Author Topic: DONT Payoff your Mortgage Club  (Read 385160 times)

SwordGuy

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Re: DONT Payoff your Mortgage Club
« Reply #2150 on: March 16, 2020, 09:51:38 PM »
PenFed is back down to 3.625% today from 4% Friday.  So maybe things will start to head lower again.  Obviously the coronavirus might have an impact on lenders' ability to give out loans, so that's another unknown here.  With all the craziness going on, refinancing isn't at the top of my priority list.  If rates get back to ~3%, I'll start taking a look again.  If we don't get there because the virus quickly stops spreading and the economy is great again, well I'll call that a win :)

I tried to get one of their sub-2.8% rates but didn't contact them quickly enough.  They were swamped and still haven't responded.
So you signed up last Monday when rates were low and still haven't heard back?  Wow, I guess they really are swamped.  Let me know when you hear back.  I'm curious if they offer you a better rate than listed because you applied so long ago when rates were much lower.  Also curious what their closing fees are, if you or anyone else has an idea.  Does anyone know if they do no-cost refinancing for a higher interest rate?  They seem to have some of the lowest rates, but wondering if the closing costs make it a no-go.  Then again, that's only if they respond to you in the first place!!

For now, I'll just use them as a gauge for rates overall, since at least they post it and have some of the lowest rates I've seen. I guess when they get to around 3.25% apply and maybe I'll hit sub 3% by the time they get back to me?  Is mortgage refinance timing as bad as market timing?

I'll be sure to post here when I find out.   In the past closing costs have been minimal.    Sometimes they are waived if the loan remains in effect for 2 or 3 years, but I forget whether that's just HELOCs or included refinancing.

Radagast

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Re: DONT Payoff your Mortgage Club
« Reply #2151 on: March 20, 2020, 10:30:35 PM »
In times like these, I wake up every day thankful that I have $150,000 cash instead of an extra $600 per month.

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #2152 on: March 20, 2020, 11:12:10 PM »
In times like these, I wake up every day thankful that I have $150,000 cash instead of an extra $600 per month.
Amen, Radagast! I started a thread in praise of a big, fat EF, and of course someone posted that they were happy their house was paid off. I refrained from asking if they had done it before or after reaching FI, because I didn't want to derail the thread.

After we sold our last flip project, we couldn't find any deals that made sense, so we're sitting on a huge pile of cash and damn grateful to be in this position. A paid off house is fine, just as long as you have another big pile o'money to draw from in case the shit hits the fan. Unfortunately, some people are so focused fixated on "Killing The Mortgage" that other valuable things, like EFs, get the short shrift.

Mako52

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Re: DONT Payoff your Mortgage Club
« Reply #2153 on: March 21, 2020, 07:51:32 AM »
We refinanced with Loan Depot spring 2019 into a 3.375 10/1 ARM.  The opportunity to refi to a 30yr fixed at 3.375 with a few hundred bucks back to us happened early last month.   Uploaded all the required info immediately, have not heard anything.  I am sure they are completely swamped.

I am REALLY glad we didn't pay off the mortgage in this environment.  People who think having no mortgage will save them fail to account for all the other ongoing cash expenses of life.  Personal property tax is one of our biggest monthly expenses. 

ETA 4/16/20:    We closed on the 30yr 3.25 fixed on 4/13. (same late negotiation got us an extra 1/8)  If you look at historic 30-year mortgages, that's pretty low, especially considering we didn't have out-of-pocket closing costs.  Only a handful of times have 30 years been below 3.5%. http://www.freddiemac.com/pmms/pmms30.html
« Last Edit: April 16, 2020, 07:07:26 AM by Mako52 »

TomTX

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Re: DONT Payoff your Mortgage Club
« Reply #2154 on: March 22, 2020, 09:13:54 AM »
We refinanced with Loan Depot spring 2019 into a 3.375 10/1 ARM.  The opportunity to refi to a 30yr fixed at 3.375 with a few hundred bucks back to us happened early last month.   Uploaded all the required info immediately, have not heard anything.  I am sure they are completely swamped.

I am REALLY glad we didn't pay off the mortgage in this environment.  People who think having no mortgage will save them fail to account for all the other ongoing cash expenses of life.  Personal property tax is one of our biggest monthly expenses.

Cashout?

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #2155 on: March 24, 2020, 06:14:40 AM »
Is it worth re-examining the fundamentals of the DNPYM club now that we're in a bear market?

I could imagine my wife opening up our investment account statements, pointing out that we've lost (on paper) more money than the balance on our mortgage, and me having to explain that actually staying in this much debt to own more of the assets that are sinking is the right course.

Rufus.T.Firefly

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Re: DONT Payoff your Mortgage Club
« Reply #2156 on: March 24, 2020, 06:36:30 AM »
Is it worth re-examining the fundamentals of the DNPYM club now that we're in a bear market?

I could imagine my wife opening up our investment account statements, pointing out that we've lost (on paper) more money than the balance on our mortgage, and me having to explain that actually staying in this much debt to own more of the assets that are sinking is the right course.

If we were paying off our mortgage rapidly, we would have less cash on hand and be in a far more tenuous situation than we are presently. The real risk scenario at this present moment is for those who are cash poor, are laid off and default on their mortgage. The DYPYM method hedges heavily against that risk assuming you've put aside some of your investments into readily accessible accounts. In the worst-case scenario for DYPYM, one would need to sell some of their investments at the bottom and realize a bit of the paper loss to keep the house. But that seems like a small price to pay compared to a default.

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #2157 on: March 24, 2020, 07:36:58 AM »
The acronym is DPOYM. It stands for "Don't Pay Off Your Mortgage". I believe it could have benefited from an "E" for "Early" at the end, but it's a little late for that now.

Simply put, if you fill all of your retirement savings buckets before you choose to kill the mortgage, you will need to earn and invest fewer dollars to reach the goal of FIRE. See: MMM's Shockingly Simple Math post and the Investment Order sticky:

https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/

https://forum.mrmoneymustache.com/investor-alley/investment-order/msg1333153/#msg1333153
(This is the US version. The consideration factors are different if your mortgage interest is not tax deductible.)

Just for fun, check out reply #3 on this thread, by the late, great Boarder42.

https://forum.mrmoneymustache.com/throw-down-the-gauntlet/dont-payoff-your-mortgage-club/


And @Rufus.T.Firefly has got it right. A house will always require payment of taxes, utilities, and upkeep.
In that vein, here's another related discussion:

https://forum.mrmoneymustache.com/share-your-badassity/in-praise-of-big-fat-emergency-funds/

paulkots

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Re: DONT Payoff your Mortgage Club
« Reply #2158 on: March 24, 2020, 07:37:16 AM »
I donít think thatís a fair judgement. I read both threads and see that both groups believe in and have decent EFs. The difference is one group uses the low interest rate to invest while the other pays off the mortgage.

As of know, it seems that we will be in for some hurting for a while. After this panic, the reality of slower business or even worse will set in. 


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Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #2159 on: March 24, 2020, 07:57:05 AM »
I donít think thatís a fair judgement. I read both threads and see that both groups believe in and have decent EFs. The difference is one group uses the low interest rate to invest while the other pays off the mortgage.

As of know, it seems that we will be in for some hurting for a while. After this panic, the reality of slower business or even worse will set in. 

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If you do read both threads, you will know that I'm not against paying off mortgages. You will also know that on the Mortgage Payoff thread, the focus is merely on doing/celebrating it. Discussion about whether it's the most effective way to reach FI is not allowed, hence the formation of the DPOYM thread.

And yes, a shocking number of people "killing the mortgage" do not understand the tradeoff(s) they're making. Putting retirement savings after paying off the mortgage is far less efficient. And MMM is all about efficiency. Killing the mortgage, but not getting your employer's full match? Not maxing out your 401k/Roth/HSA (if eligible)? Don't understand the magic of compound interest? Then you're probably leaving a lot of money on the table. Want to learn more before you make your mortgage payoff decision? You won't find that conversation on the Payoff thread, because it's not allowed.

SwordGuy

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Re: DONT Payoff your Mortgage Club
« Reply #2160 on: March 24, 2020, 08:21:38 AM »
I donít think thatís a fair judgement. I read both threads and see that both groups believe in and have decent EFs. The difference is one group uses the low interest rate to invest while the other pays off the mortgage.

As of know, it seems that we will be in for some hurting for a while. After this panic, the reality of slower business or even worse will set in. 

Sent from my iPhone using Tapatalk
If you do read both threads, you will know that I'm not against paying off mortgages. You will also know that on the Mortgage Payoff thread, the focus is merely on doing/celebrating it. Discussion about whether it's the most effective way to reach FI is not allowed, hence the formation of the DPOYM thread.

And yes, a shocking number of people "killing the mortgage" do not understand the tradeoff(s) they're making. Putting retirement savings after paying off the mortgage is far less efficient. And MMM is all about efficiency. Killing the mortgage, but not getting your employer's full match? Not maxing out your 401k/Roth/HSA (if eligible)? Don't understand the magic of compound interest? Then you're probably leaving a lot of money on the table. Want to learn more before you make your mortgage payoff decision? You won't find that conversation on the Payoff thread, because it's not allowed.

A shocking number of people throwing all available cash into paying off the mortgage early "for safety" don't realize that they don't get the safety UNTIL the mortgage is paid off.    They start basking in that "SAFETY" feeling the moment they start paying it down fast and hard.

Fire2025

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Re: DONT Payoff your Mortgage Club
« Reply #2161 on: March 24, 2020, 08:33:04 AM »
I have never really thought about this before, but I realized it might be interesting to people. I also read both threads, because I live in a house split down the middle of both threads.  Ha Ha!!!

My SO's paid cash for his half of our house.  He was close to FIRE and wanted the extra benefit of a paid off house. 

I'm a late comer to FIRE, and to grown-up jobs, so I used leverage to buy my half of our house.  I could have used everthing I had saved to buy my half of the house, but decided leverage was the better choice for me, because I was still in accumulation. 

Getting my mortgage was an interesting saga because he had no credit history, not bad credit obviously, just none.  That's been fixed. 

Currently we are both not working: SO (FIRE'd) me (laid off), but we both feel financially very secure.

I can easily make my mortgage and living expenses on unemployment and have a fair EF.  But I also have a large amount of assets. 

I get that those assets are down (on paper), but I have been saving for longer than three years, more like a decade, so some of those assets are still up.  I'm still very happy to have those assets instead of a paid off house and no assets.  I understand that doesn't have to be the two choices, but my income is not as large as some people on the site.  I prefer my fixed 30 year mortgage and every extra penny going to the market. 

Leverage for the win, for me.  The other guy, in the house, does things different.

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #2162 on: March 24, 2020, 09:43:00 AM »
Thank you for your candor, @Fire2025

Was this impasse on the handling of the mortgage part of why you have not joined finances with your SO?

Fire2025

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Re: DONT Payoff your Mortgage Club
« Reply #2163 on: March 24, 2020, 10:52:36 AM »
Thank you for your candor, @Fire2025

Was this impasse on the handling of the mortgage part of why you have not joined finances with your SO?

No, separate finances just works for us, we've been together for over 2 decades, so if it's not broken.... 

We got priced out of a rental, we had been in for a very long time.  We ran the numbers and decided to buy into the market somewhat quickly, to avoid the 30% and then 60% rent increases, so we didn't have time to fix the credit issue before we bought.

nereo

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Re: DONT Payoff your Mortgage Club
« Reply #2164 on: March 24, 2020, 11:03:51 AM »
A shocking number of people throwing all available cash into paying off the mortgage early "for safety" don't realize that they don't get the safety UNTIL the mortgage is paid off.    They start basking in that "SAFETY" feeling the moment they start paying it down fast and hard.

i would argue that true "SAFETY" doesn't come for these people until several years after their mortgage has been paid off and they have had a chance to plow the improved cash-flow into more liquid investments.  Even then (as has been hammered home in 40+ pages of this thread) it is exceedingly unlikely that they will ever match those that prioritized tax-advantaged savings over throwing all available resources at a mortgage.

FWIW, I'm not against someone paying down their mortgage - prudently.  There are even circumstances when it can be beneficial (e.g. to improve cash-flow close to retirement when tax-advantaged space is no longer available).  I'm against the emotional reaction to not holding a mortgage, which I think it at best misguided and more likely completely counterproductive.

ETA: Fixed typos and auto-correct mistakes.

« Last Edit: March 24, 2020, 11:46:01 AM by nereo »

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #2165 on: March 24, 2020, 11:24:27 AM »
A shocking number of people throwing all available cash into paying off the mortgage early "for safety" don't realize that they don't get the safety UNTIL the mortgage is paid off.    They start basking in that "SAFETY" feeling the moment they start paying it down fast and hard.

i would argue that true "SAFETY" doesn't come for these people until several years after they mortgage has been paid down and they have had a chance to plow the improved cash-flow into more liquid investments.  Even then (as has been hammered home in 40+ pages of this thread) it is exceedingly unlikely that they will ever match those that prioritized tax-advantaged savings over throwing all available resources at a mortgage.

FWIW, I'm not against someone paying down their mortgage - prudently.  There are even circumstances when it can be beneficial (i.e. to improve cash-flow close to retirement when tax-advantaged space is no longer available).  I'm against the emotional reaction to not holding a mortgage, which I think it at best misguided and more likely completely counterproductive.
Awww, I love you guys! Thanks for staying and sharing the message.

Vapour

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Re: DONT Payoff your Mortgage Club
« Reply #2166 on: March 24, 2020, 08:31:26 PM »
Is it worth re-examining the fundamentals of the DNPYM club now that we're in a bear market?

I could imagine my wife opening up our investment account statements, pointing out that we've lost (on paper) more money than the balance on our mortgage, and me having to explain that actually staying in this much debt to own more of the assets that are sinking is the right course.

I mean, in hindsight, sure I wish I had lump sum paid off my mortgage in January or February 2020.  Then I could have gotten a new mortgage now with lower rates and started investing it while stocks are down.  Or I could have just sold all my stocks and sat on cash until we hit the bottom and bought in again.  But unfortunately, I can't predict the future.  So instead, I based my decisions logically on past data and math.  We all know that past performance is no guarantee of future results.  But the best we can do is make decisions as if it were true.  And sometimes we'll be wrong.  That's life.  If you (generic you) can't handle your investments losing 50% and that would trigger you to sell at the bottom, then yeah, you should probably pay off your mortgage instead.

The fundamentals have not changed.  Now is the absolute worst time to try and change course.  A bear market is the best time to invest instead of paying off your mortgage.  I could still pay off my mortgage with my investment account, but now I'd be locking in those losses.  I have a large EF and investment account to ride out this downturn because I've been investing for the last 8 years, so I'm not worried.  I probably could have hit FIRE in 2 years and now it may take longer.  But that's a risk I was taking being in the stock market.  And I'm more worried about my health and the health of my family and the millions of people affected in terrible ways by this crisis.  I still firmly believe that investing in lieu of paying long-term low fixed rate debts (<4%, 30year) is the best way to achieve wealth in the long-term.  Yeah, it hurts a little right now.  With the entire world seemingly going on lockdown, things might really be different this time.  All my investments might go to 0.  But then I think we all have bigger problems and whether or not I technically own my house is not going to matter.

I also have peace of mind in times like these by living well below my means.  My mortgage is now around 8% of my monthly gross income.  That's due to inflation over the years and raises since I bought my house, along with good timing when I bought.  Freeing up that monthly payment just isn't a priority for me.  If I lose my job, it doesn't take all that much for me to scrape together something to pay my mortgage.  If I had a $2-3k mortgage, I might think differently about it.

Vapour

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Re: DONT Payoff your Mortgage Club
« Reply #2167 on: March 24, 2020, 08:35:39 PM »
Hey @SwordGuy did you ever hear back from PenFed?  Looks like their rates have been getting lower again but they were also over 4% recently as well.  They're really all over the place.  Just curious if it's really taking over 2 weeks for them to get back to people and what kind of rates they're offering to those who applied weeks ago.  Thanks!

SwordGuy

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Re: DONT Payoff your Mortgage Club
« Reply #2168 on: March 24, 2020, 09:11:31 PM »
Hey @SwordGuy did you ever hear back from PenFed?  Looks like their rates have been getting lower again but they were also over 4% recently as well.  They're really all over the place.  Just curious if it's really taking over 2 weeks for them to get back to people and what kind of rates they're offering to those who applied weeks ago.  Thanks!

Haven't heard a damn thing from them.  Tried a couple of times and I just get shunted a queue.

7/1 ARMs still had a great rate on the first 7 years, which is more than I need to pay it off.  :(

Vapour

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Re: DONT Payoff your Mortgage Club
« Reply #2169 on: March 24, 2020, 09:39:04 PM »
Hey @SwordGuy did you ever hear back from PenFed?  Looks like their rates have been getting lower again but they were also over 4% recently as well.  They're really all over the place.  Just curious if it's really taking over 2 weeks for them to get back to people and what kind of rates they're offering to those who applied weeks ago.  Thanks!

Haven't heard a damn thing from them.  Tried a couple of times and I just get shunted a queue.

7/1 ARMs still had a great rate on the first 7 years, which is more than I need to pay it off.  :(
Dang that sucks.  I knew they were busy, but I'd think they'd at least have had time to talk to you by now.   Have you checked with any other lenders?  I wonder if it's just PenFed not answering or if all lenders are just  too busy right now for new applicants.  With the current state of the country, I guess I can understand that things have slowed down, along with the rush of applications before things got so bad.  Hopefully things get better soon on all fronts and mortgage rates stay low.  Thanks for the update.

SwordGuy

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Re: DONT Payoff your Mortgage Club
« Reply #2170 on: March 24, 2020, 09:57:44 PM »
Hey @SwordGuy did you ever hear back from PenFed?  Looks like their rates have been getting lower again but they were also over 4% recently as well.  They're really all over the place.  Just curious if it's really taking over 2 weeks for them to get back to people and what kind of rates they're offering to those who applied weeks ago.  Thanks!

Haven't heard a damn thing from them.  Tried a couple of times and I just get shunted a queue.

7/1 ARMs still had a great rate on the first 7 years, which is more than I need to pay it off.  :(
Dang that sucks.  I knew they were busy, but I'd think they'd at least have had time to talk to you by now.   Have you checked with any other lenders?  I wonder if it's just PenFed not answering or if all lenders are just  too busy right now for new applicants.  With the current state of the country, I guess I can understand that things have slowed down, along with the rush of applications before things got so bad.  Hopefully things get better soon on all fronts and mortgage rates stay low.  Thanks for the update.

Checked with other lenders, didn't seem to have great rates anymore. :(

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #2171 on: March 25, 2020, 12:38:22 PM »
All set to close on the sale of our old house this Friday (barring a catastrophe, and, tbh, this seems like the week a catastrophe could happen).

Proceeds from the house will mostly pay back a margin loan, leaving us at 78% LTV on the new house and no other debt. Current rate 3 7/8. Hoping to be able to refinance and improve that late this year.

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #2172 on: March 25, 2020, 12:57:25 PM »
All set to close on the sale of our old house this Friday (barring a catastrophe, and, tbh, this seems like the week a catastrophe could happen).

Proceeds from the house will mostly pay back a margin loan, leaving us at 78% LTV on the new house and no other debt. Current rate 3 7/8. Hoping to be able to refinance and improve that late this year.
What a rough time to be making a transition. Fingers (and everything else) crossed that it goes through!

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #2173 on: March 26, 2020, 08:12:46 AM »
Update: dropped off signed, notarized, papers at closing office.

Filled out wiring instructions form. God, I hope I got those numbers right.

ender

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Re: DONT Payoff your Mortgage Club
« Reply #2174 on: March 26, 2020, 08:45:53 AM »
Update: dropped off signed, notarized, papers at closing office.

Filled out wiring instructions form. God, I hope I got those numbers right.

lol, I hear ya, I am buying a house tomorrow and just did the wire transfer too xD

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #2175 on: March 26, 2020, 11:11:44 AM »
I'm listening to a podcast about Iran-Contra (called "Fiasco"; it's fabulous), and the host made the claim that the Sultan of Brunei agreed to donate something like $20 million to the Contra cause. Reagan's secretary transposed two digits in the wire transfer, so the money went to the wrong Swiss bank account, and was beyond the reach of Brunei, the US, and the contras forever.

nereo

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Re: DONT Payoff your Mortgage Club
« Reply #2176 on: March 26, 2020, 12:05:28 PM »
I'm listening to a podcast about Iran-Contra (called "Fiasco"; it's fabulous), and the host made the claim that the Sultan of Brunei agreed to donate something like $20 million to the Contra cause. Reagan's secretary transposed two digits in the wire transfer, so the money went to the wrong Swiss bank account, and was beyond the reach of Brunei, the US, and the contras forever.
um... how does this connect to the thread?  I missed the link somewhere...

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Re: DONT Payoff your Mortgage Club
« Reply #2177 on: March 26, 2020, 12:38:02 PM »
Update: dropped off signed, notarized, papers at closing office.

Filled out wiring instructions form. God, I hope I got those numbers right.

lol, I hear ya, I am buying a house tomorrow and just did the wire transfer too xD
I'm listening to a podcast about Iran-Contra (called "Fiasco"; it's fabulous), and the host made the claim that the Sultan of Brunei agreed to donate something like $20 million to the Contra cause. Reagan's secretary transposed two digits in the wire transfer, so the money went to the wrong Swiss bank account, and was beyond the reach of Brunei, the US, and the contras forever.
um... how does this connect to the thread?  I missed the link somewhere...

I mean, it's a little bit of a tangent, but it's nothing to get bent out of shape about.

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #2178 on: March 26, 2020, 12:46:52 PM »
@sherr if you connect several posts of mine, you'll see that I've been super leveraged during a period from October until (hopefully) tomorrow while owning two houses. At our peak, my wife and I were carrying debt of about 320% of our annual income. It's possible our HCOL posters don't think this is extreme, but we are anxious to get back down to one house and simplify our lives and finances, while slowly paying down the remaining mortgage.

Also, my wife works for a major producer of aircraft engines, so--if she loses her job--that % might move the other way.

sherr

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Re: DONT Payoff your Mortgage Club
« Reply #2179 on: March 26, 2020, 12:51:42 PM »
@sherr if you connect several posts of mine, you'll see that I've been super leveraged during a period from October until (hopefully) tomorrow while owning two houses. At our peak, my wife and I were carrying debt of about 320% of our annual income. It's possible our HCOL posters don't think this is extreme, but we are anxious to get back down to one house and simplify our lives and finances, while slowly paying down the remaining mortgage.

Also, my wife works for a major producer of aircraft engines, so--if she loses her job--that % might move the other way.

I know, I was disagreeing with @nereo that this was off topic. The specific tangent about transposed wire transfer numbers was a tangent, but like I said, nothing to get bent out of shape about.

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #2180 on: March 26, 2020, 01:15:49 PM »
I'm listening to a podcast about Iran-Contra (called "Fiasco"; it's fabulous), and the host made the claim that the Sultan of Brunei agreed to donate something like $20 million to the Contra cause. Reagan's secretary transposed two digits in the wire transfer, so the money went to the wrong Swiss bank account, and was beyond the reach of Brunei, the US, and the contras forever.
um... how does this connect to the thread?  I missed the link somewhere...
Despite the explanation below, I didn't get it either, so it's not just nereo.

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Re: DONT Payoff your Mortgage Club
« Reply #2181 on: March 26, 2020, 01:29:30 PM »
Maybe the link is "whatever you do, double-check your figures before you send bitcoin to pay off your mortgage?"

nereo

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Re: DONT Payoff your Mortgage Club
« Reply #2182 on: March 26, 2020, 01:40:06 PM »
@sherr if you connect several posts of mine, you'll see that I've been super leveraged during a period from October until (hopefully) tomorrow while owning two houses. At our peak, my wife and I were carrying debt of about 320% of our annual income. It's possible our HCOL posters don't think this is extreme, but we are anxious to get back down to one house and simplify our lives and finances, while slowly paying down the remaining mortgage.

Also, my wife works for a major producer of aircraft engines, so--if she loses her job--that % might move the other way.

I know, I was disagreeing with @nereo that this was off topic. The specific tangent about transposed wire transfer numbers was a tangent, but like I said, nothing to get bent out of shape about.

I wasnít getting bent out of shape. I just wasnít following the train of thought, and was hoping someone could connect the Dots for me. Didnít seem to be an odd request

I think Iíve got it now - thanks for the PMs.

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #2183 on: March 26, 2020, 01:43:23 PM »
sending Bitcoin to pay off the mortgage would actually be kinda normal compared to other things. Stock market gaining 5% while Bitcoin stays basically the same is kinda disorienting.

dandarc

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Re: DONT Payoff your Mortgage Club
« Reply #2184 on: March 26, 2020, 01:56:19 PM »
sending Bitcoin to pay off the mortgage would actually be kinda normal compared to other things. Stock market gaining 5% while Bitcoin stays basically the same is kinda disorienting.
But if you send it to the wrong wallet, it is gone with no recourse. One of the features of bitcoin is the permanence of the transaction and another one is the anonymity.

sherr

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Re: DONT Payoff your Mortgage Club
« Reply #2185 on: March 26, 2020, 02:09:13 PM »
sending Bitcoin to pay off the mortgage would actually be kinda normal compared to other things. Stock market gaining 5% while Bitcoin stays basically the same is kinda disorienting.
But if you send it to the wrong wallet, it is gone with no recourse. One of the features of bitcoin is the permanence of the transaction and another one is the anonymity.

Right, but no one manually types out the bitcoin wallet address. It's copy-and-pasted, or encoded in a QR code. As opposed to a when I did a wire transfer I had to write down the account / routing number on a piece of paper, double check it, carry it to my banker who manually typed it in, and double-check it again.

I wasnít getting bent out of shape. I just wasnít following the train of thought, and was hoping someone could connect the Dots for me. Didnít seem to be an odd request

Okay, sorry for misinterpreting you.

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #2186 on: March 30, 2020, 12:24:15 PM »
I'm wondering if any of you are planning on taking advantage of the mortgage abeyance plans that are being rolled out? One of our rentals was financed as a second home (the bank insisted on doing it that way, despite full disclosure), so I suppose technically we could, but we have no plans to. All of our tenants are fine, so we expect no interruptions or turnover, plus we have ample reserves. I don't want to start a new thread, so I'm asking our little group, because I know most of you still have mortgages :-)


SwordGuy

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Re: DONT Payoff your Mortgage Club
« Reply #2187 on: March 30, 2020, 12:30:38 PM »
I'm wondering if any of you are planning on taking advantage of the mortgage abeyance plans that are being rolled out? One of our rentals was financed as a second home (the bank insisted on doing it that way, despite full disclosure), so I suppose technically we could, but we have no plans to. All of our tenants are fine, so we expect no interruptions or turnover, plus we have ample reserves. I don't want to start a new thread, so I'm asking our little group, because I know most of you still have mortgages :-)

I believe that keeping one's word when one is (a) able to and (b) it will not impoverish one's family is the right thing to do.  And when it comes to (b), it's the right thing to do what one can to make amends to the other party.

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #2188 on: March 30, 2020, 02:05:06 PM »
I'm wondering if any of you are planning on taking advantage of the mortgage abeyance plans that are being rolled out? One of our rentals was financed as a second home (the bank insisted on doing it that way, despite full disclosure), so I suppose technically we could, but we have no plans to. All of our tenants are fine, so we expect no interruptions or turnover, plus we have ample reserves. I don't want to start a new thread, so I'm asking our little group, because I know most of you still have mortgages :-)

I believe that keeping one's word when one is (a) able to and (b) it will not impoverish one's family is the right thing to do.  And when it comes to (b), it's the right thing to do what one can to make amends to the other party.
I totally agree. In fact, I'm not too happy about the stimulus check that's on its way. Don't need it, don't want it, not even sure what would happen if we didn't cash it...

OTOH, the mortgage abeyance, as I understand it, is not forgiveness, it just lets you push back any missed payments to the end of the mortgage. The drawback would be that you are paying less interest in the current year. If I'm incorrect, please feel free to advise me gently.

I don't think this has anything to do with keeping one's word.

dandarc

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Re: DONT Payoff your Mortgage Club
« Reply #2189 on: March 30, 2020, 02:21:40 PM »
We're donating our stimulus check, and probably more, to some local charities. +1 to "don't need it". Only reason we qualify is I'm good at math and have organized our lives to be very tax-efficient.

couponvan

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Re: DONT Payoff your Mortgage Club
« Reply #2190 on: March 31, 2020, 07:34:41 AM »
We're donating our stimulus check, and probably more, to some local charities. +1 to "don't need it". Only reason we qualify is I'm good at math and have organized our lives to be very tax-efficient.

I have read that the stimulus check is really just and advance on next yearís taxes the way it is written, so donít get too excited when it comes....

nereo

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Re: DONT Payoff your Mortgage Club
« Reply #2191 on: March 31, 2020, 07:36:52 AM »
I'm wondering if any of you are planning on taking advantage of the mortgage abeyance plans that are being rolled out? One of our rentals was financed as a second home (the bank insisted on doing it that way, despite full disclosure), so I suppose technically we could, but we have no plans to. All of our tenants are fine, so we expect no interruptions or turnover, plus we have ample reserves. I don't want to start a new thread, so I'm asking our little group, because I know most of you still have mortgages :-)

I believe that keeping one's word when one is (a) able to and (b) it will not impoverish one's family is the right thing to do.  And when it comes to (b), it's the right thing to do what one can to make amends to the other party.
I totally agree. In fact, I'm not too happy about the stimulus check that's on its way. Don't need it, don't want it, not even sure what would happen if we didn't cash it...

OTOH, the mortgage abeyance, as I understand it, is not forgiveness, it just lets you push back any missed payments to the end of the mortgage. The drawback would be that you are paying less interest in the current year. If I'm incorrect, please feel free to advise me gently.

I don't think this has anything to do with keeping one's word.

It's something we are thinking about, though I don't know what the final details will be.  I'm unexpectedly unemployed, and probably unemployable for the next several months because all colleges and universities (my most likely employers) are shut down through summer.  Spouse is working and we can live on her income, but only by flexing all of our frugality muscles.  We have ample savings but I don't want to deplete that further, particularly when the markets are down. We still havent' sold our previous home and with the local government shut down we really can't at present (long, complicated story).  And in the middle of all this we are waist-deep in remodeling project for the home we are currently living in.
So 3 months abeyance could give us some much needed cash-flow.

dandarc

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Re: DONT Payoff your Mortgage Club
« Reply #2192 on: March 31, 2020, 09:22:32 AM »
We're donating our stimulus check, and probably more, to some local charities. +1 to "don't need it". Only reason we qualify is I'm good at math and have organized our lives to be very tax-efficient.

I have read that the stimulus check is really just and advance on next yearís taxes the way it is written, so donít get too excited when it comes....
I'd say you read incompletely. They created a new refundable tax credit for this - so for the vast majority of people, while what you wrote is technically true, next year's taxes are reduced by the amount of the payment, so at the end of the day the net result is you have $1200 or $2400 or more if you have kids in your pocket.

The tax credit is technically based on 2020 income, but they are paying it out in advance based on your 2019 or 2018 income tax return. If your AGI (important to know exactly what they mean by "income" - in this case AGI) is up to $150K for married filing jointly on 2019 return, they send you the money. If it turns out your 2020 AGI is over that figure, you settle up at tax time.

Actually the mechanism is very similar to ACA premium tax credits - estimate income, pay the credit early, settle up at tax time with actual figures.

https://www.nytimes.com/article/coronavirus-stimulus-package-questions-answers.html

dandarc

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Re: DONT Payoff your Mortgage Club
« Reply #2193 on: March 31, 2020, 09:24:51 AM »
Back on topic - my "power move" from October isn't looking so great right now. Still having $70-100K more liquidity is helpful at calming the nerves, even though I have a <$600 payment that wasn't there before I did that.

TexasRunner

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Re: DONT Payoff your Mortgage Club
« Reply #2194 on: April 02, 2020, 11:19:52 AM »
Small Milestone, just got an email back from the bank:  $181.00 Per Month PMI is now gone!

We are slow-walking the mortgage, but most likely will not ever re-balance into a longer loan (IE if we get a great rate, may rebalance into a time frame of however many months we have left).

Very much enjoying the liquidity we have right now as we haven't paid any extra into the mortgage in several years.  I WOULD be worried about a job loss if I had paid extra into the mortgage but not enough to pay it off completely.

Keep up the good work guys!

(Also, several more boring, minimum payments have been made)...

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #2195 on: April 02, 2020, 11:25:16 AM »
Back on topic - my "power move" from October isn't looking so great right now. Still having $70-100K more liquidity is helpful at calming the nerves, even though I have a <$600 payment that wasn't there before I did that.
Wait! 70,000 divided by 600/month is nearly ten years of mortgage payments, not counting even minimal interest. Where is the problem?
« Last Edit: April 03, 2020, 02:54:25 AM by Dicey »

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #2196 on: April 02, 2020, 11:39:19 AM »
We finally managed to close on the sale of our old home.

112 K in proceeds, but we have almost that much in small loans (that got us through the two mortgage period) to pay off.

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #2197 on: April 02, 2020, 11:47:16 AM »
We finally managed to close on the sale of our old home.

112 K in proceeds, but we have almost that much in small loans (that got us through the two mortgage period) to pay off.
Congratulations to you and to @TexasRunner!

TomTX

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Re: DONT Payoff your Mortgage Club
« Reply #2198 on: April 02, 2020, 02:13:59 PM »
Back on topic - my "power move" from October isn't looking so great right now. Still having $70-100K more liquidity is helpful at calming the nerves, even though I have a <$600 payment that wasn't there before I did that.
Conversely, I'm happy we did our (moderate) cashout refi at the end of November - I locked up the cash for a few months getting $1,300 in signup bonuses from Chase and never got around to investing it. Mortgage is back out to a 30 year term, total costs were under $50 IIRC, monthly payment dropped from >$900 to <$600.
« Last Edit: April 02, 2020, 02:22:26 PM by TomTX »

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #2199 on: April 07, 2020, 09:21:33 AM »
Despite the two house overlap. we got a 30-year fixed mortgage at 3.88%, no PMI or anything, so we don't have to manage any active banking steps right now. Our house is more than ample for the additional use it's getting now, but not so burdensome that I'm worried about keeping up the payments for it if my wife loses her (aerospace) job.

It's possible that later in 2020 we'll have the opportunity to refinance and lower that rate.