Author Topic: Is your mortgage rate over 4.5%?  (Read 27337 times)

stlbrah

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Re: Is your mortgage rate over 4.5%?
« Reply #50 on: August 28, 2014, 11:00:22 PM »
im at 4.96. I should of refinanced when rates were lower but didn't really know much about it back then.

I may or may not move, I have no idea, so I probably won't refinance. I almost moved just this year to dc. I like adventure so there is no telling what the near future ensues.

This_Is_My_Username

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« Reply #51 on: August 29, 2014, 03:52:45 AM »
i'm at 4.49% variable in Australia, which I think is the best mortgage available at the moment. 

marty998

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Re: Is your mortgage rate over 4.5%?
« Reply #52 on: August 29, 2014, 04:48:18 AM »
i'm at 4.49% variable in Australia, which I think is the best mortgage available at the moment. 

Is that a honeymoon rate and what does it revert to?

boarder42

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Re: Is your mortgage rate over 4.5%?
« Reply #53 on: August 29, 2014, 05:20:10 AM »
Mortgage rates just plummeted today. Nows probably a really good time

This_Is_My_Username

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Re: Is your mortgage rate over 4.5%?
« Reply #54 on: August 29, 2014, 06:03:13 AM »
i'm at 4.49% variable in Australia, which I think is the best mortgage available at the moment. 

Is that a honeymoon rate and what does it revert to?

loans.com - regular rate. 

details here: https://www.loans.com.au/home

the comparison rate is 4.51 because of the $300 setup fee, and $220 house valuation cost.

The current available rate is 4.54 , but I got my loan when the advertised rate was 4.49, and my rate stayed at 4.49.

I'm pretty sure it is the cheapest in australia.

Gone Fishing

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Re: Is your mortgage rate over 4.5%?
« Reply #55 on: August 29, 2014, 07:21:01 AM »
Past primary residence with roommates, currently rented out, future primary residence (long story)
Value: ~$22-25k (guestimate)
Owe: ~$8k
Rate: 5%
Current payment: $390/month P/I + taxes
Original Term: 5 yr
Years Remaining: 2.5
We'll be moving in there in just under a year, and probably staying about two years before moving and renting it out again.

As recommended to the other person with a low balance, you would probably do well to refi into a HELOC or 0% credit card offer as long as you can pay it off within the terms, you'd have to watch out for balance transfer fees on the card though as they could eat all your interest rate savings.
« Last Edit: August 29, 2014, 07:36:40 AM by So Close »

Gone Fishing

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Re: Is your mortgage rate over 4.5%?
« Reply #56 on: August 29, 2014, 07:35:09 AM »

Home Value: About $250,000 according to Zillow (however purchased in 2006 for $320, 000)
Current Mortgage(s) balance(s)  We have 2 because when we purchased we put 10% down , and then a a mortgage for the 80% and one for 10%.  The balances are A: $230114.02 and B: $23240.55
Current Rate A:4.875% and B: 7.917%
Current Payment: A: 1847.77 (includes taxes and insurance) and B: $235
Original Term: 30 years for both
Years Remaining: A:25 years b: 22 years
How long you plan on staying: no intentions of moving

I have tried to refinance, but we are currently barely breaking even.  our house lost a lot of value when the housing bubble crashed.  If we refinance now, they would combine the two mortgages and then we would have to pay PMI.  so far everyone I've spoken to have said it is best that we stay with what we have and work at paying off the smaller mortgage a bit quicker if we can.

Anyone have any ideas?

Sorry, but the best thing to do now is stay the course.  You may be able to roll off a portion of the second with a 0% credit card balance transfer and reduce your rate a little.  For example:

You are paying $500/mo extra on the second.  You get an offer for $7500 card with 3% transfer fee and 0% for 12 months.  You transfer $6000 to the card and pay it off in 12 months.  Don't be fooled into thinking this reduces your rate to 3% though.  The 3% is charged on the entire $6000 upfront, but your average balance over the course of 12 months is only about $3000, so the effective rate is closer to 6%.  A little better than 7.9% though.

Poorman

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Re: Is your mortgage rate over 4.5%?
« Reply #57 on: August 29, 2014, 11:32:52 AM »
Bought my place 6 months ago for $325k, 20% down making a 260k loan. Financed as a 30yr fix @ 4.625%

Just completed a refi to a 10 yr ARM @ 3.375% with 2% rate adjustment every 2 years thereafter, max rate of 8.375%

Really hoping I didnt mess up but running the numbers it seems like given the worst case scenario on the ARM, the ARM would remain a better buy until year 24 and with the closing costs my break even point is month 14.

After living there six months (its my first home) I realized that theres a very low chance I will be here for more than 5-10 years. It is an excellent starter home in an up and coming area of Boston, but I know in the future I will want more land, less city.

Lifes a gamble.

Given that your time frame is less than 10 years, I think you got into the optimal mortgage product.

FYI- Most 10 Yr ARM's have a break even with a 30 Yr Fixed in year 12 or 13, assuming maximum rate increases (and not factoring opportunity cost).

Poorman

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Re: Is your mortgage rate over 4.5%?
« Reply #58 on: August 29, 2014, 11:42:41 AM »

Home Value: About $250,000 according to Zillow (however purchased in 2006 for $320, 000)
Current Mortgage(s) balance(s)  We have 2 because when we purchased we put 10% down , and then a a mortgage for the 80% and one for 10%.  The balances are A: $230114.02 and B: $23240.55
Current Rate A:4.875% and B: 7.917%
Current Payment: A: 1847.77 (includes taxes and insurance) and B: $235
Original Term: 30 years for both
Years Remaining: A:25 years b: 22 years
How long you plan on staying: no intentions of moving

I have tried to refinance, but we are currently barely breaking even.  our house lost a lot of value when the housing bubble crashed.  If we refinance now, they would combine the two mortgages and then we would have to pay PMI.  so far everyone I've spoken to have said it is best that we stay with what we have and work at paying off the smaller mortgage a bit quicker if we can.

Anyone have any ideas?

You might want to consider prioritizing paying off the 2nd over saving and investing.  The reason is if you DON'T itemize your taxes, paying that balance down is a risk-free 7.917% return.  Even if you do itemize, it still might be worthwhile but it depends more on what returns you are expecting from your investments.  If you DO itemize, then the true cost of the interest is likely between 5-6% depending on your situation.

MustachianAccountant

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Re: Is your mortgage rate over 4.5%?
« Reply #59 on: August 29, 2014, 11:50:27 AM »
Home Value: ~$160k
Current Mortgage(s) balance(s): ~$95k
Current Rate: 2.625%
Current Payment: $950 including escrows
Original Term: 15 years (at refinance)
Years Remaining: 13 years
How long you plan on staying: As long as we can!

HAULIN3

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Re: Is your mortgage rate over 4.5%?
« Reply #60 on: August 29, 2014, 11:57:42 AM »
Home Value: ~$270k
Current Mortgage(s) balance(s): ~$158k
Current Rate: 2.75%
Current Payment: $1225
Original Term: 15 years (at refinance)
Years Remaining: 13 years
How long you plan on staying: As long as we can!

dbanta

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Re: Is your mortgage rate over 4.5%?
« Reply #61 on: September 04, 2014, 07:16:13 AM »
Home Value: ~$268k (Zillow estimate)
Current Mortgage(s) balance(s): ~$191k
Current Rate: 4.25%
Current Payment: $1024
Original Term: 30 years
Years Remaining: 27 years
How long you plan on staying: As long as we can

We are considering refinancing to a 15 year mortgage.  Would it be worth it at the current mortgage rates?  I did a quick search on bankrate and it looks like for a 15 year mortgage we might be able to get down to 3.1%.  However, looking at my current bank (Wells Fargo) the best I could do is 3.645%.  Looking at some smaller banks around I could get a 15 Year Fixed Rate - Secondary Market loan for 3.3%, but I don't know what a Secondary Market loan is.

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Re: Is your mortgage rate over 4.5%?
« Reply #62 on: September 04, 2014, 08:45:27 AM »
Home Value: ~$268k (Zillow estimate)
Current Mortgage(s) balance(s): ~$191k
Current Rate: 4.25%
Current Payment: $1024
Original Term: 30 years
Years Remaining: 27 years
How long you plan on staying: As long as we can

We are considering refinancing to a 15 year mortgage.  Would it be worth it at the current mortgage rates?  I did a quick search on bankrate and it looks like for a 15 year mortgage we might be able to get down to 3.1%.  However, looking at my current bank (Wells Fargo) the best I could do is 3.645%.  Looking at some smaller banks around I could get a 15 Year Fixed Rate - Secondary Market loan for 3.3%, but I don't know what a Secondary Market loan is.

By secondary market they probably just mean that they will not retain the loan, instead it will be sold to another servicer.  Should be nothing to worry about, you may even end up back at Wells.  No doubt refinancing to 3.3% will save you money if you stay in your home through the life of the mortgage.  The hard question is if you want to absorb the additional $300 or so a month payment increase.  This will probably come down to personality type.  If you are the type who wants to get rid of debt ASAP, do it.  If you don't mind having long term fixed rate debt because it allows you to invest more now, stick with what you have.   

wtjbatman

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Re: Is your mortgage rate over 4.5%?
« Reply #63 on: September 04, 2014, 08:59:41 AM »
I'm worried that by the time we have our debts paid off and have saved enough for a down payment (current estimate: 2 years) that me and my fiance are going to end up with a much higher interest rate. Pretty sure we already missed our chance for those 3.X% loans, and I'm concerned that by the time we do buy a house we will be looking at rates closer to 5%. Bummer.

yoga mama

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Re: Is your mortgage rate over 4.5%?
« Reply #64 on: September 04, 2014, 09:01:30 AM »
Home Value 750K (Zillow says 788)
Current Mortgage(s) balance(s) 595K
Current Rate 4.5%
Current Payment 3200
Original Term 30 years
Years Remaining 27.5 years
How long you plan on staying forever

This is actually our biggest dilemma as we pursue FI... Planning to aggressively pay down over next 15-18 mos to get below 417K so we can refi at a non-jumbo rate.  At that time we will get into a 5/1 ARM.  The dilemma is that I have 250K in student loans with rates from 2-2.875%.  The mortgage interest is tax deductible where the SL interest is not, however based on some calculations our mortgage interest (after factoring in the tax deduction) is slightly below 3% so it still makes sense to pay down the mortgage.  Especially since we could refi (hopefully) at 3% or below, which would cut our payment in half, allow us to pay down the student loans within 2 years, and then pay off the rest of the mortgage within the following 3 years.  Thoughts?  (Committing 10K per month for at least the next 15 mos to debt repayment, however at that time I will reduce my workload and may only pay 7-8K extra.)

stripey

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Re: Is your mortgage rate over 4.5%?
« Reply #65 on: September 04, 2014, 09:14:43 AM »
i'm at 4.49% variable in Australia, which I think is the best mortgage available at the moment. 

Is that a honeymoon rate and what does it revert to?

loans.com - regular rate. 

details here: https://www.loans.com.au/home

the comparison rate is 4.51 because of the $300 setup fee, and $220 house valuation cost.

The current available rate is 4.54 , but I got my loan when the advertised rate was 4.49, and my rate stayed at 4.49.

I'm pretty sure it is the cheapest in australia.

Thanks for the info!

(Also, @Marty998-- koalas may be able to kill with cuteness, but they can also be vicious. I have a two-inch scar on my arm from a koala bite about seven years ago. Don't think she meant it- she was severely dehydrated, cornered and acting in self-defense... but it got quite badly infected.)

Cheddar Stacker

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Re: Is your mortgage rate over 4.5%?
« Reply #66 on: September 04, 2014, 09:18:00 AM »
@shellio, that's some serious debt load. Based on the details, it's obvious you have the income to back that up, so good for you.

4.5% (net 3%) is a great rate.
2.875% is a great rate.

How would getting a refi at 3% or below cut your payment in half? Is this due to the 5/1 ARM/interest only payment?

If you plan on staying in your home forever I would focus less on paying down these debts and more on investing. I hope you are at least taking advantage of whatever tax advantaged accounts you have available to you. Every year is use it or lose it. Market returns over a 27.5 year mortgage should far exceed your interest carry, particularly at a net 3%.

All that said, your plan is a good one if getting rid of all that debt is your main goal.

yoga mama

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Re: Is your mortgage rate over 4.5%?
« Reply #67 on: September 04, 2014, 09:33:20 AM »
Thanks, Cheddar.  I contribute to a 403b at work, 5%, and my employer matches at 10%.  I also put 3% into a 401K annually, increasing 1% each year.  We are putting $ into Roths as well - there are several layers of old age retirement security being squirreled away.  The ultimate goal is to work 50-60%, possibly even less.  Yes, I know we could almost certainly get better returns by investing, but with almost a million dollars (at least that's where we started) in debt, the idea of being FI is worth more to us than the $ at this point.  If we refi 417K at 3% or less, payment should be in the range of 1700-1800 I believe. 

Gone Fishing

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Re: Is your mortgage rate over 4.5%?
« Reply #68 on: September 04, 2014, 09:34:50 AM »
Home Value 750K (Zillow says 788)
Current Mortgage(s) balance(s) 595K
Current Rate 4.5%
Current Payment 3200
Original Term 30 years
Years Remaining 27.5 years
How long you plan on staying forever

This is actually our biggest dilemma as we pursue FI... Planning to aggressively pay down over next 15-18 mos to get below 417K so we can refi at a non-jumbo rate.  At that time we will get into a 5/1 ARM.  The dilemma is that I have 250K in student loans with rates from 2-2.875%.  The mortgage interest is tax deductible where the SL interest is not, however based on some calculations our mortgage interest (after factoring in the tax deduction) is slightly below 3% so it still makes sense to pay down the mortgage.  Especially since we could refi (hopefully) at 3% or below, which would cut our payment in half, allow us to pay down the student loans within 2 years, and then pay off the rest of the mortgage within the following 3 years.  Thoughts?  (Committing 10K per month for at least the next 15 mos to debt repayment, however at that time I will reduce my workload and may only pay 7-8K extra.)


Is there any chance you can split your existing mortgage into 2 loans, one for $417k at 15 years and one HELOC or 2nd term note at a slightly higher fixed rate or lower floating rate?  This would allow you to go ahead and fix your rate on most of your mortgage while rates are still low.  From there, I would let the $417k ride just making the scheduled P&I payments as it would give you a great inflation hedge. Extra cash could then be directed towards the student loans or the 2nd which ever makes more sense base on the rate. 

Are the student loan rates fixed or variable?

yoga mama

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Re: Is your mortgage rate over 4.5%?
« Reply #69 on: September 04, 2014, 09:44:57 AM »
Quote
Is there any chance you can split your existing mortgage into 2 loans, one for $417k at 15 years and one HELOC or 2nd term note at a slightly higher fixed rate or lower floating rate?  This would allow you to go ahead and fix your rate on most of your mortgage while rates are still low.  From there, I would let the $417k ride just making the scheduled P&I payments as it would give you a great inflation hedge. Extra cash could then be directed towards the student loans or the 2nd which ever makes more sense base on the rate. 

Are the student loan rates fixed or variable?

Hmmmm that's an interesting thought regarding the mortgage... I was feeling stressed about the possibility of rates going up over the next 18 mos and not getting a low rate, even on a 5/1.  I will look into it today!  Thank you!

The student loan rates include 195K @2.875% and 45K variable at 2-2.76%.  Since the 45K has the lowest total balance of any of our debt, I just figured that if rates skyrocket I will redirect extra payments there for a few months and knock it out. 

Villanelle

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Re: Is your mortgage rate over 4.5%?
« Reply #70 on: September 04, 2014, 10:01:33 AM »
I was at 5.125 and unable to re-fi because it is no longer owner occupied.  (We live overseas.)  So we re-fied through the bank of my parents, who are now our mortgage holders, complete with a lien to keep it all official.  Guaranteed returns for them (though they have more money than they need, and then some), my interest stays in the family, and I was able to get a great rate and set my own terms, within reason.  (For example, we went with an 18 year term because that was the sweet spot where I was comfortable with the payments even with a lot of large and unpredictable changes on the horizon.)

Dad didn't quite have the full amount we needed for pay off.  Well, he had it, but not in places he was comfortable liquidating, so we took money from an existing HELOC for the remainder.  That's at 2.6%, IIRC, though it's variable. 


Squirrel away

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Re: Is your mortgage rate over 4.5%?
« Reply #71 on: September 04, 2014, 10:15:50 AM »
Home Value - 200k
Current Mortgage - under 70k
Current Rate - 1.6% we were on around 4% but the "deal" with the mortgage company ran out so we dropped to a tiny interest rate
Current Payment - 600 a month, we could pay less actually
Original Term - 25 years
Years Remaining - 12 years
How long you plan on staying - until early retirement so 10 years, or less, hopefully!:)

Gone Fishing

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Re: Is your mortgage rate over 4.5%?
« Reply #72 on: September 04, 2014, 11:10:44 AM »
The student loan rates include 195K @2.875% and 45K variable at 2-2.76%.  Since the 45K has the lowest total balance of any of our debt, I just figured that if rates skyrocket I will redirect extra payments there for a few months and knock it out.

Listen to Cheddar, with those type of rates, it is hard to justify prepaying the debt to the extent you don't fully utilize your tax deferred accounts, even though you have a lot of it.  With the type of cash flow you are talking about, you are probably in a very high tax bracket.  I would at least max out the pre-tax accounts available to you before prepaying any debt, especially since you are planning to cut back in a few years.  You should still have plenty leftover to attack debt with, probably more than you think, given the tax implications.   

Gone Fishing

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Re: Is your mortgage rate over 4.5%?
« Reply #73 on: September 04, 2014, 11:26:53 AM »
Home Value - 200k
Current Mortgage - under 70k
Current Rate - 1.6% we were on around 4% but the "deal" with the mortgage company ran out so we dropped to a tiny interest rate
Current Payment - 600 a month, we could pay less actually
Original Term - 25 years
Years Remaining - 12 years
How long you plan on staying - until early retirement so 10 years, or less, hopefully!:)

I'm sure things are a bit different under the Union Jack, but I am assuming you had some type of adjustable rate mortgage and the floating rate actually turned out to be lower than the initial fixed rate which is great, the only problem being that rates could go up on you and fixing your rate now would result in a higher rate.  If it were me, given the mortage balance, I'd probably just use any extra funds to build up the 'stache, if rates start climbing, you could then pay the mortgage down/off with the extra 'stached funds rather than refinancing into a higher rate.     

yoga mama

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Re: Is your mortgage rate over 4.5%?
« Reply #74 on: September 04, 2014, 11:44:45 AM »
The student loan rates include 195K @2.875% and 45K variable at 2-2.76%.  Since the 45K has the lowest total balance of any of our debt, I just figured that if rates skyrocket I will redirect extra payments there for a few months and knock it out.

Listen to Cheddar, with those type of rates, it is hard to justify prepaying the debt to the extent you don't fully utilize your tax deferred accounts, even though you have a lot of it.  With the type of cash flow you are talking about, you are probably in a very high tax bracket.  I would at least max out the pre-tax accounts available to you before prepaying any debt, especially since you are planning to cut back in a few years.  You should still have plenty leftover to attack debt with, probably more than you think, given the tax implications.

Thanks so much for your feedback - so glad I happened to open this post today, I am working on a refi at 15 years fixed with a HELOC to top it off, I am so grateful! 

How can I find out if I am maximizing my pretax deductions?  Would I talk to an accountant?  We have reached out to financial planners through a couple of different sources but they just want to sell us stuff.  You and Cheddar make a valid point.  It is hard to get past the emotional component of paying off those loans but I want to work on the best future for my family.  Undergrad + grad school + med school + poor decisions have taken a toll on my net worth but I am very fortunate to be in a career that is both enjoyable and lucrative so I luckily have options.

Squirrel away

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Re: Is your mortgage rate over 4.5%?
« Reply #75 on: September 04, 2014, 11:45:33 AM »
Home Value - 200k
Current Mortgage - under 70k
Current Rate - 1.6% we were on around 4% but the "deal" with the mortgage company ran out so we dropped to a tiny interest rate
Current Payment - 600 a month, we could pay less actually
Original Term - 25 years
Years Remaining - 12 years
How long you plan on staying - until early retirement so 10 years, or less, hopefully!:)

I'm sure things are a bit different under the Union Jack, but I am assuming you had some type of adjustable rate mortgage and the floating rate actually turned out to be lower than the initial fixed rate which is great, the only problem being that rates could go up on you and fixing your rate now would result in a higher rate.  If it were me, given the mortage balance, I'd probably just use any extra funds to build up the 'stache, if rates start climbing, you could then pay the mortgage down/off with the extra 'stached funds rather than refinancing into a higher rate.     

Yes, that is exactly what we are doing. :) I can understand how people want to pay off their mortgage early but I'm restraining myself. The media keeps running scare stories and Mark Carney (The banking version of George Clooney apparently!) keeps making noise about interest rate rises but I can't see it happening anytime soon. I'm hoping interest rates rise once our mortgage is paid off haha.

Cheddar Stacker

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Re: Is your mortgage rate over 4.5%?
« Reply #76 on: September 04, 2014, 12:00:20 PM »
The student loan rates include 195K @2.875% and 45K variable at 2-2.76%.  Since the 45K has the lowest total balance of any of our debt, I just figured that if rates skyrocket I will redirect extra payments there for a few months and knock it out.

Listen to Cheddar, with those type of rates, it is hard to justify prepaying the debt to the extent you don't fully utilize your tax deferred accounts, even though you have a lot of it.  With the type of cash flow you are talking about, you are probably in a very high tax bracket.  I would at least max out the pre-tax accounts available to you before prepaying any debt, especially since you are planning to cut back in a few years.  You should still have plenty leftover to attack debt with, probably more than you think, given the tax implications.

Thanks so much for your feedback - so glad I happened to open this post today, I am working on a refi at 15 years fixed with a HELOC to top it off, I am so grateful! 

How can I find out if I am maximizing my pretax deductions?  Would I talk to an accountant?  We have reached out to financial planners through a couple of different sources but they just want to sell us stuff.  You and Cheddar make a valid point.  It is hard to get past the emotional component of paying off those loans but I want to work on the best future for my family.  Undergrad + grad school + med school + poor decisions have taken a toll on my net worth but I am very fortunate to be in a career that is both enjoyable and lucrative so I luckily have options.

If you haven't found this website yet, take a look. Written by a doctor for doctors. We'd love to have you stick around here as well, but it might be more specific to your exact situation.
http://whitecoatinvestor.com/

Pretax deductions (BTW, I'm an accountant and there are many of us on this forum) are things like the following:
401K $17,500 limit (This is per employee, so you can both do one if you both work. If you own a practice the limits can be much higher).
HSA $6,350 family limit (I think, if not it's close).
Medical/Dental insurance
Then this is not pre-tax via your paycheck, but a tax deduction on your return:
Traditional IRA $5,500 limit (income threshold is ~$100K, so you would have to do a Roth IRA, or maybe a backdoor Roth IRA)

Here's so more reading on debt payoff vs. investing if you're interested:
http://forum.mrmoneymustache.com/ask-a-mustachian/let's-settle-this-with-a-vote-invest-or-payoff-debts/
http://forum.mrmoneymustache.com/investor-alley/paying-off-mortgage-early-how-bad-is-it-for-your-fi-date/

dragoncar

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Re: Is your mortgage rate over 4.5%?
« Reply #77 on: September 05, 2014, 11:10:30 AM »
The student loan rates include 195K @2.875% and 45K variable at 2-2.76%.  Since the 45K has the lowest total balance of any of our debt, I just figured that if rates skyrocket I will redirect extra payments there for a few months and knock it out.

Listen to Cheddar, with those type of rates, it is hard to justify prepaying the debt to the extent you don't fully utilize your tax deferred accounts, even though you have a lot of it.  With the type of cash flow you are talking about, you are probably in a very high tax bracket.  I would at least max out the pre-tax accounts available to you before prepaying any debt, especially since you are planning to cut back in a few years.  You should still have plenty leftover to attack debt with, probably more than you think, given the tax implications.

Thanks so much for your feedback - so glad I happened to open this post today, I am working on a refi at 15 years fixed with a HELOC to top it off, I am so grateful! 

How can I find out if I am maximizing my pretax deductions?  Would I talk to an accountant?  We have reached out to financial planners through a couple of different sources but they just want to sell us stuff.  You and Cheddar make a valid point.  It is hard to get past the emotional component of paying off those loans but I want to work on the best future for my family.  Undergrad + grad school + med school + poor decisions have taken a toll on my net worth but I am very fortunate to be in a career that is both enjoyable and lucrative so I luckily have options.

If you haven't found this website yet, take a look. Written by a doctor for doctors. We'd love to have you stick around here as well, but it might be more specific to your exact situation.
http://whitecoatinvestor.com/

Pretax deductions (BTW, I'm an accountant and there are many of us on this forum) are things like the following:
401K $17,500 limit (This is per employee, so you can both do one if you both work. If you own a practice the limits can be much higher).
HSA $6,350 family limit (I think, if not it's close).
Medical/Dental insurance
Then this is not pre-tax via your paycheck, but a tax deduction on your return:
Traditional IRA $5,500 limit (income threshold is ~$100K, so you would have to do a Roth IRA, or maybe a backdoor Roth IRA)

Here's so more reading on debt payoff vs. investing if you're interested:
http://forum.mrmoneymustache.com/ask-a-mustachian/let's-settle-this-with-a-vote-invest-or-payoff-debts/
http://forum.mrmoneymustache.com/investor-alley/paying-off-mortgage-early-how-bad-is-it-for-your-fi-date/

Yep, I also would not pay down either loan given your tax bracket.  I just got a jumbo loan and the rate was less than a conventional rate.  Some lenders really want these on their books right now, so maybe look into refinancing the full amount right now, without paying it down.  Still, the rate is good at a high tax bracket.

NinetyFour

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Re: Is your mortgage rate over 4.5%?
« Reply #78 on: September 05, 2014, 11:19:52 AM »

Home Value:  $300,000 for sure, or $315,000 is I were to believe Zillow
Current Mortgage(s) balance(s):  $209,000
Current Rate:  4.375%
Current Payment:  $1300, including insurance and property tax
Original Term:  30 yrs
Years Remaining:  29 years
How long you plan on staying:  5 - 10 years?

I just recently refinanced.  Couldn't get a lower rate, because it is considered an investment property.  (I rent out the "main" house and live in my Accessory Dwelling Unit).

I am going to throw some extra cash at the mortgage in the next few months, because I want to see the balance begin with the number 1 instead of the number 2 by the end of the year--purely for psychological reasons.  Other than that, I am not in a big hurry to pay it down--I would rather max out my 401K.

Petunia 100

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Re: Is your mortgage rate over 4.5%?
« Reply #79 on: September 05, 2014, 03:55:51 PM »

Home Value: About $250,000 according to Zillow (however purchased in 2006 for $320, 000)
Current Mortgage(s) balance(s)  We have 2 because when we purchased we put 10% down , and then a a mortgage for the 80% and one for 10%.  The balances are A: $230114.02 and B: $23240.55
Current Rate A:4.875% and B: 7.917%
Current Payment: A: 1847.77 (includes taxes and insurance) and B: $235
Original Term: 30 years for both
Years Remaining: A:25 years b: 22 years
How long you plan on staying: no intentions of moving

I have tried to refinance, but we are currently barely breaking even.  our house lost a lot of value when the housing bubble crashed.  If we refinance now, they would combine the two mortgages and then we would have to pay PMI.  so far everyone I've spoken to have said it is best that we stay with what we have and work at paying off the smaller mortgage a bit quicker if we can.

Anyone have any ideas?

Sorry, but the best thing to do now is stay the course.  You may be able to roll off a portion of the second with a 0% credit card balance transfer and reduce your rate a little.  For example:

You are paying $500/mo extra on the second.  You get an offer for $7500 card with 3% transfer fee and 0% for 12 months.  You transfer $6000 to the card and pay it off in 12 months.  Don't be fooled into thinking this reduces your rate to 3% though.  The 3% is charged on the entire $6000 upfront, but your average balance over the course of 12 months is only about $3000, so the effective rate is closer to 6%.  A little better than 7.9% though.

Chase Slate is currently offering 0% for 15 months with no balance transfer fees.

https://creditcards.chase.com/credit-cards/slate.aspx

Pigeon

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Re: Is your mortgage rate over 4.5%?
« Reply #80 on: September 06, 2014, 05:46:25 AM »
Home value.                               $280,000
Current Mortgage(s) balance(s).   $54,140
Current Rate.                               5.0
Current Payment.                      $1140 (462 Principal, 225 interest, 452 taxes)
Original Term.                            15 years
Years Remaining                         8.5
How long you plan on staying.      20

Gone Fishing

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Re: Is your mortgage rate over 4.5%?
« Reply #81 on: September 06, 2014, 09:46:42 AM »
Home value.                               $280,000
Current Mortgage(s) balance(s).   $54,140
Current Rate.                               5.0
Current Payment.                      $1140 (462 Principal, 225 interest, 452 taxes)
Original Term.                            15 years
Years Remaining                         8.5
How long you plan on staying.      20

It would probably be worth a refi if you can find a 10 year mortgage at 3% with closing costs under $2k or so. Or you could look at moving the remaining balance onto a floating rate HELOC (and continue making P&I payments) with very little closing costs if you were willing to pay down the balance in a hurry if rates go up.

marty998

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Re: Is your mortgage rate over 4.5%?
« Reply #82 on: September 07, 2014, 05:22:13 AM »
i'm at 4.49% variable in Australia, which I think is the best mortgage available at the moment. 

Is that a honeymoon rate and what does it revert to?

loans.com - regular rate. 

details here: https://www.loans.com.au/home

the comparison rate is 4.51 because of the $300 setup fee, and $220 house valuation cost.

The current available rate is 4.54 , but I got my loan when the advertised rate was 4.49, and my rate stayed at 4.49.

I'm pretty sure it is the cheapest in australia.

Thanks for the info!

(Also, @Marty998-- koalas may be able to kill with cuteness, but they can also be vicious. I have a two-inch scar on my arm from a koala bite about seven years ago. Don't think she meant it- she was severely dehydrated, cornered and acting in self-defense... but it got quite badly infected.)

I know some people who act like that!

These loans.com.au deals looks very enticing. Even for a big bad bank staff member like me.

TomTX

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Re: Is your mortgage rate over 4.5%?
« Reply #83 on: September 07, 2014, 05:36:12 AM »
Home value.                               $280,000
Current Mortgage(s) balance(s).   $54,140
Current Rate.                               5.0
Current Payment.                      $1140 (462 Principal, 225 interest, 452 taxes)
Original Term.                            15 years
Years Remaining                         8.5
How long you plan on staying.      20

It would probably be worth a refi if you can find a 10 year mortgage at 3% with closing costs under $2k or so. Or you could look at moving the remaining balance onto a floating rate HELOC (and continue making P&I payments) with very little closing costs if you were willing to pay down the balance in a hurry if rates go up.

HEL/HELOC is probably the way to go for a loan that small. Closing costs eat you alive on a formal refi.

Pigeon

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Re: Is your mortgage rate over 4.5%?
« Reply #84 on: September 09, 2014, 06:48:03 AM »
Home value.                               $280,000
Current Mortgage(s) balance(s).   $54,140
Current Rate.                               5.0
Current Payment.                      $1140 (462 Principal, 225 interest, 452 taxes)
Original Term.                            15 years
Years Remaining                         8.5
How long you plan on staying.      20

It would probably be worth a refi if you can find a 10 year mortgage at 3% with closing costs under $2k or so. Or you could look at moving the remaining balance onto a floating rate HELOC (and continue making P&I payments) with very little closing costs if you were willing to pay down the balance in a hurry if rates go up.

HEL/HELOC is probably the way to go for a loan that small. Closing costs eat you alive on a formal refi.

I just looked at my closing costs from the last time we refinanced and they were over $4K with no points.  I also don't want to stretch the term of the loan out longer than what I've got left.  Will banks even do an 8 year loan?

peabody58

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Re: Is your mortgage rate over 4.5%?
« Reply #85 on: September 09, 2014, 08:31:50 AM »
Home Value  (1) $175,000 (2) $182,000 [future retirement home]
Current Mortgage(s) balance(s)  (1) Paid in full  (2) $139,000
Current Rate (1) Was 7.25 before paid off in 2009  (2) 2.25% APR 3/1
Current Payment  (1) Paid off  (2) $535/mt
Original Term (1) 30 yr  (2) 30 yr
Years Remaining  (1) Paid off  (2) 29.5 yrs [will pay off balance before APR rate changes]
How long you plan on staying (1) 1 yr to retirement  (2)  Once retired, till death.

Gone Fishing

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Re: Is your mortgage rate over 4.5%?
« Reply #86 on: September 09, 2014, 11:27:24 AM »
Home value.                               $280,000
Current Mortgage(s) balance(s).   $54,140
Current Rate.                               5.0
Current Payment.                      $1140 (462 Principal, 225 interest, 452 taxes)
Original Term.                            15 years
Years Remaining                         8.5
How long you plan on staying.      20

It would probably be worth a refi if you can find a 10 year mortgage at 3% with closing costs under $2k or so. Or you could look at moving the remaining balance onto a floating rate HELOC (and continue making P&I payments) with very little closing costs if you were willing to pay down the balance in a hurry if rates go up.

HEL/HELOC is probably the way to go for a loan that small. Closing costs eat you alive on a formal refi.

I just looked at my closing costs from the last time we refinanced and they were over $4K with no points.  I also don't want to stretch the term of the loan out longer than what I've got left.  Will banks even do an 8 year loan?

$4k is higher than what mine have been, but it probably varies by state/lender.  A bank may be willing to do a "in house" loan for you at 8 years, but I don't think the rates will be as good as a conventional mortgage, but you never know.   I'd go ahead and tell them what you want and get 4-5 quotes and just see what comes back.  It shouldn't cost anything to shop...

Stlbroke

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Re: Is your mortgage rate over 4.5%?
« Reply #87 on: September 09, 2014, 04:41:29 PM »
Home Value    $185,000
Current Mortgage(s) balance(s)   $176,000
Current Rate   4.6
Current Payment    $1330,
Original Term.   30 years
Years Remaining.  29 years ,6 months
How long you plan on staying.  Im not sure


Hello all this is my first post.  I wanted to share my situation with you because no one that I know agrees with my game plan here so I welcome your advice. I bought this home prematurely with only 5% saved for a down payment.  I want to fix the wrong of not waiting until I had %20 down. I now pay roughly $100 in pmi.   Since I bought it I've spent very little for furnishings.  I few curtains, some new dishes, etc. but no major purchases such as furniture.  My goal right now is to save 25k, I'm over half way there, and refi as soon as possible which should be next spring.  I would then get a 15 year loan hopefully around 3.5%.  This would make my payments less than $100 dollars more a month but I'd save $1000 a month in years 16-30 from having no mortgage.  I would also like to maybe pay extra to pay it off in less time as well. Or should I refi to a 30 year loan, or stick with what I got and invest the 25k. I have very little in 401k right now(that's for my next question in another thread!) I'm 34, and within the next few years I will marry my girlfriend and have kid(s).  Thanks for any advice.  Sorry this is so long maybe I should have done a case study lol.
« Last Edit: September 09, 2014, 04:43:31 PM by Railroader »

Gone Fishing

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Re: Is your mortgage rate over 4.5%?
« Reply #88 on: September 10, 2014, 12:00:38 PM »
Home Value    $185,000
Current Mortgage(s) balance(s)   $176,000
Current Rate   4.6
Current Payment    $1330,
Original Term.   30 years
Years Remaining.  29 years ,6 months
How long you plan on staying.  Im not sure


Hello all this is my first post.  I wanted to share my situation with you because no one that I know agrees with my game plan here so I welcome your advice. I bought this home prematurely with only 5% saved for a down payment.  I want to fix the wrong of not waiting until I had %20 down. I now pay roughly $100 in pmi.   Since I bought it I've spent very little for furnishings.  I few curtains, some new dishes, etc. but no major purchases such as furniture.  My goal right now is to save 25k, I'm over half way there, and refi as soon as possible which should be next spring.  I would then get a 15 year loan hopefully around 3.5%.  This would make my payments less than $100 dollars more a month but I'd save $1000 a month in years 16-30 from having no mortgage.  I would also like to maybe pay extra to pay it off in less time as well. Or should I refi to a 30 year loan, or stick with what I got and invest the 25k. I have very little in 401k right now(that's for my next question in another thread!) I'm 34, and within the next few years I will marry my girlfriend and have kid(s).  Thanks for any advice.  Sorry this is so long maybe I should have done a case study lol.

Call your current lender and see what they would want to get rid of your PMI, lender's rules on this vary greatly.  Think long and hard about how long you might stay in your home, even a range would help, say more than 2 -3 years or less than 2-3 years.  This is one of the biggest factors in determining if it makes sense to refi. What does the GF and future wife think about the house? Do you like your job?  Is it close to work for both of you?  How is the neighborhood?  Is it a place where you would want to raise kids? 

As far as the 15 year vs 30 year goes, this is a little harder to say.  With a 30 year, you are paying more for flexibility.  From your post it sounds like you might still need some flexibility over the next few years!

Poorman

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Re: Is your mortgage rate over 4.5%?
« Reply #89 on: September 10, 2014, 02:14:43 PM »
Home value.                               $280,000
Current Mortgage(s) balance(s).   $54,140
Current Rate.                               5.0
Current Payment.                      $1140 (462 Principal, 225 interest, 452 taxes)
Original Term.                            15 years
Years Remaining                         8.5
How long you plan on staying.      20

It would probably be worth a refi if you can find a 10 year mortgage at 3% with closing costs under $2k or so. Or you could look at moving the remaining balance onto a floating rate HELOC (and continue making P&I payments) with very little closing costs if you were willing to pay down the balance in a hurry if rates go up.

HEL/HELOC is probably the way to go for a loan that small. Closing costs eat you alive on a formal refi.

I just looked at my closing costs from the last time we refinanced and they were over $4K with no points.  I also don't want to stretch the term of the loan out longer than what I've got left.  Will banks even do an 8 year loan?

Quicken Loans offers a "Choose your term" program that goes down to 8 years.  The rate is probably the same as a 10 year mortgage.  I don't know what their fees are like, but if you shop around and get a quote from a competitor with low fees, they will probably negotiate with you.  Try going with a low-cost credit union first and have Quicken match the rate and fees.  That would be my strategy.

Full disclosure:  I work for a competitor.

This_Is_My_Username

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Re: Is your mortgage rate over 4.5%?
« Reply #90 on: September 11, 2014, 05:23:13 AM »
i'm at 4.49% variable in Australia, which I think is the best mortgage available at the moment. 

Is that a honeymoon rate and what does it revert to?

loans.com - regular rate. 

details here: https://www.loans.com.au/home

the comparison rate is 4.51 because of the $300 setup fee, and $220 house valuation cost.

The current available rate is 4.54 , but I got my loan when the advertised rate was 4.49, and my rate stayed at 4.49.

I'm pretty sure it is the cheapest in australia.

Thanks for the info!

(Also, @Marty998-- koalas may be able to kill with cuteness, but they can also be vicious. I have a two-inch scar on my arm from a koala bite about seven years ago. Don't think she meant it- she was severely dehydrated, cornered and acting in self-defense... but it got quite badly infected.)

I know some people who act like that!

These loans.com.au deals looks very enticing. Even for a big bad bank staff member like me.

surely your bank can match it, especially for you?

Stlbroke

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Re: Is your mortgage rate over 4.5%?
« Reply #91 on: September 11, 2014, 02:19:02 PM »
Home Value    $185,000
Current Mortgage(s) balance(s)   $176,000
Current Rate   4.6
Current Payment    $1330,
Original Term.   30 years
Years Remaining.  29 years ,6 months
How long you plan on staying.  Im not sure


Hello all this is my first post.  I wanted to share my situation with you because no one that I know agrees with my game plan here so I welcome your advice. I bought this home prematurely with only 5% saved for a down payment.  I want to fix the wrong of not waiting until I had %20 down. I now pay roughly $100 in pmi.   Since I bought it I've spent very little for furnishings.  I few curtains, some new dishes, etc. but no major purchases such as furniture.  My goal right now is to save 25k, I'm over half way there, and refi as soon as possible which should be next spring.  I would then get a 15 year loan hopefully around 3.5%.  This would make my payments less than $100 dollars more a month but I'd save $1000 a month in years 16-30 from having no mortgage.  I would also like to maybe pay extra to pay it off in less time as well. Or should I refi to a 30 year loan, or stick with what I got and invest the 25k. I have very little in 401k right now(that's for my next question in another thread!) I'm 34, and within the next few years I will marry my girlfriend and have kid(s).  Thanks for any advice.  Sorry this is so long maybe I should have done a case study lol.

Call your current lender and see what they would want to get rid of your PMI, lender's rules on this vary greatly.  Think long and hard about how long you might stay in your home, even a range would help, say more than 2 -3 years or less than 2-3 years.  This is one of the biggest factors in determining if it makes sense to refi. What does the GF and future wife think about the house? Do you like your job?  Is it close to work for both of you?  How is the neighborhood?  Is it a place where you would want to raise kids? 

As far as the 15 year vs 30 year goes, this is a little harder to say.  With a 30 year, you are paying more for flexibility.  From your post it sounds like you might still need some flexibility over the next few years!

Thanks. I will call them soon.  I never even thought about that.

As far as how long we will be here, I think it will be for a long time. We are in a good neighborhood with many good features. But anything can happen and I just want to be prepared and opportunistic.  For example a similar house up the street is listed for $70k more than what I paid for mine.  I know they won't get that, but I'm keeping a close eye just in case.  I would sell in a minute if I knew I could make money already.

yoga mama

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Re: Is your mortgage rate over 4.5%?
« Reply #92 on: October 21, 2014, 10:38:43 AM »
@So Close and @Cheddar Stacker - THANK YOU!  I was learning a lot from reading MMM blog posts but this simple thread has helped me so much.  We close tomorrow on a 3.5%, 10 year conventional refinance with an additional $180K on a HELOC.  That LOC is 4-5% but right after closing we will apply for a HELOC special through US Bank with a 5 month introductory rate of 1.5%.  (They couldn't do concurrent closing so we had to go with another bank's HELOC first.)  Hoping to pay off the HELOC (after introductory rate it adjusts up, starting at 3.9%) in 2 years.  Also - Cheddar, I've seen that site but find this one more useful for the like-minded frugality/lifestyle info.  Thank you.  One more thing - Cheddar, I had no idea this was available but I'm now maxing out contributions for both a 403b and a 457 through my employer, and the employer contributes to a 401a for me.  Thank goodness you got to me before 2014 ended!  I hope you guys are still reading this. 

Cheddar Stacker

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Re: Is your mortgage rate over 4.5%?
« Reply #93 on: October 21, 2014, 10:51:52 AM »
@So Close and @Cheddar Stacker - THANK YOU!  I was learning a lot from reading MMM blog posts but this simple thread has helped me so much.  We close tomorrow on a 3.5%, 10 year conventional refinance with an additional $180K on a HELOC.  That LOC is 4-5% but right after closing we will apply for a HELOC special through US Bank with a 5 month introductory rate of 1.5%.  (They couldn't do concurrent closing so we had to go with another bank's HELOC first.)  Hoping to pay off the HELOC (after introductory rate it adjusts up, starting at 3.9%) in 2 years.  Also - Cheddar, I've seen that site but find this one more useful for the like-minded frugality/lifestyle info.  Thank you.  One more thing - Cheddar, I had no idea this was available but I'm now maxing out contributions for both a 403b and a 457 through my employer, and the employer contributes to a 401a for me.  Thank goodness you got to me before 2014 ended!  I hope you guys are still reading this. 

Glad we could help, and congrats on all the progress. Getting a 403b and a 457 is a great advantage most people don't have available. If you're still up for more reading, this is a good post on that topic from an MMM forum member: http://rootofgood.com/make-six-figure-income-pay-no-tax/. You likely make too much to pull off what they did, but still worth a read for some ideas.

Gone Fishing

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Re: Is your mortgage rate over 4.5%?
« Reply #94 on: October 21, 2014, 11:51:56 AM »
@So Close and @Cheddar Stacker - THANK YOU!  I was learning a lot from reading MMM blog posts but this simple thread has helped me so much.  We close tomorrow on a 3.5%, 10 year conventional refinance with an additional $180K on a HELOC.  That LOC is 4-5% but right after closing we will apply for a HELOC special through US Bank with a 5 month introductory rate of 1.5%.  (They couldn't do concurrent closing so we had to go with another bank's HELOC first.)  Hoping to pay off the HELOC (after introductory rate it adjusts up, starting at 3.9%) in 2 years.  Also - Cheddar, I've seen that site but find this one more useful for the like-minded frugality/lifestyle info.  Thank you.  One more thing - Cheddar, I had no idea this was available but I'm now maxing out contributions for both a 403b and a 457 through my employer, and the employer contributes to a 401a for me.  Thank goodness you got to me before 2014 ended!  I hope you guys are still reading this.

Awesome, glad it worked out!

RWD

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Re: Is your mortgage rate over 4.5%?
« Reply #95 on: October 21, 2014, 08:07:22 PM »
Home Value: $138k - $146k
Current Mortgage(s) balance(s): $143k
Current Rate: 5%
Current Payment: $1,268 ($1,026 principal/interest, $79 PMI/MIP, $113 tax, $50 insurance)
Original Term: 30 years
Years Remaining: 26 years (or 17 more years at current minimum payments since we've paid extra towards principal)
How long you plan on staying: less than 1 year, though that is dependent on my wife finding a job

Gone Fishing

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Re: Is your mortgage rate over 4.5%?
« Reply #96 on: October 22, 2014, 03:02:32 PM »
Home Value: $138k - $146k
Current Mortgage(s) balance(s): $143k
Current Rate: 5%
Current Payment: $1,268 ($1,026 principal/interest, $79 PMI/MIP, $113 tax, $50 insurance)
Original Term: 30 years
Years Remaining: 26 years (or 17 more years at current minimum payments since we've paid extra towards principal)
How long you plan on staying: less than 1 year, though that is dependent on my wife finding a job


Probably not worth it if you plan on moving out in less than a year.  Although if you plan on keeping the house as a rental, it might be worth it, the LTV and PMI is going to be a wildcard though.  If you decide to go this route, feel free to post any quotes you get and we can sift through them.

Goldielocks

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Re: Is your mortgage rate over 4.5%?
« Reply #97 on: October 22, 2014, 03:47:40 PM »
Canada vs USA mortgage differences. A bit OT but with the comments so far, this sorta fits.

On the surface, CDN banks and US banks appear to offer similar products, for kinda similar rates.  Both have fixed and variable, with similar amortization offers, etc...  I was able to get a 2.4% variable recently...

But they are vastly different under the surface.  Here are a few of the quirky differences, just for interest:

USA... Jumbo loans cost more
CDN .. Jumbo loans come with discounts to get your business..  Qualify for more than $500k?  Here is 0.2% discount...thank you for you money..

USA.  Pay MTG fees as points or broker fees upfront
CDN.  MTG is free of fees (most bank fees anyway other than lawyer and appraisal), but the sting you for thousands if you refi outside of their terms, move or break the MTG early.

USA.. Fixed rate makes sense.  Great value in some fixed rate products if you know your needs and shop.
CDN.  5 yr variable, baby.  Breaking a fixed rate before your term, eg 5yr,  costs a lot, breaking a  variable costs 3month interest only. Fixed rate is only for those that need the security, and costs a lot more, especially if more than 5yr term. 

USA.  Tax break on MTG
CDN. Pay it off asap after your max retirement savings is done.(others may differ here). Interest is pure cost like other debts.

USA. Property taxes increase with house prices, if your city goes up, so do your taxes.  Tax percentage is fixed.  1.25% on a high COL area is insane. Yet Realtors and states advertise those areas as  low property tax regions. Huh?
CDN. Cities need to vote in a property tax revenue increase.  If your home goes up the average for your city, then no tax increase.  In an increasing market, the tax percentage automatically adjusts downward.  Unless they vote for budget increases, of course.  A high COL city may actually have lower $property taxes than a small prairie city with snow removal.







MoneyCat

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Re: Is your mortgage rate over 4.5%?
« Reply #98 on: October 22, 2014, 04:00:34 PM »
Our mortgage rate is 2.75%.  We got very lucky because we were able to take advantage of the financial crisis to buy an inexpensive house from motivated sellers and get it at an absolutely rock bottom interest rate.  As you can imagine, we feel rather pleased with ourselves.

RWD

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Re: Is your mortgage rate over 4.5%?
« Reply #99 on: October 22, 2014, 04:01:09 PM »
Home Value: $138k - $146k
Current Mortgage(s) balance(s): $143k
Current Rate: 5%
Current Payment: $1,268 ($1,026 principal/interest, $79 PMI/MIP, $113 tax, $50 insurance)
Original Term: 30 years
Years Remaining: 26 years (or 17 more years at current minimum payments since we've paid extra towards principal)
How long you plan on staying: less than 1 year, though that is dependent on my wife finding a job


Probably not worth it if you plan on moving out in less than a year.  Although if you plan on keeping the house as a rental, it might be worth it, the LTV and PMI is going to be a wildcard though.  If you decide to go this route, feel free to post any quotes you get and we can sift through them.

Thanks. PMI is supposed to go away around August or so next year (paid for 5 years, 78% LTV), assuming I am correct that the LTV criteria for that is based on the initial loan value (~$192k). I've thought about the rental option but similar houses in my neighborhood are renting for only $1.1k/month (+/- $100). We'd also likely need a management company since we'd be moving out of state.