Author Topic: Buying a house, locked in a bitchin (badass) mortgage rate.  (Read 912 times)

bigalsmith101

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Buying a house, locked in a bitchin (badass) mortgage rate.
« on: September 10, 2017, 08:40:14 PM »
Wifey and I are buying a house, and we're quite excited about it.

In the process, I contacted most of my friends and asked for recommendations for a mortgage broker. We've shopped around for a mortgage, and had a bunch of good recommendations.

We brought a pretty good package to the table. Dual income, no outstanding debt, and high credit scores. All thanks to the Mustachian lifestyle.

We came in with 10% down payment, and initially we were quoted 3.875%, 30yr fixed with a PMI payment of $101/mo, or 4.05% 30yr fixed with lender paid PMI.

Then, we came upon a better rate, and locked in a 3.625% 30yr fixed mortgage, with the same PMI.

The difference between 3.625% and 4.00% is roughly $87.00/mo at our loan value, and thus paying the PMI made sense, as the difference between the loans is $14 after paying the PMI. Especially considering the rate is locked for 30yrs.

One new thing that I learned, is that Mortgage Insurance rates vary based on credit worthiness, and is calculated based on several different factors. Our PMI of $101/mo is considerably less than all of my friends rates.

Having looked around, and done my research, I had convinced myself that 3.85-4.00 was the best rate I'd get at this point. I thought 3.875% was a good rate, and I think 3.625% is a damn good rate!

We had the option to go in at 20% down, and eliminate the PMI, but it makes no sense when the cost of the PMI is a 2.69% return on our money.

Pretty stoked!






« Last Edit: September 11, 2017, 04:22:24 PM by bigalsmith101 »
I spent the first 6 years of "real" life in a self imposed semi retirement, to secure a lifetime of stories. Now it's time to secure the next lifetime through the badassity of FI.

"I achieved such a high level of badassity I just don't realize how normal people miss the whole process." --Le Barbu

SimpleSpartan

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Re: Buying a house, locked in a bitchin mortgage rate.
« Reply #1 on: September 11, 2017, 02:46:08 PM »
Wow I read that as "bitcoin" mortgage rate and was a bit disappointed lol. Nonetheless that is a great rate! Props on keeping up the credit, that will save you thousands.

bigalsmith101

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Re: Buying a house, locked in a bitchin mortgage rate.
« Reply #2 on: September 11, 2017, 02:48:05 PM »
Wow I read that as "bitcoin" mortgage rate and was a bit disappointed lol. Nonetheless that is a great rate! Props on keeping up the credit, that will save you thousands.

Hahahaha. No no. I'm not dabbling in bitcoin. That's pretty funny.

As far as the mortgage rate goes, I'm quite pleased with it!
I spent the first 6 years of "real" life in a self imposed semi retirement, to secure a lifetime of stories. Now it's time to secure the next lifetime through the badassity of FI.

"I achieved such a high level of badassity I just don't realize how normal people miss the whole process." --Le Barbu

soccerluvof4

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Re: Buying a house, locked in a bitchin mortgage rate.
« Reply #3 on: September 11, 2017, 02:53:08 PM »
Devils advocate...kinda. If good duel incomes, why not more down, no PMI and even a better rate?
" In life you don't get what you deserve you get what you negotiate"

bigalsmith101

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Re: Buying a house, locked in a bitchin mortgage rate.
« Reply #4 on: September 11, 2017, 03:05:19 PM »
Devils advocate...kinda. If good duel incomes, why not more down, no PMI and even a better rate?

I like this.

To get an even better rate, say 3.5% or 3.375%, would have required at least a 20% down payment.

At 20% down, and no PMI:
A rate of 3.5% would have saved us $129/mo, or $1,548/yr.
A rate of 3.375% would have saved $157/mo, or $1,884/yr.

10% down, for us, represents $45k:
Investing $45k for a net annual return of $1,558 is a return of 3.44%, a return of $1,884 yields 4.186%

Neither of those options made sense in my mind. I'll only pay the PMI for the first 6.5yrs (79mo). I believe strongly that I can get more for my money elsewhere.
I spent the first 6 years of "real" life in a self imposed semi retirement, to secure a lifetime of stories. Now it's time to secure the next lifetime through the badassity of FI.

"I achieved such a high level of badassity I just don't realize how normal people miss the whole process." --Le Barbu

solon

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Re: Buying a house, locked in a bitchin mortgage rate.
« Reply #5 on: September 11, 2017, 03:47:34 PM »
I definitely thought bitchin was a new crypto-currency.

There are so many coming out all the time. How do we know it's NOT a new crypto-currency?

bigalsmith101

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Re: Buying a house, locked in a bitchin mortgage rate.
« Reply #6 on: September 11, 2017, 03:49:28 PM »
I definitely thought bitchin was a new crypto-currency.

There are so many coming out all the time. How do we know it's NOT a new crypto-currency?

Good question... I have no idea.
I spent the first 6 years of "real" life in a self imposed semi retirement, to secure a lifetime of stories. Now it's time to secure the next lifetime through the badassity of FI.

"I achieved such a high level of badassity I just don't realize how normal people miss the whole process." --Le Barbu

SimpleSpartan

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Re: Buying a house, locked in a bitchin (badass) mortgage rate.
« Reply #7 on: September 11, 2017, 04:57:41 PM »
Just noticed your from Lake Stevens. Got my first speeding ticket in snohomish county while I was hiking in granite falls couple weeks back. Pretty annoyed lol, have to admit kind of felt it coming as I  saw a cop every couple miles.

bigalsmith101

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Re: Buying a house, locked in a bitchin (badass) mortgage rate.
« Reply #8 on: September 11, 2017, 05:14:53 PM »
Just noticed your from Lake Stevens. Got my first speeding ticket in snohomish county while I was hiking in granite falls couple weeks back. Pretty annoyed lol, have to admit kind of felt it coming as I  saw a cop every couple miles.

I am from Lake Stevens. Have you already paid the ticket? My wife works for a brilliant traffic attorney. $200, and high odds that your ticket will be dropped, aka no impact on your insurance.

But when you see it coming, tis the way it goes!
I spent the first 6 years of "real" life in a self imposed semi retirement, to secure a lifetime of stories. Now it's time to secure the next lifetime through the badassity of FI.

"I achieved such a high level of badassity I just don't realize how normal people miss the whole process." --Le Barbu

SimpleSpartan

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Re: Buying a house, locked in a bitchin (badass) mortgage rate.
« Reply #9 on: September 11, 2017, 10:23:26 PM »
Just noticed your from Lake Stevens. Got my first speeding ticket in snohomish county while I was hiking in granite falls couple weeks back. Pretty annoyed lol, have to admit kind of felt it coming as I  saw a cop every couple miles.

I am from Lake Stevens. Have you already paid the ticket? My wife works for a brilliant traffic attorney. $200, and high odds that your ticket will be dropped, aka no impact on your insurance.

But when you see it coming, tis the way it goes!

I just mailed it in a couple days ago :(
Oh well, such is life. Appreciate the suggestion though!