Author Topic: DONT Payoff your Mortgage Club  (Read 540800 times)

Raenia

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Re: DONT Payoff your Mortgage Club
« Reply #2750 on: July 06, 2021, 09:30:36 AM »
August 1 will be my last mortgage payment.  Because I知 selling and renting.  I don稚 think the mortgage people would congratulate me.  I知 moving out by Dicey.  I知 not real thrilled with the options in my price range that would tie up so much equity and still have a big mortgage so I値l rent, then I can spend the dividends from my old house equity on fun stuff (or not and grow it).

Recently got into the same boat as you, formerly-something. I知 a bit bitter at not being able to find a sane place for us to buy and hold these ridiculously, stupid-low fixed mortgages through term.  But that痴 FWP I suppose.

Do we need our own club? I'm in the same situation as well.  Recently moved to a rental and preparing to sell our house.  I'm very disappointed not to be able to hold that mortgage longer, but since we're not expecting to get anything out from the sale, we won't have anywhere near the downpayment required for how hot the market is right now, without digging into our investments more deeply than I'm comfortable with.  Will try again in a few years, hopefully the market will stabilize.

Fomerly known as something

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Re: DONT Payoff your Mortgage Club
« Reply #2751 on: July 06, 2021, 03:08:54 PM »
I imagine you have family or other motivations for moving where you are?

There are a lot of factors but the main one is I知 4 years from my federal pension, I知 moving to a place that 屠ust sounds like fun since I hit my number outside of the pension and I can afford it.

dragoncar

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Re: DONT Payoff your Mortgage Club
« Reply #2752 on: July 06, 2021, 05:28:20 PM »
Flagstar approved our escrow waiver so looking forward to my large check.  They haven稚 paid the insurance yet (due in three days) so I知 pretty sure this is an absolute win

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #2753 on: July 07, 2021, 06:31:31 AM »
Taxable investment account statement came in the mail, and it is more than our mortgage balance! Our cash flow is plenty for the size of our payments even now, so we're not going to start using withdrawals to support the payments. We use them to support contributions to my wife's Roth IRA, actually.


Kevin Aster Tin Obin

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Re: DONT Payoff your Mortgage Club
« Reply #2754 on: July 15, 2021, 02:10:06 PM »
and... done..  don't pay off your mortgage, so I cash-out refi'd a rental property.  Now what to do with the lump of cash that I paid 2.99% to borrow for 30 years?  I really want to feel ok by getting >3% ROI..  put half in VTI and half in REIT?  Or throw it all on black at the casino?   Looking to buy another rental property now that I have 3x down payments, but hard to find a deal..  CDs are junk.. I'm feeling the cash drag of selling a house and now adding a cash out refi..


dandarc

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Re: DONT Payoff your Mortgage Club
« Reply #2755 on: July 15, 2021, 02:40:15 PM »
You did this without having a plan for investing the proceeds first?

Kevin Aster Tin Obin

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Re: DONT Payoff your Mortgage Club
« Reply #2756 on: July 15, 2021, 02:58:32 PM »
You did this without having a plan for investing the proceeds first?
Have plan to invest it according to AA but hard to pull the trigger with lump sum... I've read all the books and know to just do it, but..


FIREandMONEY

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Re: DONT Payoff your Mortgage Club
« Reply #2757 on: July 15, 2021, 03:15:12 PM »
Hey All.

It was recommended in a different thread that I post my question over here.

Long story short, I currently have a 30 year @ 3.25% with 189K left. The mortgage started in 2016 and I have made a few extra payments to principal (mainly to get rid of PMI ASAP) and currently have 21 years left on the mortgage.  I just did what I read on the old MMM blog and have basically been putting any extra windfalls like Xmas bonuses directly to principal.  I think now that I have PMI done, I will stop making any extra bonus payments.  My P&I payments are $1,024/month and I have 21 years left.

My lender came to me and offered a 20 year @ 2.75% with $3500 in closing costs. The refi'd P&I payments were $1,025/month. I ran the numbers through an amortization spreadsheet and it showed I would pay $12.5K less interest at the end of the loans with the refi.

When I stick $3500 in a compound interest calculator @ 7% over 20 years, I come up with $13.5K.  Am I thinking of this right?  Realistically, I view the 13 or 12K whatever as a wash over twenty years.  So basically, I shouldn't even bother wasting my time refinancing a a half point with $3500 closing costs right?

For fun, I went and got a quote from Better.com.  An apples to apples quote for a 20yr Fixed, Better offered me 2.75% with $4200 closing costs.  They offered to take that down to 2.375, but with a whopping $6400 in closing costs after the cost of the points.  They also offered to refi a 30-yr fixed @ 2.875% for $3600 closing costs.  Also, they offered a 15 year fixed @ 3.125% with $200 credit (no closing costs!).  But on that one, my P&I goes up $200/month, so again, I think I'd be better off just staying the course and investing that $200.

I am totally on board with you guys in this thread on the no extra payments, don't pay off early, etc.  I struggle a little bit with the idea of refinancing to a new 30-year, so with all that said...I feel like I just want to stay put with my 30 year that I have 21 years left on at 3.25%.  And just invest any of my future windfalls or anything that I normally would've put into paying extra on my mortgage.

Thoughts?  Any ides/replies are appreciated!  I just want to make sure I am not doing something bone-headed and leaving free money on the table.


dandarc

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Re: DONT Payoff your Mortgage Club
« Reply #2758 on: July 15, 2021, 03:35:59 PM »
How much would the house appraise for today?

FIREandMONEY

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Re: DONT Payoff your Mortgage Club
« Reply #2759 on: July 15, 2021, 03:48:19 PM »
How much would the house appraise for today?

325-350k.

dandarc

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Re: DONT Payoff your Mortgage Club
« Reply #2760 on: July 15, 2021, 04:06:01 PM »
Here's what I'd do (well maybe after I get over the sting mentioned upthread with the whole "we can loan you this money! Wait - you just formed your LLC this year? nevermind" deal):

Shop for good terms on a new 30 year note at 80% LTV. You'll likely cash out $80-90K, even after closing costs. Invest that money according to whatever you normally invest in. If you can get a $280,000 loan (80% if valued at $350K), then your principal and interest is now $1,161.70 and you've got another $80,000+ working for you, and you're only having to pay $135/ month more than you already do.

If you get to 21 years from now and really want to pay the house off, do so in a lump sum. That sort of gets to one of the big ideas of this thread - a lot of people screw up the risk calculus and do something that is both worse for growing wealth and for reducing wealth when we pay extra to our mortgage. That extra payment doesn't free you from making the payment next month, so until your balance is zero, you're not reducing your risk at all by making that extra payment.

If you're investing reasonably, odds are high that in 2 decades that $80K you have today will have grown to far more than you need to pay off the house. Even moreso if you stop yourself every time you're about to throw a little extra on the mortgage and invest instead.

dandarc

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Re: DONT Payoff your Mortgage Club
« Reply #2761 on: July 15, 2021, 04:10:21 PM »
Thought of a one-sentence version: In your position you can create a pretty big one of those windfalls you're planning to invest right now by cash-out refinancing.

dandarc

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Re: DONT Payoff your Mortgage Club
« Reply #2762 on: July 15, 2021, 04:16:19 PM »
You did this without having a plan for investing the proceeds first?
Have plan to invest it according to AA but hard to pull the trigger with lump sum... I've read all the books and know to just do it, but..
How big is this lump sum relative to your portfolio (both now and in the future)? Thinking along those lines has helped me kind of reduce the size of the money in my mind.

Hypothetical example - $100K probably seems like a whole lot initially, but if you already have another $400K and in 10 years it will likely be $2 million, how of a big of deal is getting the timing right on that $100K really?

Kevin Aster Tin Obin

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Re: DONT Payoff your Mortgage Club
« Reply #2763 on: July 15, 2021, 07:42:54 PM »
You did this without having a plan for investing the proceeds first?
Have plan to invest it according to AA but hard to pull the trigger with lump sum... I've read all the books and know to just do it, but..
How big is this lump sum relative to your portfolio (both now and in the future)? Thinking along those lines has helped me kind of reduce the size of the money in my mind.

Hypothetical example - $100K probably seems like a whole lot initially, but if you already have another $400K and in 10 years it will likely be $2 million, how of a big of deal is getting the timing right on that $100K really?

Good point.  it seems like a lot, but isn't a huge dent in total NW.

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #2764 on: July 20, 2021, 10:57:15 AM »
and... done..  don't pay off your mortgage, so I cash-out refi'd a rental property.  Now what to do with the lump of cash that I paid 2.99% to borrow for 30 years?  I really want to feel ok by getting >3% ROI..  put half in VTI and half in REIT?  Or throw it all on black at the casino?   Looking to buy another rental property now that I have 3x down payments, but hard to find a deal..  CDs are junk.. I'm feeling the cash drag of selling a house and now adding a cash out refi..

Put 40% of it in $VTI like today.

It's okay to take your time thinking about the rest. That starts you off with a very conservative allocation, which should be sufficient to lap that low interest rate.

nereo

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Re: DONT Payoff your Mortgage Club
« Reply #2765 on: July 24, 2021, 05:35:11 AM »
[note: the tone of this post is intended to be light-hearted, which might not be easily conveyed]

Whelp! After being near-models of financial efficiency my parents just gone and done something stupid!  After 43 (?) years they paid off the remaining 6 years of their mortgage in one lump sum, despite having a sub-3% fixed rate. The horror! The personal disgrace! Not only did I pay off my own super-low-rate mortgage when we sold our home (and moved into a rental), but now my parents nixed theirs voluntarily.

It all started about a year ago when my parents tried for another cash ReFi to pull out some equity.  They were shocked and a big angry when they were denied, despite having credit scores north of 800 and some $2MM in liquid assets. The sole reason? No income (both retired in the last five years). To the lenders it was as simple as that, never-mind my mother痴 pension and father痴 SS exceed the mortgage payment by a large multiple.
徹h well they said, 努e値l just continue paying as normal for the next 6 years until it goes away. 

So what changed?  A stupid financial planning session with their (fee-based) financial advisor, and of course Covid (because everything in the world seems to have been impacted by Covid).  You see, in 2020 my parents had planned a family reunion for their 50th and a great big extravagant trip, which were canceled (because: Covid). Their monthly expenses also plummeted as they weren稚 eating out or visiting their grandkids or, well, anything.  Meanwhile, their assets have gone way up along with the market. So they had this large chunk of cash sitting unused. Which the advisor saw towards the end of a tiring session about their assets and he was like 登h, this cash here would cover most of oyur mortgage balance, let痴 just nix that entirely.  My parents weakly objected but he was all enthusiastic about the idea and so they did it, and it痴 gone, and if the recent lending experience is any indication they値l never take out another fixed-rate loan in their lives.

Honestly, they are fine either way. More than fine. Waaay more than fine, as they both 双vershot their retirement plans.  But I am kinda sad somehow that their steadfast adherence to holding a fixed, low-rate mortgage has disappeared. Ironically, they still have their 杜ortgage sinking fund which is several times greater than their origional mortgage.  The dividends pay off the property taxes, but the account keeps growing. I guess they are talking about donating that in one lump sum in a few years, once they figure what life without a mortgage feels like.

honestly, I don稚 know why you folks keep letting me post in this thread
;-)

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #2766 on: July 24, 2021, 08:55:26 AM »
Hahaha, you know we don't  have a mortgage on our primary home either, right?* I know and respect others who teach differently, but I have no problem with people paying off their mortgages AFTER they hit their FI number. It's just stunningly sub optimal to do so before then. Sounds like your parents will be fine, just fine :-)

DH is looking at retiring very soon and we were considering taking out a mortgage before he does, simply because it's the cheapest money available, but it seems there's an inheritance headed our way, so we probably won't.

*General Note: We did not pay it off early, we never had one. And our rentals have mortgages. So we still have more mortgages than average, I suppose.

sonofsven

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Re: DONT Payoff your Mortgage Club
« Reply #2767 on: July 29, 2021, 11:41:12 AM »
If you refinanced in the last year you might want to look again.
Locked last night with Better, 30 yr 2.75 with approx $500 in credit (yes, they are paying me to borrow money at 2.75). Lender credit at that rate is in the thousands, the $500 surplus is whats left after loan costs.
Or switch to 2.875 (my current rate) with a few thousand in credit, decisions, decisions...
Amex is running a promo with Better for  $2000 statement credit with a successful re fi also, more free money.
Better has a well done web portal that will show you their rates, but not their best rates.
If you sign up with Bankrate you will see an even better rate for Better. Screenshot it and send it to the LO and they will re set your rate table.

mckaylabaloney

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Re: DONT Payoff your Mortgage Club
« Reply #2768 on: July 29, 2021, 11:49:22 AM »
Amex is running a promo with Better for  $2000 statement credit with a successful re fi also, more free money.

Wow I wish I didn't know this lol. I refinanced with Better earlier this summer and it looks like the Amex offer started...the DAY AFTER I closed.

Radagast

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Re: DONT Payoff your Mortgage Club
« Reply #2769 on: July 31, 2021, 12:45:05 PM »
DW got a larger than expected raise. Curiously, the mortgage payment didn't go up. Don't bankers index these things to inflation?!?!?

I'd love to refinance but its hard to beat 2.75% :(

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #2770 on: July 31, 2021, 01:22:26 PM »
DW got a larger than expected raise. Curiously, the mortgage payment didn't go up. Don't bankers index these things to inflation?!?!?

I'd love to refinance but its hard to beat 2.75% :(
Oh god, I'm so jealous. Not of the raise, but that sexy interest rate.

sonofsven

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Re: DONT Payoff your Mortgage Club
« Reply #2771 on: July 31, 2021, 06:37:54 PM »
If you refinanced in the last year you might want to look again.
Locked last night with Better, 30 yr 2.75 with approx $500 in credit (yes, they are paying me to borrow money at 2.75). Lender credit at that rate is in the thousands, the $500 surplus is whats left after loan costs.
Or switch to 2.875 (my current rate) with a few thousand in credit, decisions, decisions...
Amex is running a promo with Better for  $2000 statement credit with a successful re fi also, more free money.
Better has a well done web portal that will show you their rates, but not their best rates.
If you sign up with Bankrate you will see an even better rate for Better. Screenshot it and send it to the LO and they will re set your rate table.

Correction: the credit looks like $1200, plus or minus on 2.75. Crazy.
Also, I learned about this Bankrate/Better play on Bogleheads refinance thread.
« Last Edit: July 31, 2021, 06:39:42 PM by sonofsven »

YttriumNitrate

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Re: DONT Payoff your Mortgage Club
« Reply #2772 on: August 01, 2021, 07:48:09 AM »
Then there is inflation. Buy it now, pay it back later with inflated dollars that literally cost you less.
Very few loans have interest rates below inflation (and all of them that I've seen were attached to the purchase of overpriced consumer goods). Doesn't take away from the other parts of your arguments.
I would change that to "very few loans right now have interest rates below inflation." It wouldn't take much of a bump in inflation to cause a huge number of people to have mortgage rates less than inflation. Will it happen in the next 30 years? We'll see.

And just like that (a bit under two years from the post), most people who borrowed money for a residence in the past few years have a mortgage rate that is below inflation.
https://www.reuters.com/business/finance/us-consumer-prices-surge-june-2021-07-13/

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #2773 on: August 02, 2021, 12:47:55 PM »
I don't think anyone studying the problem thinks we can sustain this rate of inflation over the remaining 29.3 years of my mortgage, tho

YttriumNitrate

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Re: DONT Payoff your Mortgage Club
« Reply #2774 on: August 02, 2021, 03:58:45 PM »
I don't think anyone studying the problem thinks we can sustain this rate of inflation over the remaining 29.3 years of my mortgage, tho
Depends on what you mean by "this rate." From 1967 to 1985, inflation didn't drop below 3.0% on an annual basis, a rate people are getting these days on mortgages. If we were to exclude the 1.9% in 1986, we could make it to 1993 (almost the full 30 years) without inflation dropping below 3.0% on an annual basis.

That being said, if you're talking about inflation on a monthly basis, the 5% inflation rate of the last quarter probably isn't going to last 30 years.
https://www.usinflationcalculator.com/inflation/historical-inflation-rates/

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #2775 on: August 04, 2021, 06:34:16 AM »
would be useful to verify withdrawal rate that was safe for 1967-1985 period?

nereo

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Re: DONT Payoff your Mortgage Club
« Reply #2776 on: August 04, 2021, 07:25:34 AM »
Every economist I listen to stresses that 登ne quarter a trend does not make with regard to macroeconomics and inflation in particular. Yet everyone still gets in a tizzy over a couple numbers above 3%.

Personally I壇 love for the rolling five year average to hover just below 3%.

Weisass

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Re: DONT Payoff your Mortgage Club
« Reply #2777 on: August 04, 2021, 07:09:11 PM »
All y誕ll talking about rates made me curious, so I went and looked at better痴 site, and we could refinance to a 20-year at 2.375. We would get a 500 credit and pay 251 more a month (we currently pay ~3000/mo with taxes, etc on a 30 year fixed, we are 5 years in with no plans to move). I知 curious how y誕ll would evaluate something like that?

nereo

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Re: DONT Payoff your Mortgage Club
« Reply #2778 on: August 05, 2021, 06:34:16 AM »
All y誕ll talking about rates made me curious, so I went and looked at better痴 site, and we could refinance to a 20-year at 2.375. We would get a 500 credit and pay 251 more a month (we currently pay ~3000/mo with taxes, etc on a 30 year fixed, we are 5 years in with no plans to move). I知 curious how y誕ll would evaluate something like that?

I知 on my phone and unable to quickly do the math - what is your current rate on your 30y (25 remaining)?

At a quick glance it doesn稚 seem worth it to pay $251 more each month ($3k/y) to be done five years sooner. Even with sub par returns $3k of DCA over 20 years should net $100k

Weisass

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Re: DONT Payoff your Mortgage Club
« Reply #2779 on: August 05, 2021, 08:03:46 AM »
Thanks @nereo. Current rate is 3.125. The interest savings are about 100k if we refinance.



Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #2780 on: August 05, 2021, 08:17:00 AM »
Thanks @nereo. Current rate is 3.125. The interest savings are about 100k if we refinance.
Uhhh...

YttriumNitrate

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Re: DONT Payoff your Mortgage Club
« Reply #2781 on: August 05, 2021, 08:28:00 AM »
Thanks @nereo. Current rate is 3.125. The interest savings are about 100k if we refinance.
Based on the numbers you've provided it looks like you have about $500k in principal.

Even though the actual number of dollars of interest saved by going to the 20 year rate may be $100k, with 2% inflation, the value of the money paid back is only $50k more (in today's dollars). At 3% inflation, the value difference drops to $35k.

Weisass

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Re: DONT Payoff your Mortgage Club
« Reply #2782 on: August 05, 2021, 09:12:08 AM »
Thanks @nereo. Current rate is 3.125. The interest savings are about 100k if we refinance.
Uhhh...

Can you explain what you mean there?

dandarc

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Re: DONT Payoff your Mortgage Club
« Reply #2783 on: August 05, 2021, 09:17:28 AM »
What rate can you get off you refinance to a new 30 year term?

Weisass

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Re: DONT Payoff your Mortgage Club
« Reply #2784 on: August 05, 2021, 09:20:16 AM »
What rate can you get off you refinance to a new 30 year term?

Great question.  FWIW I am not interested in paying off my mortgage early, exactly. I was just trying to compare options. My husband has an interest in our mortgage being paid off before he retires, so I was interested in the 20 year because it scratches his itch there.

If we refinance to a 30 year, we could get a rate of 2.25 with a break even period of 2 years, 9 months. Given that we have zero plans to move, this may be a better option. If we wanted not to pay points, we could get a $300 credit on a 2.625 rate.
« Last Edit: August 05, 2021, 09:22:46 AM by Weisass »

Weisass

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Re: DONT Payoff your Mortgage Club
« Reply #2785 on: August 05, 2021, 09:21:07 AM »
Thanks @nereo. Current rate is 3.125. The interest savings are about 100k if we refinance.
Based on the numbers you've provided it looks like you have about $500k in principal.

Even though the actual number of dollars of interest saved by going to the 20 year rate may be $100k, with 2% inflation, the value of the money paid back is only $50k more (in today's dollars). At 3% inflation, the value difference drops to $35k.

Thanks @YttriumNitrate . This is the kind of math that I need in my life.

sonofsven

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Re: DONT Payoff your Mortgage Club
« Reply #2786 on: August 05, 2021, 10:49:43 AM »
What rate can you get off you refinance to a new 30 year term?

Great question.  FWIW I am not interested in paying off my mortgage early, exactly. I was just trying to compare options. My husband has an interest in our mortgage being paid off before he retires, so I was interested in the 20 year because it scratches his itch there.

If we refinance to a 30 year, we could get a rate of 2.25 with a break even period of 2 years, 9 months. Given that we have zero plans to move, this may be a better option. If we wanted not to pay points, we could get a $300 credit on a 2.625 rate.

I went with the "no cost" option twice in the last year, both times moving down in rate. That makes the most sense to me even though I am not planning on moving, ever. It gives you better options if rates continue their descent.
It's really just the paperwork hassle, which I'm willing to do.
YMMV
Try the Bankrate trick, Better doesn't give you their '"best" unless you play the game a little.

joe189man

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Re: DONT Payoff your Mortgage Club
« Reply #2787 on: August 05, 2021, 01:12:39 PM »
What rate can you get off you refinance to a new 30 year term?

we locked a 30 yr at 2.875% with a cash out refi to a 70% LTV. That rate comes with ~$2,600 in lender credits, basically making it a free loan. the 2.75% cost about $100 and would have saved $30 a month

Rates for loans with out cash out are lower

nereo

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Re: DONT Payoff your Mortgage Club
« Reply #2788 on: August 05, 2021, 01:19:08 PM »
What rate can you get off you refinance to a new 30 year term?

Great question.  FWIW I am not interested in paying off my mortgage early, exactly. I was just trying to compare options. My husband has an interest in our mortgage being paid off before he retires, so I was interested in the 20 year because it scratches his itch there.

If we refinance to a 30 year, we could get a rate of 2.25 with a break even period of 2 years, 9 months. Given that we have zero plans to move, this may be a better option. If we wanted not to pay points, we could get a $300 credit on a 2.625 rate.

Under those circumstances, here's what I'd do.  If you are confident you won't move in the next 2 years, take the 2.25% refi (if not, the 2.625 is still better than your existing).  Then, to satisfy your husband's "itch" to have a paid off mortgage, set up a "house sinking fund" invested based on your AA (I'd do a simple index fund).  Plug the $280(ish) you 'save' each month by having a lower rate into your sinking fund and forget about it.  In 20 years there should be well over $100k in there.  If you still feel like it, you can pay off the remainder of your mortgage once the balance in your sinking fund exceeds your remaining mortgage.  If you are like my parents, after 20 years of inflation and pay raises the monthly PI payment will seem so inconsequential and the six-figures in your 'sinking fund' so substantial that you'll just laugh and keep the mortgage, and the money.

YttriumNitrate

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Re: DONT Payoff your Mortgage Club
« Reply #2789 on: August 05, 2021, 01:31:08 PM »
Amex is running a promo with Better for  $2000 statement credit with a successful re fi also, more free money.
I've been looking into this, and ever since Fidelity's rewards card went from Amex to Visa I have not had an Amex card. So, if I need to get an Amex card, the question is now what is the best card that qualifies for the $2000 statement? Ideally it would be something with no annual fee and some sort of reward program or other signup incentive (e.g., 60,000 frequent flier miles).

Weisass

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Re: DONT Payoff your Mortgage Club
« Reply #2790 on: August 05, 2021, 01:54:42 PM »
What rate can you get off you refinance to a new 30 year term?

Great question.  FWIW I am not interested in paying off my mortgage early, exactly. I was just trying to compare options. My husband has an interest in our mortgage being paid off before he retires, so I was interested in the 20 year because it scratches his itch there.

If we refinance to a 30 year, we could get a rate of 2.25 with a break even period of 2 years, 9 months. Given that we have zero plans to move, this may be a better option. If we wanted not to pay points, we could get a $300 credit on a 2.625 rate.

Under those circumstances, here's what I'd do.  If you are confident you won't move in the next 2 years, take the 2.25% refi (if not, the 2.625 is still better than your existing).  Then, to satisfy your husband's "itch" to have a paid off mortgage, set up a "house sinking fund" invested based on your AA (I'd do a simple index fund).  Plug the $280(ish) you 'save' each month by having a lower rate into your sinking fund and forget about it.  In 20 years there should be well over $100k in there.  If you still feel like it, you can pay off the remainder of your mortgage once the balance in your sinking fund exceeds your remaining mortgage.  If you are like my parents, after 20 years of inflation and pay raises the monthly PI payment will seem so inconsequential and the six-figures in your 'sinking fund' so substantial that you'll just laugh and keep the mortgage, and the money.

That is helpful. FWIW I think my husband is less likely to worry about this in 20 years than he thinks.  We both have tenure in our positions, so there is zero possibility that we move. I will talk with him about these two options, and see where we land. Definitely feels worth pulling the trigger for nearly a percentage point difference.

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #2791 on: August 05, 2021, 04:27:49 PM »
Thanks @nereo. Current rate is 3.125. The interest savings are about 100k if we refinance.
Uhhh...

Can you explain what you mean there?
I don't have time today, alas. Maybe someone else will jump in and explain there's a better way to approach this. You wouldn't be "saving" anything if you took that same amount of money and invested it instead. For now, I'll just say I would strongly encourage you to take @nereo's suggestion. Grab the low rate and figure out the details later.

Weisass

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Re: DONT Payoff your Mortgage Club
« Reply #2792 on: August 05, 2021, 05:17:37 PM »
Thanks @nereo. Current rate is 3.125. The interest savings are about 100k if we refinance.
Uhhh...

Can you explain what you mean there?
I don't have time today, alas. Maybe someone else will jump in and explain there's a better way to approach this. You wouldn't be "saving" anything if you took that same amount of money and invested it instead. For now, I'll just say I would strongly encourage you to take @nereo's suggestion. Grab the low rate and figure out the details later.
Fair enough. I just wanted to make sure I wasn稚 making a obviously dumb mistake, something that should致e been incredibly obvious. I will admit that part of me was worried that I was a butt of a joke here.
« Last Edit: August 05, 2021, 05:29:12 PM by Weisass »

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Re: DONT Payoff your Mortgage Club
« Reply #2793 on: August 05, 2021, 05:24:18 PM »
I知 debt free!  Of course now I知 a renter.

sonofsven

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Re: DONT Payoff your Mortgage Club
« Reply #2794 on: August 05, 2021, 05:44:20 PM »
Amex is running a promo with Better for  $2000 statement credit with a successful re fi also, more free money.
I've been looking into this, and ever since Fidelity's rewards card went from Amex to Visa I have not had an Amex card. So, if I need to get an Amex card, the question is now what is the best card that qualifies for the $2000 statement? Ideally it would be something with no annual fee and some sort of reward program or other signup incentive (e.g., 60,000 frequent flier miles).

I picked the "Cash Magnet" amex for all those reasons. They have a lot of different cards.
I got pre-approved but I'm waiting until I'm farther along in the refi before I apply. I wouldn't get the card if it weren't for the promo.
The Better loan officer said I can get the card any time up to closing.
Also I will check with amex when applying to make sure it qualifies for the offer.

YttriumNitrate

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Re: DONT Payoff your Mortgage Club
« Reply #2795 on: August 06, 2021, 06:55:12 AM »
Amex is running a promo with Better for  $2000 statement credit with a successful re fi also, more free money.
I've been looking into this, and ever since Fidelity's rewards card went from Amex to Visa I have not had an Amex card. So, if I need to get an Amex card, the question is now what is the best card that qualifies for the $2000 statement? Ideally it would be something with no annual fee and some sort of reward program or other signup incentive (e.g., 60,000 frequent flier miles).

I picked the "Cash Magnet" amex for all those reasons. They have a lot of different cards.
I got pre-approved but I'm waiting until I'm farther along in the refi before I apply. I wouldn't get the card if it weren't for the promo.
The Better loan officer said I can get the card any time up to closing.
Also I will check with amex when applying to make sure it qualifies for the offer.

Thanks! I'll definitely check out that card. Regarding the timing of when to get the card, here's the response I got:
Quote
To answer your question, you do not need to start a new application, once you have locked your Rate Table in your Better Mortgage Platform our system will ask you to enter in your AMEX card number.  You will need to provide this information prior to closing in order to receive the statement credit.

We not have restrictions as to whether you can apply for an AMEX credit card, and you can call the 1-800 number on the back of your card to check whether this card is eligible for the promotion.  Please be mindful that opening a new credit card may potentially impact your credit score, which may affect loan qualification.

I'll probably get the card sooner rather than later just to avoid a potential surprise of accidentally getting one that isn't eligible when I'm far along in the refi process.

Weisass

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Re: DONT Payoff your Mortgage Club
« Reply #2796 on: August 06, 2021, 04:50:04 PM »
Welp, we locked in a refi rate with better... 2.25%.  we were able to negotiate their feeds down quite a bit with the help of some better rates on bank rate.  Altogether, pretty happy with the experience so far.

bryan995

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Re: DONT Payoff your Mortgage Club
« Reply #2797 on: August 10, 2021, 01:54:43 PM »
Re-financed to a 2.75%, 30yr, -$4000 closing costs about 9 months ago.

About ready to have another go at it. 
Currently owe $617k on ~1.2M.  Super-confirming limit is $752k where I live, so I want to cash-out-refi 135k to maximize the banks cheap leverage. (assuming this makes sense?)
Could look into jumbo terms, but normally they are much worse, no?

Still torn on the 15yr or 30yr vehicle. Will likely retire in ~5 years and may not want to carry the mortgage due to ACA/tax etc (live in CA), need to read more here...

Who has the best rates/terms these days?  Will start some quotes now with costco, loandepot etc.
« Last Edit: August 10, 2021, 01:58:54 PM by bryan995 »

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #2798 on: August 10, 2021, 02:55:17 PM »
how much more can U improve on 2.75% if you stick with 30-year?

dandarc

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Re: DONT Payoff your Mortgage Club
« Reply #2799 on: August 10, 2021, 03:05:34 PM »
I always forget about Costco.