, Dottie said:

I subscribe to the 'happy wife is a happy life' philosophy.

It isn more of a law than a philosophy.   

[maddmaxx ★]

I don't understand.  Saving 300 month for 5+ months is only about half of the new closing costs  of 3500 isn't it?

[Dottleshead ★]

47 minutes ago, maddmaxx said:

I don't understand.  Saving 300 month for 5+ months is only about half of the new closing costs  of 3500 isn't it?

Well if you deduct the house payment for February that I won't pay then you arrive at that figure  It's a bit of a play because the home is resetting to 30 years so I lose on the backend but that house will be sold long before then.

[maddmaxx ★]

8 minutes ago, Dottie said:

Well if you deduct the house payment for February that I won't pay then you arrive at that figure  It's a bit of a play because the home is resetting to 30 years so I lose on the backend but it will be sold long before then.

But when you sell it you will still have to pay off the mortgage with the proceeds won't you.  Sounds like magic money.

[Dottleshead ★]

Also Rocket Mortgage hasn't issued a 10/1 ARM since last March. The closing costs on such would be $10,000.

[Dottleshead ★]

30 minutes ago, maddmaxx said:

But when you sell it you will still have to pay off the mortgage with the proceeds won't you.  Sounds like magic money.

My principal doesn't change. I am refinancing the current loan. The loan value has not and will not go up -- except the $3500 will be added if I decide to roll it into the new loan. But my property value may go up -- and has. And l lose all PMI while my real estate continues to rise. The magic money comes into play with the perceived value of the home or the market. In that sense it is magic money. Just like stocks and bonds. Of course I'm fucked if the real estate goes down. But most folks will be too if that happens or they will be house trapped in an upside down property. 

 

[Prophet Zacharia]

Have mortgage rates dropped again? I bought when low 4 years ago. I can’t imagine they’d be there again? 3.75 15 yrs is where I am.

[MickinMD ★]

1 hour ago, Dottie said:

I was figuring on selling my house this spring or possibly next.  But the mortgage rates have been dropping since the last time I refinanced, and after the small drop yesterday, I decided to check them out again.  Turns out with my credit score I was able to get a killer rate through Rocket Mortgage (a.k.a. Quicken) that resets my mortgage to 30 years again -- but drops my monthly payment $300 a month.  They also waived my property appraisal fee -- bringing my closing costs to about $3500. That means in 5.66 months, the closing costs on the refinance with the new rate will have paid for itself.  It's a no brainer. 

This means I can put off selling my home until the following year, and if we change our minds, then in July I could still put it on the market and not lose anything really.  Perhaps we hold onto it longer?

Even though I believe this makes a lot of financial sense, it really makes my wife happy.  

I refinanced twice, once in the 90's and once in the 00's - each time shortening the remaining years by going from 30-yr to 15-yr to special 4-yr mortgages - and paid it all off in 2007.  Both had small enough closing costs that it was also a no brainer.  The first one was done when Jimmy Rogers on CNBC's "Your Portfolio" said that commodity futures had hit their low and he thought mortgage rates did to. I caught it right at the bottom!  I emailed Jimmy, thanking him for saving me $92,000 in interest. He emailed back, "You're welcome. Don't spend it all in one place."

[Dottleshead ★]

49 minutes ago, Prophet Zacharia said:

Have mortgage rates dropped again? I bought when low 4 years ago. I can’t imagine they’d be there again? 3.75 15 yrs is where I am.

That's the rate I just secured.

[JerrySTL ★]

Do the math on the total cost and not just the monthly payment. You might find out that in the long term it's better to hold on to what you got now. Plus you could have the whole thing paid off well before 30 years. That may be important if you want to retire without a mortgage over your head.

[Dirtyhip]

$3500 is a lot of money that could have went to principal.  If you say it's better and you are happy, then I am happy for you.

Things will be far less stressful on you when you ditch the mortgage entirely. I am a fan of aggressively payin principal in the beginning of a loan, and taking short mortgages.  This helped us pay off a 15 yr in 10.  Our home is cheap tho.  Nothing like the Seatac pricing.

This area is pretty good for retirees.  It's low cost, but Oregon is a pricey place. We know what we have here.

[Dottleshead ★]

Just now, JerrySTL said:

Do the math on the total cost and not just the monthly payment. You might find out that in the long term it's better to hold on to what you got now. Plus you could have the whole thing paid off well before 30 years. That may be important if you want to retire without a mortgage over your head.

I have done the math. I will never pay off that house nor have a desire to do so. It just so happens I am in a dream market. Insane real estate values and LOW interest rates. Plus I just bought a lot of flexibility.

[maddmaxx ★]

Mines paid.  I'm house trapped anyway as equivalent real estate is more expensive where I might want to move, except places I've looked such as Titusville FL

[Dottleshead ★]

5 minutes ago, Dirtyhip said:

$3500 is a lot of money that could have went to principal.  If you say it's better and you are happy, then I am happy for you.

Things will be far less stressful on you when you ditch the mortgage entirely. I am a fan of aggressively payin principal in the beginning of a loan, and taking short mortgages.  This helped us pay off a 15 yr in 10.  Our home is cheap tho.  Nothing like the Seatac pricing.

This area is pretty good for retirees.  It's low cost, but Oregon is a pricey place. We know what we have here.

I don't disagree with any of this logic. Except we have no interest in paying off this house. None. 

[Dirtyhip]

Understood.  

[Dottleshead ★]

13 minutes ago, Dirtyhip said:

Our home is cheap tho.  Nothing like the Seatac pricing.

 

In this market, you have to get creative. Most people can't afford to get in it.

[Dottleshead ★]

@Dirtyhip I still like the idea of moving to your market. But I have to wait. I will be the guy who moves to your area driving up housing prices. In other words, a gawd damn outsider.

[Dirtyhip]

1 hour ago, Dottie said:

@Dirtyhip I still like the idea of moving to your market. But I have to wait. I will be the guy who moves to your area driving up housing prices. In other words, a gawd damn outsider.

We are are all outsiders, within.

[Dottleshead ★]

Well, I got a quick turnaround from Rocket Mortgage.  I'm going through the closing docs now.  Looks like the estimate is about $60 higher than what I was hoping... which makes it a $240 savings vs $300 per month.  It's still a good deal but obviously not 'as good'.  

[Dottleshead ★]

I sign the papers tonight. It turns out this refi isn't going to cost me anything (very little) and I just got a $240 monthly reduction on this new loan. I was thinking @Wilbur could fly out and see me as I can now afford to treat him to an appetizer and one of his favorite restaurants.

[Guest]

What’s a mortgage?

[Dottleshead ★]

Just now, Zackny said:

What’s a mortgage?

A ball and chain really.

[Forum Administrator]

When I refinanced, the payment dropped nearly $400 and we switched to a 15 year mortgage. If things continue the way they are going, It will be paid off in about 4 years.  It's only six years off the original mortgage, but it's getting close.

[MickinMD ★]

On 1/10/2020 at 6:08 PM, Dottles said:

I was figuring on selling my house this spring or possibly next.  But the mortgage rates have been dropping since the last time I refinanced, and after the small drop yesterday, I decided to check them out again.  Turns out with my credit score I was able to get a killer rate through Rocket Mortgage (a.k.a. Quicken) that resets my mortgage to 30 years again -- but drops my monthly payment $300 a month.  They also waived my property appraisal fee -- bringing my closing costs to about $3500. That means in 5.66 months, the closing costs on the refinance with the new rate will have paid for itself.  It's a no brainer. 

This means I can put off selling my home until the following year, and if we change our minds, then in July I could still put it on the market and not lose anything really.  Perhaps we hold onto it longer?

Even though I believe this makes a lot of financial sense, it really makes my wife happy.  

Excellent deal and excellent thinking on your part!

[Dottleshead ★]

Just now, MickinMD said:

Excellent deal and excellent thinking on your part!

I'm really excited. Because I didn't officially refi until early this month, I get almost 2 months of no mortgage. That second free payment pays off a lingering chunk.

[Dottleshead ★]

It's official.