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Mortgage/Loan help

Discussion in 'Stocks, Investments & Finances' started by Voss, Sep 1, 2021.

  1. Sep 2, 2021 at 12:13 PM
    #31
    AZBoatHauler

    AZBoatHauler SSEM#140/ASCM#3/2ndGenNaysayer/BAF140

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    I should have qualified my statement better - I was more speaking to the notion of doing a refi to cash out at the top of the market that will inevitably lead to being 6 figures upside down at some point in the future… you’re absolutely right if your goal is getting the best rate.
     
  2. Sep 2, 2021 at 12:24 PM
    #32
    MadMaxCanon

    MadMaxCanon New Member

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    Too many, but not enough....
    I put down 5% on a 500K house in 2019 and did not have a PMI, but i have 850 credit score. Currently going through a refi for 2.5% from 3.0% because this crazy housing market, my house is now 700K plus in 2 years. This will likely be the last refi I do I think. I wanted slightly lower % but my debt to income is a little heavy with my mountain cabin and the tundy i just got :(
     
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  3. Sep 2, 2021 at 12:25 PM
    #33
    Voss

    Voss [OP] Dust in the wind

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    Cashing out isn’t for everyone but a useful tool for some. I personally try to stay out of debt but with the current inflationary environment, those who saved are being punished while those in debt are being rewarded as inflation erodes away debt.
     
    Last edited: Sep 2, 2021
  4. Sep 2, 2021 at 12:27 PM
    #34
    Voss

    Voss [OP] Dust in the wind

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    If you put only 5% down you paid mortgage insurance in one way or another.
    Your debt wouldn’t affect your rate. Your fico, Equity and type of property is what determines your rate. Getting 2.5% on a 30yr fixed is a great rate!
     
  5. Sep 2, 2021 at 1:03 PM
    #35
    MadMaxCanon

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    Too many, but not enough....
    Thats good to know. I always thought the debt/income ratio played a part in that.
     
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  6. Sep 2, 2021 at 2:37 PM
    #36
    LifeCycle

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    I have a 20 yr conventional loan at 3.125% with maturity date on 2036...does it make sense to refinance to a shorter duration with lower rate and incur the refinance fees as part of the refi loan?
     
  7. Sep 2, 2021 at 2:42 PM
    #37
    Kratos

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    One of the really common mistakes I've seen is someone who refinances a 30 year loan after paying on it for 10 plus years already just to "save" a little each month. They don't realize that most of their payments went to interest and all they are doing is paying all that interest over again.
     
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  8. Sep 2, 2021 at 2:42 PM
    #38
    Voss

    Voss [OP] Dust in the wind

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    Oh my, that is a high rate for a 20yr. Share a little more info and I’ll run the #’s for you. What is your current loan balance?
     
  9. Sep 2, 2021 at 2:53 PM
    #39
    Terndrerrr

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    Thanks for the offer for advice!

    30yr note @3.75% maturing in 2045.
    Balance of $155k.
    Based on comps, I think it’s safe to say I have about $325k-350k in equity in the home if that makes a difference.

    Would you refi?
     
  10. Sep 2, 2021 at 3:16 PM
    #40
    Voss

    Voss [OP] Dust in the wind

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    True for the most part but you’d be surprised to know there are times when it’s the right move. As an example, rates were much higher 10yrs ago so some people may actually pay less interest on a new 30yr loan with a lower rate than they would staying with their higher rate 20yr mortgage. Refinancing reduces the interest you pay on your loan so if the rate difference is big enough and the savings great enough, it’s actually possible to pay off your loan faster by applying the monthly savings to the principal on a 30yr loan than continuing to pay a higher rate 20yr loan.
     
  11. Sep 2, 2021 at 3:19 PM
    #41
    Voss

    Voss [OP] Dust in the wind

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    Depends on the #’s. Sometimes refinancing smaller loan balances doesn’t make sense. What is your current payment? I can run the #’s and let you know.

    Equity definitely helps get a lower rate.
     
  12. Sep 2, 2021 at 5:25 PM
    #42
    Bakershack

    Bakershack Critical of Noncritical Thinkers

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    That's good to know. Do you have any recommendations for someone with >800 credit score?
     
  13. Sep 2, 2021 at 5:29 PM
    #43
    Voss

    Voss [OP] Dust in the wind

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    The best bank for land, construction to permanent loans to my knowledge is US Bank.
     
  14. Sep 2, 2021 at 5:33 PM
    #44
    Bakershack

    Bakershack Critical of Noncritical Thinkers

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    I'll check them out. Thanks!

    I just bought the land a couple of months ago and I do have a loan on it. I have money in the bank and I'm selling my current house so I will be able to get started on construction before going for a loan.
     
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  15. Sep 2, 2021 at 5:49 PM
    #45
    Voss

    Voss [OP] Dust in the wind

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    Something to keep in mind, banks require a lic contractor building the home for their construction loans.
     
  16. Sep 2, 2021 at 6:33 PM
    #46
    Bakershack

    Bakershack Critical of Noncritical Thinkers

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    Well that sucks, but I have a good friend who is one, so it shouldn't be an issue. Thanks for the heads up!
     
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  17. Sep 2, 2021 at 6:35 PM
    #47
    Voss

    Voss [OP] Dust in the wind

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    That will work
     
  18. Sep 2, 2021 at 7:10 PM
    #48
    LifeCycle

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    Loan balance is $214,475.21
     
  19. Sep 2, 2021 at 7:18 PM
    #49
    Voss

    Voss [OP] Dust in the wind

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    If you were to refi into a 15yr term loan you could expect a rate of 2% or lower. Payment would be $1,384.

    A 20yr term loan would have a rate around 2.375% with a payment of $1,126.

    A typical refi cost around $3k. Compare your current payment and see how long it would take to recoup the expense and how much you’ll save over the long term if you plan on staying in your home.
     
    Last edited: Sep 2, 2021
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  20. Sep 2, 2021 at 7:19 PM
    #50
    NWPirate

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    If you can swing a 15yr payment you would save a ton of money on a refi.
     
  21. Sep 2, 2021 at 8:07 PM
    #51
    Terndrerrr

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    PM’d. I’ll get you the other numbers you asked for.
    Yeah, I can do that no sweat. At this point, I’m wondering why I went 30 yr in the first place…
     
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  22. Sep 2, 2021 at 8:14 PM
    #52
    NWPirate

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    Save that money! :fistbump:
    I'm on a 15 yr @2.0, $375k with a $2,650 payment including taxes. I'm hoping to knock it out in 12-13 years, I hate borrowing money.
     
  23. Sep 3, 2021 at 11:07 AM
    #53
    Kimosabe

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    I'm not saying the interest rate isn't great, or not to refinance. I'm not disagreeing with anything you're saying. Only that if you want to bring less money in at closing, set a closing date near the end of the month.
     
  24. Sep 3, 2021 at 11:19 AM
    #54
    Voss

    Voss [OP] Dust in the wind

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    If you close at the end of the month you’ll pay the entire month of interest to the previous loan. If you close at the beginning of the month, you’ll pay days of interest on the new loan. If you haven’t made the previous months payment and close in the beginning of the month, you’ll pay interest on both loans. In the last scenario, you would end up having more money in your pocket even tho you paid more interest at closing because you would be skipping the principal payment on the new loan for the entire month.

    I understand what you’re saying, trying to avoid paying a full months of interest on the new loan but that means you’re paying a full month of interest on the higher rate old loan. The bottom line is what I’m referring to, you are going to pay interest one way or another and if keeping more cash in your pocket is the goal, you are better off closing at the beginning of the month. In essence, a borrower can skip 2 months of mortgage payments if they would like to have extra cash in their pocket by closing at the beginning of the month vs end of month.

    Now if you have a FHA loan, you want to close at the end of the month vs the beginning of the month because FHA will charge a full month of PMI no matter the closing date.
     
  25. Sep 3, 2021 at 11:20 AM
    #55
    Kimosabe

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    Another potential option for some is to check and see if you can recast your mortgage. If you've been paying your mortgage for a while, or made a large principal payment, some banks will recalculate your payment based on the remaining balance and term of the loan. Not all banks offer that.
    **Of course, it depends on your current mortgage; because it might make more sense to refinance.
     
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  26. Sep 3, 2021 at 11:24 AM
    #56
    Voss

    Voss [OP] Dust in the wind

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    This is an option as well but can cost even more than a refi.
     
  27. Sep 3, 2021 at 12:01 PM
    #57
    Kimosabe

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    The bank I use charges $250.
     
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  28. Sep 3, 2021 at 12:05 PM
    #58
    Voss

    Voss [OP] Dust in the wind

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    That’s fantastic!
     
  29. Dec 15, 2021 at 7:07 AM
    #59
    wexttxco

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    Thanks for the offer, will likely reach out early next year:)
     
  30. Dec 15, 2021 at 7:24 AM
    #60
    Taco-Spike

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    Glad I found this.

    I have actually been looking to refinance. Just bought my house a year ago and seems my home value % is above what I owe now. Basing this off of my neighborhood and surrounding area home selling prices. Really want to get rid of my PMI
     
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