Author Topic: DONT Payoff your Mortgage Club  (Read 540768 times)

Fire2025

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Re: DONT Payoff your Mortgage Club
« Reply #2850 on: August 25, 2021, 03:49:56 PM »
Hey all,
I have a question.  I'm doing a refi with a 50,000 cash out, going from 3.75/ 30yrs to 2.7/ 30yrs, 2000 in fees. Total loan 280K, 31% of house value.  Payment stays the same.  Original loan 273K in 2017. 

Cash out will go into the market in keeping with my current AA.

My partner, who is extremely debt averse, said I'm flushing the interest I've paid in the last 4 years down the toilet, with the refi.  And asked when the lower interest rate would cover that loss?
 
Sorry if I'm asking a stupid question.  But, what is the answer to the question of "what about the interest you've already paid when you refi"?

Interest is what you pay each month to keep the loan.  Every month you choose to either repay the loan entirely or pay interest.  Each month you “flush the interest down the toilet”…. It’s gone when you pay it.  Is it worth it?  To most here, yes, because flushing the interest allows us to turn on the fire hose of investment returns. 

But refinancing doesn’t re-flush the previously paid interest.  As already discussed it’s long gone.  Like you said, sunk cost fallacy.

An analogy.  Tell your partner you found a cheaper wireless carrier — you could even get an extra line for the same price if you wanted to — but don’t want to flush all your previous bill payments down the drain.  See if it feels the same.

Thanks for that perspective.  I like your analogy, that makes sense to me.  I tried to make the argument that as long as I have a loan, I'll have interest, and therefor when I pay the interest is kind of a moot point with regards to the refi.  But he said it totally mattered and I felt like I must be missing something.

bryan995

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Re: DONT Payoff your Mortgage Club
« Reply #2851 on: August 25, 2021, 05:05:24 PM »
The best (no/low cost) I could find was ~3.1% APR.   60% LTV, cash out of 140k,  $752k total loan (via loandepot/amerisave).

Still torn on increasing our rate (coming from 2.75%).  Could simply carry a mortgage on our planned rental to increase cheap leverage.
Will give it a big longer and try to get a few more quotes + matches.


« Last Edit: August 25, 2021, 07:20:50 PM by bryan995 »

Vapour

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Re: DONT Payoff your Mortgage Club
« Reply #2852 on: August 27, 2021, 11:15:52 PM »
Thanks to this thread, I learned Better was having another $2k Amex credit and locked with them today.  I missed out on the Amex credit last time since Better did not operate in my state.  Apparently they started to within the last year.  I had to apply for an Amex card today right before I locked my rate.

This is my second re-fi in the last year.  I'm taking out ~$30k this time.  I was sort of torn about this since I'm planning to FIRE next year.  Usually people want to pay off their mortgages before retiring.  I'm doing the opposite.  But at 3% and with better credits for a cash out, I couldn't resist.  Closing costs are around $500, so assuming the Amex credit goes through, I should come out $1500 ahead.  Not bad to lower my interest rate a little (3.125% to 3%) and get $30k out.  Still have <50% LTV and my mortgage payment is still low.  If I was further away from FIRE, I'd probably take out more.  But with the stock market high and FIRE on the horizon, I wouldn't feel comfortable borrowing much more.

The initial estimates I got from Better were terrible.  But they are very good at matching other offers.  With the Amex credit, you come out $2k ahead of other lenders so it's hard to beat that.  I used LenderFi to get a decent quote to have them match.  Would highly recommend this approach if Better is licensed in your state.  I've been impressed with Better so far.  They actually let you lock the rate online which is nice.  Everyone else seems to make you call.  They were kind enough to extend the rate lock for me too.  Hopefully the rest of the process goes smoothly.

bryan995

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Re: DONT Payoff your Mortgage Club
« Reply #2853 on: August 31, 2021, 01:42:33 PM »
Just locked a 2.9%, 30yr fixed with LoanDepot.  ~63% LTV, loan amount increased to the county conventional max ($753,250).  Will provide $134k in cash out. 
Total cost is ~$900 after lender credits.

New payment will increase from $3600/mo -> $4200/mo due to the cash out, which I am OK with.  A bit more 'forced savings' can't hurt.

Now the hunt for an income producing rental begins.
« Last Edit: August 31, 2021, 04:36:54 PM by bryan995 »

nereo

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Re: DONT Payoff your Mortgage Club
« Reply #2854 on: August 31, 2021, 06:00:57 PM »
I’m back baby!

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #2855 on: August 31, 2021, 09:45:16 PM »
I’m back baby!
You must have read my mind! I was wondering how you were doing today and was going to ping you. Does this mean there's a journal update in the offing, too? Hope so and hope there's good news.

nereo

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Re: DONT Payoff your Mortgage Club
« Reply #2856 on: September 01, 2021, 04:36:47 AM »
I’m back baby!
You must have read my mind! I was wondering how you were doing today and was going to ping you. Does this mean there's a journal update in the offing, too? Hope so and hope there's good news.

This market is crazy. We missed our initial closing appointment through no fault of our own (something about the lender and the title company not getting information to each other fast enough the day before).  Sounded like every appraiser, title company and lender is booked weeks out.  But around 6:15pm last night it all *finally* went through

The numbers:
30y fixed at 2.725%, no points. 20% down (no PMI)

Somehow our total monthly mortgage payment (PIMI) is going to be $558 less than our already cheap rent for what will be a much nicer home in a way better area. College towns = inflated rent prices.

We begin moving (ugh) Friday afternoon, and plan on taking two weekends.

As part of the 30-some documents which needed our signature was a lot of stuff on how there’s no prepayment penalty - not going to pay this loan off early until we move. Our plan is to remain there at least 7 years, hopefully longer.

Can I rejoin the club now?


Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #2857 on: September 01, 2021, 05:12:07 AM »
Hell, yes! Wait! You can, as long as you promise to keep shoveling all that sweet, saved money into low-cost equities or the like, lol. What a great deal! You have been through several trying years. I hope this new location, job and home are harbingers of good things to come for you and your family. Way to go, nereo!

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #2858 on: September 01, 2021, 07:32:03 AM »
@nereo, good job, you got a loan that beats me by 2.5 basis points. I look forward to celebrating our slowly decreasing leverage together on this thread!

PathtoFIRE

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Re: DONT Payoff your Mortgage Club
« Reply #2859 on: September 01, 2021, 11:07:26 AM »
Anyone in this thread have the holy grail, a long-term interest-only mortgage?

We are in Texas, and did a cashout refinance in 2015 in order to extinguish all student loans and pad the then-new Vanguard account, and in hindsight I wouldn't have done it differently (though the sideways market for 15 months after did get a little side-eye from me). But that left us with a type of mortgage that almost no bank wanted to touch (seriously, no one but semi-shady small operators appear willing to refinance a "jumbo Texas home equity loan" as they are called here). So now we are squarely back in just the normal jumbo Texas loan status after the most recent refinance, and have 11 months left on the clock until we are allowed to refinance again and get access to the fuller market.

I'm not holding my breath that rates will be as great then as they are now, but I'm already planning my next refinance (but don't tell DW, she'd kill me at the thought of repeating what we went through this summer), and want to either do another cashout, this time for pure investment purposes (I put us at an LTV of 54% right now, but the 2 appraisals we had to get show us closer to 45%; either way there's a lot of equity doing nothing in our house right now), or even better an interest-only loan. But I've been a part of this thread for most of it's life, and can't recall it coming up much. So has no one taken the plunge, or are all you IO-mortgage folks lurking and nursing your even loftier superiority over us traditional DPOYM club noobs?

nereo

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Re: DONT Payoff your Mortgage Club
« Reply #2860 on: September 01, 2021, 05:20:45 PM »
Hell, yes! Wait! You can, as long as you promise to keep shoveling all that sweet, saved money into low-cost equities or the like, lol. What a great deal! You have been through several trying years. I hope this new location, job and home are harbingers of good things to come for you and your family. Way to go, nereo!

Wait, what?  I have to invest the savings responsibly??  That sounds less fun. 

Can’t I use some of the savings on hookers and booze?  What if I use the same justifications that the “pay off your mortgage ASAP” crowd does:
“[hookers and booze] make me feel better”
or
“[hookers and booze] let me sleep at night”
or
“I like the certainty of [hookers and booze], even if the return isn’t that great”
or
“I want to know that no one can take my [hookers and booze] away from me if the SHTF”.

dragoncar

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Re: DONT Payoff your Mortgage Club
« Reply #2861 on: September 01, 2021, 06:22:32 PM »
Hell, yes! Wait! You can, as long as you promise to keep shoveling all that sweet, saved money into low-cost equities or the like, lol. What a great deal! You have been through several trying years. I hope this new location, job and home are harbingers of good things to come for you and your family. Way to go, nereo!

Wait, what?  I have to invest the savings responsibly??  That sounds less fun. 

Can’t I use some of the savings on hookers and booze?  What if I use the same justifications that the “pay off your mortgage ASAP” crowd does:
“[hookers and booze] make me feel better”
or
“[hookers and booze] let me sleep at night”
or
“I like the certainty of [hookers and booze], even if the return isn’t that great”
or
“I want to know that no one can take my [hookers and booze] away from me if the SHTF”.

Hookers and booze are mathematically optimal though

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #2862 on: September 01, 2021, 07:30:13 PM »
If you think you deserve so much money to spend on booze (before you're FI), how about going over to the "intentional/voluntary discomfort" topic and reminding yourself what true Mustachianism is all about?

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #2863 on: September 01, 2021, 09:27:28 PM »
Hell, yes! Wait! You can, as long as you promise to keep shoveling all that sweet, saved money into low-cost equities or the like, lol. What a great deal! You have been through several trying years. I hope this new location, job and home are harbingers of good things to come for you and your family. Way to go, nereo!

Wait, what?  I have to invest the savings responsibly??  That sounds less fun. 

Can’t I use some of the savings on hookers and booze?  What if I use the same justifications that the “pay off your mortgage ASAP” crowd does:
“[hookers and booze] make me feel better”
or
“[hookers and booze] let me sleep at night”
or
“I like the certainty of [hookers and booze], even if the return isn’t that great”
or
“I want to know that no one can take my [hookers and booze] away from me if the SHTF”.

Hookers and booze are mathematically optimal though
Better or worse than hookers and blow? Asking for a friend.

dragoncar

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Re: DONT Payoff your Mortgage Club
« Reply #2864 on: September 02, 2021, 12:29:21 AM »
Quote
Hookers and booze are mathematically optimal though
Better or worse than hookers and blow? Asking for a friend.

Blow is better in an up market, but booze wins during a recession. 

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #2865 on: September 02, 2021, 12:37:44 AM »
Quote
Hookers and booze are mathematically optimal though
Better or worse than hookers and blow? Asking for a friend.

Blow is better in an up market, but booze wins during a recession.
So is nereo calling the top?

nereo

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Re: DONT Payoff your Mortgage Club
« Reply #2866 on: September 02, 2021, 01:45:34 AM »
Quote
Hookers and booze are mathematically optimal though
Better or worse than hookers and blow? Asking for a friend.

Blow is better in an up market, but booze wins during a recession.
So is nereo calling the top?

Nah, I’ll let Thorstash handle calling the top.

Re: booze vs. blow - as this is a forum focused on FI/RE, let’s say it’s all about risk assessment. If there’s one underappreciated risk to an otherwise bullet-proof (i.e. sub 4% WR) retirement, it’s being forced into the judicial system. A proper legal defense can quickly run into the six figures, and incarceration is by definition antithetical to the freedoms that FI/RE brings.

Perhaps the only threat as great to one’s otherwise solid retirement plans is health-care costs (at least within the US). While excessive chronic indulgence of booze does seriously impact one’s overall health, I’d argue that risk pales in comparison to equal use of blow. I’d argue one can partake in a moderate (i.e. 1-2x per day) level of drinking for years with little more than some weight gain to show for it (which itself can be offset by some dieting and rigorous exercising).  I doubt one can do an equal amount of blow for 2 years and not suffer serious systemic organ damage.

Tl;dr - booze is better for your economic security than blow.

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #2867 on: September 02, 2021, 08:04:26 AM »
booze can lead to legal exposure as well: arrests for DUI, or legal separation from a job that has a "no working under the influence" policy.

dragoncar

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Re: DONT Payoff your Mortgage Club
« Reply #2868 on: September 02, 2021, 03:24:41 PM »
booze can lead to legal exposure as well: arrests for DUI, or legal separation from a job that has a "no working under the influence" policy.

This is a good point

Either way, I’m jacked to the TITS

nereo

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Re: DONT Payoff your Mortgage Club
« Reply #2869 on: September 02, 2021, 03:29:45 PM »
booze can lead to legal exposure as well: arrests for DUI, or legal separation from a job that has a "no working under the influence" policy.

hmm... so my logic is flawed then.  Oh well, back to investing the savings following the Investment Over from not paying down my mortgage.

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #2870 on: September 03, 2021, 06:17:16 AM »
Drink, challenge your body with difficult chemicals, just make damn sure you don't pay ahead on that mortgage and you're still in our club :-)

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #2871 on: September 03, 2021, 07:42:12 AM »
booze can lead to legal exposure as well: arrests for DUI, or legal separation from a job that has a "no working under the influence" policy.

hmm... so my logic is flawed then.  Oh well, back to investing the savings following the Investment Over from not paying down my mortgage.
@nereo, this is not directed at you personally, just a general observation. It always cracks me up when people talk about drinking on this forum and don't get facepunched called out on it. Booze is expensive and is totally optional, like cable TV or Amazon Prime.

Related: I got banned from Next Door over this phrase. Someone was whinging about the local elected's salaries, which I happen to know is about $6k per year (not a typo). I also know that the majority of them donate that amount and more to local charitable endeavors. I said, "It's not like they're spending it on hookers and blow." And just like that, I was banned. Fortunately my local mod understood the OS reference and got me reinstated, albeit sans the H&B comment, which blows.

Note to @talltexan: you win the thread today!

JJ-

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Re: DONT Payoff your Mortgage Club
« Reply #2872 on: September 03, 2021, 10:18:53 AM »
Anyone doing cash out refinances recently?

Zillow's appraisal (different than zestimate) pegs our house value high enough that if we wanted to we could keep 20% equity and withdraw almost $50k.

We did a cash out refi a few months ago and the appraisal came in higher than Zillow's estimate, which was the highest of the online realtors. I picked a nice round number to cash out and ended up at 70% LTV.

JJ-

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Re: DONT Payoff your Mortgage Club
« Reply #2873 on: September 03, 2021, 10:24:04 AM »
I notice I can likely do a cash out of $100k+ at either my current rate of 2.75% or maybe even 2.625%. The goal would to be maximize the "conforming loan" limit, and then I would be free to pursue lower interest rates exclusively for a few years. But I would probably restrain any future refinances to the greater of 70% and the conforming limit unless something amazing popped up. I ran it by the wife, who says "I don't know much about investing. Did you ask that mustache?" Consider yourselves asked :).

The money would probably go to 60% VEA 40% VWALX*, giving a total taxable split 1/3 RZV, 1/3 VEA, 1/3 VWALX. Doing my best to backtest that allocation, it gives a pleasant combo of better returns than all but a 100% VTI stock allocation, but better worse case scenarios that most "guru" allocations. Also, a mixture of VEA and VWALX distributes a yield of about 2.625%, similar to the mortgage rate. Monthly mortgage payments are higher because of principal, but the investments (stocks anyhow) are likely to grow dividends over time.

Of course we could just try for a rate reduction. Nothing wrong with a lower monthly payment by a few dozen dollars either.

*unless I try to get a $500 brokerage bonus from etrade or somewhere.

Which lender?
Planning to do exactly the same.

Confirming limit where I live is $752,350. Will cash out refi up to that amount to maximize leverage. That would put us at ~63% LTV.

The lender I spoke to today expects a massive increase to the confirming limit for next year (jan1). So assuming rates stay low, and housing keeps appreciating, could likely redo this again. And then even one final time a few months later  to lock in a low (non cash out) rate. :)
Rates seem to be a bit higher for cash-outs.

Folks on bogleheads are all using better.com to match rates and then receive a $2000 AMEX statement upon close. Will look into this.
Sebonic is the one I am leaning toward (of the few I did more than a few seconds research on). As of this morning they said 2.75%, with a small lender points credit. Better doesn't serve my type, so they were never an option here.

In the mean time I am triple checking my assumptions before I yoink $100,000+. But, even investing in the S&P500 from the Y2K top, starting with $100,000 would have given much better results ($57,051) at the 2009 market bottom than DCA $408 per month* after starting with a $3,000 saved lender cost would have ($34,876). And if it was better at the bottom, it was definitely better after. And other asset allocations better yet.

*monthly payment on a $100,000 mortgage at 2.75%

https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=2000&firstMonth=4&endYear=2009&lastMonth=2&calendarAligned=true&includeYTD=false&initialAmount=3000&annualOperation=1&annualAdjustment=408&inflationAdjusted=false&annualPercentage=0.0&frequency=2&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=VFINX&allocation1_1=100
Did you end up yoinking? We did.

My thought process was after refi'ing to drop interest rate, I was like I love this skipped mortgage payment I can invest this month's payment. Then I was like why not cash out, it could be a bad time if this is the top of a pre cash and takes forever or never to recover. Or it could be fine as we won't need this $ for at least 10 years. worst case scenario we keep working another year or two to keep a roof over our heads.

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #2874 on: September 03, 2021, 12:55:37 PM »
Winning the thread today is nice, but my mortgage still has another 10,165 days left on it.

Radagast

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Re: DONT Payoff your Mortgage Club
« Reply #2875 on: September 03, 2021, 02:06:39 PM »
Did you end up yoinking? We did.

My thought process was after refi'ing to drop interest rate, I was like I love this skipped mortgage payment I can invest this month's payment. Then I was like why not cash out, it could be a bad time if this is the top of a pre cash and takes forever or never to recover. Or it could be fine as we won't need this $ for at least 10 years. worst case scenario we keep working another year or two to keep a roof over our heads.
Yup! We are locked for 30-year 2.75% with no points either way, plus a couple thousand lost in closing costs and appraisal. The house appraised for $690,000, which is exactly what we needed for the $548,250 maximum conforming loan and 80% LTV. Worst case, we are cashing out exactly enough to pay off our 3% investment property mortgage :D.

I am probably actually going to split between VEA, SCHX, and VWALX. I admit to being concerned about US stock prices, but I decided to include SCHX just to tell myself not to be too sure. Also that will keep my overall stock allocation 50/50 US/International, which I am pretty happy with.

In the mean time, we are diligently and vigorously not paying of our mortgages!

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Re: DONT Payoff your Mortgage Club
« Reply #2876 on: September 03, 2021, 02:28:28 PM »
Did you end up yoinking? We did.

My thought process was after refi'ing to drop interest rate, I was like I love this skipped mortgage payment I can invest this month's payment. Then I was like why not cash out, it could be a bad time if this is the top of a pre cash and takes forever or never to recover. Or it could be fine as we won't need this $ for at least 10 years. worst case scenario we keep working another year or two to keep a roof over our heads.
Yup! We are locked for 30-year 2.75% with no points either way, plus a couple thousand lost in closing costs and appraisal. The house appraised for $690,000, which is exactly what we needed for the $548,250 maximum conforming loan and 80% LTV. Worst case, we are cashing out exactly enough to pay off our 3% investment property mortgage :D.

I am probably actually going to split between VEA, SCHX, and VWALX. I admit to being concerned about US stock prices, but I decided to include SCHX just to tell myself not to be too sure. Also that will keep my overall stock allocation 50/50 US/International, which I am pretty happy with.

In the mean time, we are diligently and vigorously not paying of our mortgages!
That's great. Isn't it amazing when the numbers work out magically perfect?

I would have pulled out another chunk to get to 80% but I didn't want to put too much pressure on our income with me going part time and DW's employment still somewhat in flux. Granted it would have been only a few more hundred dollars a month but funny how budgets work out sometimes.

Our rate i couldn't get below 3.125 no cost. I will probably refi again in a few months to get a lower rate without the cash out. Seems rates in my area were higher with cash out with all lenders on bankrate compared to no cash refi.

bryan995

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Re: DONT Payoff your Mortgage Club
« Reply #2877 on: September 04, 2021, 06:49:33 PM »
Saw the same thing with higher rates on cash outs.

Planning to refi again in a few months without a cash out to lock in a lower rate. Though the conventional limit is expected to significantly increase for 2022. Might cash out refi one more time up to the max, quickly followed by one final refi to lock in the lowest possible rate for our 30yr journey (assuming nothing major changes).

Malcat

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Re: DONT Payoff your Mortgage Club
« Reply #2878 on: September 05, 2021, 07:02:36 AM »
booze can lead to legal exposure as well: arrests for DUI, or legal separation from a job that has a "no working under the influence" policy.

hmm... so my logic is flawed then.  Oh well, back to investing the savings following the Investment Over from not paying down my mortgage.
@nereo, this is not directed at you personally, just a general observation. It always cracks me up when people talk about drinking on this forum and don't get facepunched called out on it. Booze is expensive and is totally optional, like cable TV or Amazon Prime.

Even Pete comments on the insane expense of alcohol, but it seems to be a bit of a sacred cow for a lot of people.

nereo

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Re: DONT Payoff your Mortgage Club
« Reply #2879 on: September 05, 2021, 04:58:10 PM »
booze can lead to legal exposure as well: arrests for DUI, or legal separation from a job that has a "no working under the influence" policy.

hmm... so my logic is flawed then.  Oh well, back to investing the savings following the Investment Over from not paying down my mortgage.
@nereo, this is not directed at you personally, just a general observation. It always cracks me up when people talk about drinking on this forum and don't get facepunched called out on it. Booze is expensive and is totally optional, like cable TV or Amazon Prime.

Even Pete comments on the insane expense of alcohol, but it seems to be a bit of a sacred cow for a lot of people.

I agree that alcohol is expensive and for whatever reason many treat it like some sacred cow. Perhaps that’s why I make such jokes (in poor taste).  Compared to what seems to be the median consumption we are light and occasional drinkers. I can’t remember the last time we had more than two drinks in a day and most days we don’t have zero.

It also fascinates me how competitively expensive booze is in restaurants compared to the grocery store - particularly with the effort involved in prep and serving. I can get behind a well- crafted $26 main course but not an $8 beer or a $16 “craft cocktail”.

Malcat

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Re: DONT Payoff your Mortgage Club
« Reply #2880 on: September 05, 2021, 05:28:30 PM »
booze can lead to legal exposure as well: arrests for DUI, or legal separation from a job that has a "no working under the influence" policy.

hmm... so my logic is flawed then.  Oh well, back to investing the savings following the Investment Over from not paying down my mortgage.
@nereo, this is not directed at you personally, just a general observation. It always cracks me up when people talk about drinking on this forum and don't get facepunched called out on it. Booze is expensive and is totally optional, like cable TV or Amazon Prime.

Even Pete comments on the insane expense of alcohol, but it seems to be a bit of a sacred cow for a lot of people.

I agree that alcohol is expensive and for whatever reason many treat it like some sacred cow. Perhaps that’s why I make such jokes (in poor taste).  Compared to what seems to be the median consumption we are light and occasional drinkers. I can’t remember the last time we had more than two drinks in a day and most days we don’t have zero.

It also fascinates me how competitively expensive booze is in restaurants compared to the grocery store - particularly with the effort involved in prep and serving. I can get behind a well- crafted $26 main course but not an $8 beer or a $16 “craft cocktail”.

Market forces at play.

People love their booze and will pay through the nose for it if that's the only option. In a lot of restaurants, those booze markups are the only thing keeping the restaurant in the black.

ender

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Re: DONT Payoff your Mortgage Club
« Reply #2881 on: September 05, 2021, 08:50:18 PM »
But if you don't pay off your mortgage you'll have plenty of extra money available for alcohol right?

dragoncar

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Re: DONT Payoff your Mortgage Club
« Reply #2882 on: September 05, 2021, 11:59:10 PM »
But if you don't pay off your mortgage you'll have plenty of extra money available for alcohol right?

And blow!

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #2883 on: September 06, 2021, 01:22:20 AM »
It's good to have goals...

JJ-

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Re: DONT Payoff your Mortgage Club
« Reply #2884 on: September 06, 2021, 06:44:32 AM »
It's good to have goals...
Especially if you keep moving the 30 yr goal.

DadJokes

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Re: DONT Payoff your Mortgage Club
« Reply #2885 on: September 10, 2021, 09:48:09 AM »
Currently have 2.99% rate with ~28 years remaining.

I'm receiving an offer from my current lender via VA IRRL.

2.25% rate would drop my payment by $139/month, and the current balance would increase by $2,676, making it a 19-month breakeven point.

It seems nice, but I've also refinanced twice in the last five years, and I don't know if I want to deal with it again.

sonofsven

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Re: DONT Payoff your Mortgage Club
« Reply #2886 on: September 10, 2021, 10:54:17 AM »
Better sent me a promo code offer that up to five of my friends can use for an additional $500 credit on a refi, message me if you want it. There's nothing in it for me.
The $2000 Better/Amex credit showed up on my new Amex card, and after I spent $2090.00 on new carpet the $200 bonus for spending $2k showed up as well.

mntnmn117

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Re: DONT Payoff your Mortgage Club
« Reply #2887 on: September 10, 2021, 11:10:30 AM »
I'm about to do a big cash out Refi. From 8 years left on a 15yr to new 30yr. 20% LTV to 70% LTV. Seems hard like I could have huge regrets if we are on the precipice of a dot com bust.  Investing in VT/VTI.  Mentally you have to just keep telling yourself its the right decision and the math works?

nereo

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Re: DONT Payoff your Mortgage Club
« Reply #2888 on: September 10, 2021, 11:17:20 AM »
I'm about to do a big cash out Refi. From 8 years left on a 15yr to new 30yr. 20% LTV to 70% LTV. Seems hard like I could have huge regrets if we are on the precipice of a dot com bust.  Investing in VT/VTI.  Mentally you have to just keep telling yourself its the right decision and the math works?

It’s hard for me to envision a scenario in which this plan didn’t work out very well for you over the next decade +.

bryan995

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Re: DONT Payoff your Mortgage Club
« Reply #2889 on: September 10, 2021, 09:57:40 PM »
I'm about to do a big cash out Refi. From 8 years left on a 15yr to new 30yr. 20% LTV to 70% LTV. Seems hard like I could have huge regrets if we are on the precipice of a dot com bust.  Investing in VT/VTI.  Mentally you have to just keep telling yourself its the right decision and the math works?

That's a baller move! :). How close to FIRE are you?  Plan to stay in the home long-term?

We just had our appraisal today, talked shop a bit with the appraiser, he thinks we may come close to appraising at 1.25M, which would bring our cash-out-refi into the 60% LTV range.  Would love to cash out more, but we are already at the conventional limit of 752k with this refi.  May need to re-fi again next year when the county conforming limit increases - some seem to think it may jump to 850 ish.  But then I am also torn on holding a mortgage > 750k due to the phase out of the mortgage interest deduction.  With that said, I still feel the play/hedge on inflation alone makes this a winning strategy ... so it may need to be done. 

Radagast

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Re: DONT Payoff your Mortgage Club
« Reply #2890 on: September 11, 2021, 02:06:36 PM »
I'm about to do a big cash out Refi. From 8 years left on a 15yr to new 30yr. 20% LTV to 70% LTV. Seems hard like I could have huge regrets if we are on the precipice of a dot com bust.  Investing in VT/VTI.  Mentally you have to just keep telling yourself its the right decision and the math works?
Choose a good asset allocation IMO. See link below, showing 100% VTSA(M)X, the Buffet Portfolio, my version of the Three Fund Portfolio, and my version of the No-Brainer Portfolio. Recently everyone has been dwelling on the hockey-stick ending of the US-stock heavy portfolios:
https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=1985&firstMonth=1&endYear=2021&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&benchmark=-1&benchmarkSymbol=VTSMX&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=VTSMX&allocation1_1=45&symbol2=VGTSX&allocation2_1=30&allocation2_2=25&symbol3=VBMFX&allocation3_1=25&symbol4=VFITX&allocation4_2=25&symbol5=DFSVX&allocation5_2=25&symbol6=VFINX&allocation6_2=25&allocation6_3=90&symbol7=VFISX&allocation7_3=10

But no-one seems to remember this period:
https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=2000&firstMonth=1&endYear=2016&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&benchmark=-1&benchmarkSymbol=VTSMX&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=VTSMX&allocation1_1=45&symbol2=VGTSX&allocation2_1=30&allocation2_2=25&symbol3=VBMFX&allocation3_1=25&symbol4=VFITX&allocation4_2=25&symbol5=DFSVX&allocation5_2=25&symbol6=VFINX&allocation6_2=25&allocation6_3=90&symbol7=VFISX&allocation7_3=10

Personally I'd choose the red line.
« Last Edit: September 11, 2021, 02:09:34 PM by Radagast »

JJ-

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Re: DONT Payoff your Mortgage Club
« Reply #2891 on: September 11, 2021, 07:38:51 PM »
I'm about to do a big cash out Refi. From 8 years left on a 15yr to new 30yr. 20% LTV to 70% LTV. Seems hard like I could have huge regrets if we are on the precipice of a dot com bust.  Investing in VT/VTI.  Mentally you have to just keep telling yourself its the right decision and the math works?
Choose a good asset allocation IMO. See link below, showing 100% VTSA(M)X, the Buffet Portfolio, my version of the Three Fund Portfolio, and my version of the No-Brainer Portfolio. Recently everyone has been dwelling on the hockey-stick ending of the US-stock heavy portfolios:
https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=1985&firstMonth=1&endYear=2021&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&benchmark=-1&benchmarkSymbol=VTSMX&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=VTSMX&allocation1_1=45&symbol2=VGTSX&allocation2_1=30&allocation2_2=25&symbol3=VBMFX&allocation3_1=25&symbol4=VFITX&allocation4_2=25&symbol5=DFSVX&allocation5_2=25&symbol6=VFINX&allocation6_2=25&allocation6_3=90&symbol7=VFISX&allocation7_3=10

But no-one seems to remember this period:
https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=2000&firstMonth=1&endYear=2016&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&benchmark=-1&benchmarkSymbol=VTSMX&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=VTSMX&allocation1_1=45&symbol2=VGTSX&allocation2_1=30&allocation2_2=25&symbol3=VBMFX&allocation3_1=25&symbol4=VFITX&allocation4_2=25&symbol5=DFSVX&allocation5_2=25&symbol6=VFINX&allocation6_2=25&allocation6_3=90&symbol7=VFISX&allocation7_3=10

Personally I'd choose the red line.

Probably a simple question, but why the s&p 500 over VTSAX? Is it for the large cap/small cap mix to cut out mid caps?

I also need to do more reading/research into intermediate term vs long term treasuries.

Radagast

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Re: DONT Payoff your Mortgage Club
« Reply #2892 on: September 11, 2021, 10:24:47 PM »
I'm about to do a big cash out Refi. From 8 years left on a 15yr to new 30yr. 20% LTV to 70% LTV. Seems hard like I could have huge regrets if we are on the precipice of a dot com bust.  Investing in VT/VTI.  Mentally you have to just keep telling yourself its the right decision and the math works?
Choose a good asset allocation IMO. See link below, showing 100% VTSA(M)X, the Buffet Portfolio, my version of the Three Fund Portfolio, and my version of the No-Brainer Portfolio. Recently everyone has been dwelling on the hockey-stick ending of the US-stock heavy portfolios:
https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=1985&firstMonth=1&endYear=2021&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&benchmark=-1&benchmarkSymbol=VTSMX&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=VTSMX&allocation1_1=45&symbol2=VGTSX&allocation2_1=30&allocation2_2=25&symbol3=VBMFX&allocation3_1=25&symbol4=VFITX&allocation4_2=25&symbol5=DFSVX&allocation5_2=25&symbol6=VFINX&allocation6_2=25&allocation6_3=90&symbol7=VFISX&allocation7_3=10

But no-one seems to remember this period:
https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=2000&firstMonth=1&endYear=2016&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&benchmark=-1&benchmarkSymbol=VTSMX&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=VTSMX&allocation1_1=45&symbol2=VGTSX&allocation2_1=30&allocation2_2=25&symbol3=VBMFX&allocation3_1=25&symbol4=VFITX&allocation4_2=25&symbol5=DFSVX&allocation5_2=25&symbol6=VFINX&allocation6_2=25&allocation6_3=90&symbol7=VFISX&allocation7_3=10

Personally I'd choose the red line.

Probably a simple question, but why the s&p 500 over VTSAX? Is it for the large cap/small cap mix to cut out mid caps?

I also need to do more reading/research into intermediate term vs long term treasuries.
No reason really. The two portfolios with S&P500 were by Bernstein and Buffet and were supposed to be very simple, easily accessible, with common appeal so they said S&P500 (which pretty much any 401K has). In fact the S&P500 is probably the weakest of the large/total market funds, but only by a few basis points.
https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=1985&firstMonth=1&endYear=2021&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&benchmark=-1&benchmarkSymbol=SCHB&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=SCHX&allocation1_1=100&symbol2=VFIAX&allocation2_2=100&symbol3=VTI&allocation3_3=100

All the linked portfolios I posted above used total market, intermediate, or short term bonds. It would not be tax efficient to use long term bonds in a taxable account and long term muni bonds are callable, so not really long term. I do use long term in my tax advantaged accounts.

JJ-

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Re: DONT Payoff your Mortgage Club
« Reply #2893 on: September 12, 2021, 07:50:43 AM »
I'm about to do a big cash out Refi. From 8 years left on a 15yr to new 30yr. 20% LTV to 70% LTV. Seems hard like I could have huge regrets if we are on the precipice of a dot com bust.  Investing in VT/VTI.  Mentally you have to just keep telling yourself its the right decision and the math works?
Choose a good asset allocation IMO. See link below, showing 100% VTSA(M)X, the Buffet Portfolio, my version of the Three Fund Portfolio, and my version of the No-Brainer Portfolio. Recently everyone has been dwelling on the hockey-stick ending of the US-stock heavy portfolios:
https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=1985&firstMonth=1&endYear=2021&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&benchmark=-1&benchmarkSymbol=VTSMX&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=VTSMX&allocation1_1=45&symbol2=VGTSX&allocation2_1=30&allocation2_2=25&symbol3=VBMFX&allocation3_1=25&symbol4=VFITX&allocation4_2=25&symbol5=DFSVX&allocation5_2=25&symbol6=VFINX&allocation6_2=25&allocation6_3=90&symbol7=VFISX&allocation7_3=10

But no-one seems to remember this period:
https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=2000&firstMonth=1&endYear=2016&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&benchmark=-1&benchmarkSymbol=VTSMX&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=VTSMX&allocation1_1=45&symbol2=VGTSX&allocation2_1=30&allocation2_2=25&symbol3=VBMFX&allocation3_1=25&symbol4=VFITX&allocation4_2=25&symbol5=DFSVX&allocation5_2=25&symbol6=VFINX&allocation6_2=25&allocation6_3=90&symbol7=VFISX&allocation7_3=10

Personally I'd choose the red line.

Probably a simple question, but why the s&p 500 over VTSAX? Is it for the large cap/small cap mix to cut out mid caps?

I also need to do more reading/research into intermediate term vs long term treasuries.
No reason really. The two portfolios with S&P500 were by Bernstein and Buffet and were supposed to be very simple, easily accessible, with common appeal so they said S&P500 (which pretty much any 401K has). In fact the S&P500 is probably the weakest of the large/total market funds, but only by a few basis points.
https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=1985&firstMonth=1&endYear=2021&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&benchmark=-1&benchmarkSymbol=SCHB&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=SCHX&allocation1_1=100&symbol2=VFIAX&allocation2_2=100&symbol3=VTI&allocation3_3=100

All the linked portfolios I posted above used total market, intermediate, or short term bonds. It would not be tax efficient to use long term bonds in a taxable account and long term muni bonds are callable, so not really long term. I do use long term in my tax advantaged accounts.

Your preferred red line in the second period comes from a portfolio with intermediate term bonds. Me saying that was me going"i need to figure out why he prefers that lineup as is there something special with intermediate term".maybe there's nothing special about which set of bonds but just to include them.

Radagast

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Re: DONT Payoff your Mortgage Club
« Reply #2894 on: September 12, 2021, 01:36:06 PM »
Your preferred red line in the second period comes from a portfolio with intermediate term bonds. Me saying that was me going"i need to figure out why he prefers that lineup as is there something special with intermediate term".maybe there's nothing special about which set of bonds but just to include them.
It was mostly just because I tweaked the portfolio to match what Bernstein actually preaches, which is no credit risk in bonds, so I switched it from total bond to intermediate treasury. Probably it is important just to include bonds, but I do think there is a nice benefit to intermediate or long term bonds because duration risk is a separate risk from credit/stock risk, plus that after a few years intermediate will always return more money. However Bernstein, also dumps on duration risk, saying bonds should be riskless and therefore only short term government bonds need apply. But in this case there is close to a 100% chance that short term bonds will be a detriment to a portfolio which is trying to outrun a mortgage. Both terms give a chance at rebalancing, but intermediate bonds might plausibly go up a little during a rebalancing event.

Flyingstache

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Re: DONT Payoff your Mortgage Club
« Reply #2895 on: September 13, 2021, 09:15:55 AM »
With the short time frame, I'm thinking "eh either way". If you knew for sure you'd keep it for a long time, either living in it or eventually rent it out, then seems like a no-brainer to me to do the refinance. If you might sell in 2 years, that reduces the certainty the market will do better than your interest rate vs. just getting a larger check when you close on the sale.

Have you gotten detailed quotes on refinancing? What terms are available to you?

Just an update. I have yet to find anyone offering no closing costs but have found some under $300 for closing costs. Also was quoted today the following rates

30yrs - 2.875%
15yrs - 2.125%
10yrs - 1.99%

But that was for $2k closing costs

Kind of unsure what to do at this time!

JJ-

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Re: DONT Payoff your Mortgage Club
« Reply #2896 on: September 13, 2021, 09:43:59 AM »
With the short time frame, I'm thinking "eh either way". If you knew for sure you'd keep it for a long time, either living in it or eventually rent it out, then seems like a no-brainer to me to do the refinance. If you might sell in 2 years, that reduces the certainty the market will do better than your interest rate vs. just getting a larger check when you close on the sale.

Have you gotten detailed quotes on refinancing? What terms are available to you?

Just an update. I have yet to find anyone offering no closing costs but have found some under $300 for closing costs. Also was quoted today the following rates

30yrs - 2.875%
15yrs - 2.125%
10yrs - 1.99%

But that was for $2k closing costs

Kind of unsure what to do at this time!

Sometimes the lowest rate offered has you paying points. The "no cost" refis are when the closing costs ~= the credits offered by the lender for a higher rate. $2k for closing costs seems about right.

mntnmn117

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Re: DONT Payoff your Mortgage Club
« Reply #2897 on: September 13, 2021, 12:05:11 PM »
I'm about to do a big cash out Refi. From 8 years left on a 15yr to new 30yr. 20% LTV to 70% LTV. Seems hard like I could have huge regrets if we are on the precipice of a dot com bust.  Investing in VT/VTI.  Mentally you have to just keep telling yourself its the right decision and the math works?
Choose a good asset allocation IMO. See link below, showing 100% VTSA(M)X, the Buffet Portfolio, my version of the Three Fund Portfolio, and my version of the No-Brainer Portfolio. Recently everyone has been dwelling on the hockey-stick ending of the US-stock heavy portfolios:
https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=1985&firstMonth=1&endYear=2021&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&benchmark=-1&benchmarkSymbol=VTSMX&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=VTSMX&allocation1_1=45&symbol2=VGTSX&allocation2_1=30&allocation2_2=25&symbol3=VBMFX&allocation3_1=25&symbol4=VFITX&allocation4_2=25&symbol5=DFSVX&allocation5_2=25&symbol6=VFINX&allocation6_2=25&allocation6_3=90&symbol7=VFISX&allocation7_3=10

But no-one seems to remember this period:
https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=2000&firstMonth=1&endYear=2016&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&benchmark=-1&benchmarkSymbol=VTSMX&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=VTSMX&allocation1_1=45&symbol2=VGTSX&allocation2_1=30&allocation2_2=25&symbol3=VBMFX&allocation3_1=25&symbol4=VFITX&allocation4_2=25&symbol5=DFSVX&allocation5_2=25&symbol6=VFINX&allocation6_2=25&allocation6_3=90&symbol7=VFISX&allocation7_3=10

Personally I'd choose the red line.

Probably a simple question, but why the s&p 500 over VTSAX? Is it for the large cap/small cap mix to cut out mid caps?

I also need to do more reading/research into intermediate term vs long term treasuries.
No reason really. The two portfolios with S&P500 were by Bernstein and Buffet and were supposed to be very simple, easily accessible, with common appeal so they said S&P500 (which pretty much any 401K has). In fact the S&P500 is probably the weakest of the large/total market funds, but only by a few basis points.
https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=1985&firstMonth=1&endYear=2021&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&benchmark=-1&benchmarkSymbol=SCHB&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=SCHX&allocation1_1=100&symbol2=VFIAX&allocation2_2=100&symbol3=VTI&allocation3_3=100

All the linked portfolios I posted above used total market, intermediate, or short term bonds. It would not be tax efficient to use long term bonds in a taxable account and long term muni bonds are callable, so not really long term. I do use long term in my tax advantaged accounts.

Your preferred red line in the second period comes from a portfolio with intermediate term bonds. Me saying that was me going"i need to figure out why he prefers that lineup as is there something special with intermediate term".maybe there's nothing special about which set of bonds but just to include them.

Thanks, yeah the last few years have made bonds seem useless but its the rebalancing in a down market is where they bring their value.

Flyingstache

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Re: DONT Payoff your Mortgage Club
« Reply #2898 on: September 13, 2021, 06:12:35 PM »
From the quotes above the principal & interest payments would be as follows. This was based on a cash out of $20k (the lender just used this as an example) for a loan amount of $115k

30yr - $477 PI
15yr - $746 PI
10yr - $1,058 PI

We are currently paying $712 PI. Based on the quotes above we could make it work for all of those options.

We could do a larger cash out amount (especially if doing the 30yr option) & likely would put the majority of the money into VTSAX which is where all of our money goes in the stock market after we max out our Roth IRAs.

Closing costs for all of the above options would be $2k. Rates would be the same if we didn't do the cash out option & just went straight refi.

Any thoughts or suggestions?

bacchi

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Re: DONT Payoff your Mortgage Club
« Reply #2899 on: September 13, 2021, 06:20:56 PM »
From the quotes above the principal & interest payments would be as follows. This was based on a cash out of $20k (the lender just used this as an example) for a loan amount of $115k

30yr - $477 PI
15yr - $746 PI
10yr - $1,058 PI

We are currently paying $712 PI. Based on the quotes above we could make it work for all of those options.

We could do a larger cash out amount (especially if doing the 30yr option) & likely would put the majority of the money into VTSAX which is where all of our money goes in the stock market after we max out our Roth IRAs.

Closing costs for all of the above options would be $2k. Rates would be the same if we didn't do the cash out option & just went straight refi.

Any thoughts or suggestions?

In the other thread, I think you wrote that your current 15 year rate was 2.75%. What's the 30 year rate that you're being offered?