Author Topic: DONT Payoff your Mortgage Club  (Read 414801 times)

cryptoroger

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Re: DONT Payoff your Mortgage Club
« Reply #2300 on: August 05, 2020, 09:34:25 AM »
So i'm about four years into a 30 year fixed loan at 3.375%, original loan was $494K

We actually paid a big chunk of mortgage (i know i know...my wife is very risk averse) so we are at $405K now.

I can get a new 30 year at 2.865% with no fees or a new 30 year at 2.625% with $2000 in closing costs.

Aside from saving on the interest, we would also cut down principal pmt significantly due to reduction in principal balance, so ultimately payment drops by around $500 in 2.865 scenario.

Note, my wife just got laid off, so i also don't mind having a lower monthly payment.

What do you think?

FIreDrill

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Re: DONT Payoff your Mortgage Club
« Reply #2301 on: August 05, 2020, 09:53:19 AM »
So i'm about four years into a 30 year fixed loan at 3.375%, original loan was $494K

We actually paid a big chunk of mortgage (i know i know...my wife is very risk averse) so we are at $405K now.

I can get a new 30 year at 2.865% with no fees or a new 30 year at 2.625% with $2000 in closing costs.

Aside from saving on the interest, we would also cut down principal pmt significantly due to reduction in principal balance, so ultimately payment drops by around $500 in 2.865 scenario.

Note, my wife just got laid off, so i also don't mind having a lower monthly payment.

What do you think?

Have you shopped around to multiple lenders?  I think you may be able to get a slightly lower rate.  LoanDepot will usually best any estimate by at least 500.

Im a fan of lowering monthly debt obligations and increasing available assets that are fairly liquid like investments in a taxable brokerage account so I would def go for it.  I try to stay away from paying closing costs because if rates continue to tank then that is a sunk cost.  You can always refi again in 6 months if rates are substantially lower.

cryptoroger

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Re: DONT Payoff your Mortgage Club
« Reply #2302 on: August 05, 2020, 10:09:34 AM »
So i'm about four years into a 30 year fixed loan at 3.375%, original loan was $494K

We actually paid a big chunk of mortgage (i know i know...my wife is very risk averse) so we are at $405K now.

I can get a new 30 year at 2.865% with no fees or a new 30 year at 2.625% with $2000 in closing costs.

Aside from saving on the interest, we would also cut down principal pmt significantly due to reduction in principal balance, so ultimately payment drops by around $500 in 2.865 scenario.

Note, my wife just got laid off, so i also don't mind having a lower monthly payment.

What do you think?

Have you shopped around to multiple lenders?  I think you may be able to get a slightly lower rate.  LoanDepot will usually best any estimate by at least 500.

Im a fan of lowering monthly debt obligations and increasing available assets that are fairly liquid like investments in a taxable brokerage account so I would def go for it.  I try to stay away from paying closing costs because if rates continue to tank then that is a sunk cost.  You can always refi again in 6 months if rates are substantially lower.

wow no i didn't...i'm surprised as these rates seemed pretty good.  I'll try Loan Depot though, thank you!

FIreDrill

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Re: DONT Payoff your Mortgage Club
« Reply #2303 on: August 05, 2020, 10:12:06 AM »
So i'm about four years into a 30 year fixed loan at 3.375%, original loan was $494K

We actually paid a big chunk of mortgage (i know i know...my wife is very risk averse) so we are at $405K now.

I can get a new 30 year at 2.865% with no fees or a new 30 year at 2.625% with $2000 in closing costs.

Aside from saving on the interest, we would also cut down principal pmt significantly due to reduction in principal balance, so ultimately payment drops by around $500 in 2.865 scenario.

Note, my wife just got laid off, so i also don't mind having a lower monthly payment.

What do you think?

Have you shopped around to multiple lenders?  I think you may be able to get a slightly lower rate.  LoanDepot will usually best any estimate by at least 500.

Im a fan of lowering monthly debt obligations and increasing available assets that are fairly liquid like investments in a taxable brokerage account so I would def go for it.  I try to stay away from paying closing costs because if rates continue to tank then that is a sunk cost.  You can always refi again in 6 months if rates are substantially lower.

wow no i didn't...i'm surprised as these rates seemed pretty good.  I'll try Loan Depot though, thank you!

They are def competitive rates but you never know.  I am locked into a no cost refi at 2.75 right now for a 30yr conventional. I think I got around 3500 in lender credits for this rate which will cover lender fees and even part of my escrow.

cryptoroger

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Re: DONT Payoff your Mortgage Club
« Reply #2304 on: August 05, 2020, 10:30:15 AM »
So i'm about four years into a 30 year fixed loan at 3.375%, original loan was $494K

We actually paid a big chunk of mortgage (i know i know...my wife is very risk averse) so we are at $405K now.

I can get a new 30 year at 2.865% with no fees or a new 30 year at 2.625% with $2000 in closing costs.

Aside from saving on the interest, we would also cut down principal pmt significantly due to reduction in principal balance, so ultimately payment drops by around $500 in 2.865 scenario.

Note, my wife just got laid off, so i also don't mind having a lower monthly payment.

What do you think?

Have you shopped around to multiple lenders?  I think you may be able to get a slightly lower rate.  LoanDepot will usually best any estimate by at least 500.

Im a fan of lowering monthly debt obligations and increasing available assets that are fairly liquid like investments in a taxable brokerage account so I would def go for it.  I try to stay away from paying closing costs because if rates continue to tank then that is a sunk cost.  You can always refi again in 6 months if rates are substantially lower.

wow no i didn't...i'm surprised as these rates seemed pretty good.  I'll try Loan Depot though, thank you!

They are def competitive rates but you never know.  I am locked into a no cost refi at 2.75 right now for a 30yr conventional. I think I got around 3500 in lender credits for this rate which will cover lender fees and even part of my escrow.

yeah that 2.865 loan includes a $2500 lender credit, but i'd love 2.75 at 3500! Nice work.

rmorris50

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Re: DONT Payoff your Mortgage Club
« Reply #2305 on: August 14, 2020, 05:23:59 AM »
I locked in a 30-yr fix yesterday at 2.49%, no points. Say what? Iím still in disbelief. I am never pre-paying that puppy.


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UnleashHell

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Re: DONT Payoff your Mortgage Club
« Reply #2306 on: August 14, 2020, 06:27:41 AM »
I have failed.
I paid off not one but 2 mortgages!!!! I beg forgiveness!

however they were ones i was paying on the former marital home as part of the divorce settlement agreement - i had no equity attached to them and I also had to pay house insurance and property tax as part of the deal. That's now gone too.

Now to refinance the current house mortgage that I got a year ago - as soon as the 2 mortgages show as paid from my record.
the refi will be a 30year and as low a rate as I can get.

LWYRUP

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Re: DONT Payoff your Mortgage Club
« Reply #2307 on: August 14, 2020, 06:51:41 AM »
I locked in a 30-yr fix yesterday at 2.49%, no points. Say what? Iím still in disbelief. I am never pre-paying that puppy.


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Amazing!  @ender I know you were looking for this rate to see who the lender was.

rmorris50

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Re: DONT Payoff your Mortgage Club
« Reply #2308 on: August 14, 2020, 07:22:34 AM »
I locked in a 30-yr fix yesterday at 2.49%, no points. Say what? Iím still in disbelief. I am never pre-paying that puppy.


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Amazing!  @ender I know you were looking for this rate to see who the lender was.
Itís with Fairway. Iíve always used Chase before so I donít much about Fairway reputationally.


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Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #2309 on: August 14, 2020, 08:43:39 AM »
I locked in a 30-yr fix yesterday at 2.49%, no points. Say what? Iím still in disbelief. I am never pre-paying that puppy.


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Amazing!  @ender I know you were looking for this rate to see who the lender was.
Itís with Fairway. Iíve always used Chase before so I donít much about Fairway reputationally.
At that rate, who cares? This is particularly true if you don't do an impound account. @UnleashHell, come in please..

BTW, under the circumstances, UH, those were not "your" mortgages, so I again I offer my heartiest Ccongratulations! For anyone who might be confused by this, I highly recommend Unleash Hell's always-interesting journal.

UnleashHell

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Re: DONT Payoff your Mortgage Club
« Reply #2310 on: August 14, 2020, 08:48:53 AM »
thanks @Dicey to be clear - I also held assets that matched the mortgages - at the time of that agreement.
Now I'm Just down to two 30 year mortgages!!

rmorris50

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Re: DONT Payoff your Mortgage Club
« Reply #2311 on: August 14, 2020, 08:49:56 AM »
I locked in a 30-yr fix yesterday at 2.49%, no points. Say what? Iím still in disbelief. I am never pre-paying that puppy.


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Amazing!  @ender I know you were looking for this rate to see who the lender was.
Itís with Fairway. Iíve always used Chase before so I donít much about Fairway reputationally.
At that rate, who cares? This is particularly true if you don't do an impound account. @UnleashHell, come in please..

BTW, under the circumstances, UH, those were not "your" mortgages, so I again I offer my heartiest Ccongratulations! For anyone who might be confused by this, I highly recommend Unleash Hell's always-interesting journal.
I am putting down 20%. Is it common for lenders to drop the impound if asked? Iíve never thought to do this. What are pros and cons? No escrow then and not worry about lender messing up paying? But them itís not nice one pmt. but i like the idea of no impound if possible, I think....


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FIreDrill

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Re: DONT Payoff your Mortgage Club
« Reply #2312 on: August 14, 2020, 09:35:36 AM »
So with rates dropping I shopped around some more and got another competing offer for the following.

596k
30yr
2.75%
0 points
0 lender fees
Appraisal waiver
566 lender credit towards escrow.
Washington state

So essentially they will pay me 566 to refinance from 3.5% to 2.75%. I told them I am shopping around but we locked the rate.  I'll be taking this offer to the other lender and asking them to beat it and the new lender was totally fine knowing I was using them as a bargaining chip.

It's getting crazy out there....

Just signed the paperwork on this refi yesterday.  Funds should be distributed early next week.

Congrats to everyone taking advantage of these low rates! Our next refinance threshold will be 2-2.5% for a 30yr.

We bought our house a little over two years ago and our mortgage payment has dropped by 20% since then which is crazy and lucky for us since we live in a HCOL area.  Just gives us more money to dump into the market!

Happy Friday all!

rmorris50

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Re: DONT Payoff your Mortgage Club
« Reply #2313 on: August 14, 2020, 09:40:29 AM »
.25% up front charge if I donít want to have an escrow account. UGH doesnít seem worth it.


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LWYRUP

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Re: DONT Payoff your Mortgage Club
« Reply #2314 on: August 14, 2020, 09:42:25 AM »
.25% up front charge if I donít want to have an escrow account. UGH doesnít seem worth it.


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A lot of times you can just call them up a year later and get them to waive it then.

I'm closing with escrows just because it's easier to process for the lender (it makes them feel safer) and then after closing I'll probably waive them. 

TomTX

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Re: DONT Payoff your Mortgage Club
« Reply #2315 on: August 14, 2020, 12:35:16 PM »
I am putting down 20%. Is it common for lenders to drop the impound if asked? Iíve never thought to do this. What are pros and cons? No escrow then and not worry about lender messing up paying? But them itís not nice one pmt. but i like the idea of no impound if possible, I think....

Pro: Mortgage payment never changes.
Pro: More direct control/oversight on taxes/insurance getting paid
Pro: Excellent method of spend for getting signup bonuses on premium credit cards.


rmorris50

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Re: DONT Payoff your Mortgage Club
« Reply #2316 on: August 14, 2020, 01:00:27 PM »
I am putting down 20%. Is it common for lenders to drop the impound if asked? Iíve never thought to do this. What are pros and cons? No escrow then and not worry about lender messing up paying? But them itís not nice one pmt. but i like the idea of no impound if possible, I think....

Pro: Mortgage payment never changes.
Pro: More direct control/oversight on taxes/insurance getting paid
Pro: Excellent method of spend for getting signup bonuses on premium credit cards.
Iíll close with an escrow and look to drop in the future. Between the cost and the making the close smoother with the lender, seems the better way to go.


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Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #2317 on: August 14, 2020, 04:05:58 PM »
.25% up front charge if I donít want to have an escrow account. UGH doesnít seem worth it.


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That's 100% bullshit. I'd want to get up in someone's bidness to get a straight answer on that one. What? I'm doing something that's LESS work for you and you want to charge me more? I'd at least call around to a few other lenders.

rmorris50

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Re: DONT Payoff your Mortgage Club
« Reply #2318 on: August 14, 2020, 08:04:27 PM »
.25% up front charge if I donít want to have an escrow account. UGH doesnít seem worth it.


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That's 100% bullshit. I'd want to get up in someone's bidness to get a straight answer on that one. What? I'm doing something that's LESS work for you and you want to charge me more? I'd at least call around to a few other lenders.
While I with ya in spirit, I have so much other stuff going on in my life and I am not so anti-escrow that Iíll let this slide. Maybe if the bank were to call in an ďimpoundĒ account instead Iíd throw a fit ;-)


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RainyDay

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Re: DONT Payoff your Mortgage Club
« Reply #2319 on: August 17, 2020, 08:51:20 AM »
So with rates dropping I shopped around some more and got another competing offer for the following.

596k
30yr
2.75%
0 points
0 lender fees
Appraisal waiver
566 lender credit towards escrow.
Washington state

So essentially they will pay me 566 to refinance from 3.5% to 2.75%. I told them I am shopping around but we locked the rate.  I'll be taking this offer to the other lender and asking them to beat it and the new lender was totally fine knowing I was using them as a bargaining chip.

It's getting crazy out there....

Just signed the paperwork on this refi yesterday.  Funds should be distributed early next week.

Congrats to everyone taking advantage of these low rates! Our next refinance threshold will be 2-2.5% for a 30yr.

We bought our house a little over two years ago and our mortgage payment has dropped by 20% since then which is crazy and lucky for us since we live in a HCOL area.  Just gives us more money to dump into the market!

Happy Friday all!

Wow!  We refinanced back in April/May to a 20 year with a 2.875%.  I was SO excited!  We had only been ~3 years into a 30 year, and our overall payment only went up about $65 a month.  And now rates are even lower.  You guys are inspirational!

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #2320 on: August 17, 2020, 09:16:41 AM »
Pulling paperwork together for my refi, I had to literally climb stairs and run the scanner (page-by-page) to get paper statements onto an old desktop computer in the upstairs. Do I get extra mustachian points for using a 2008 desktop to apply for my 2020-bond-market mortgage?

Jack0Life

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Re: DONT Payoff your Mortgage Club
« Reply #2321 on: August 18, 2020, 12:28:41 AM »
I locked in a 30-yr fix yesterday at 2.49%, no points. Say what? Iím still in disbelief. I am never pre-paying that puppy.


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Where from ??

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #2322 on: August 18, 2020, 07:52:26 AM »
My wife said some mortgage rule change went into effect over the weekend and rates popped back up. Can any of you confirm this?

SwordGuy

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Re: DONT Payoff your Mortgage Club
« Reply #2323 on: August 18, 2020, 07:59:11 AM »
My wife said some mortgage rule change went into effect over the weekend and rates popped back up. Can any of you confirm this?

Just looked on Pen Fed's site and they have the lowest I've ever seen, 2.25% for a 15 year and 2.5% for a 30 year.

rmorris50

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Re: DONT Payoff your Mortgage Club
« Reply #2324 on: August 18, 2020, 09:24:19 AM »
I locked in a 30-yr fix yesterday at 2.49%, no points. Say what? Iím still in disbelief. I am never pre-paying that puppy.


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Where from ??
Fairway, locked on 8/14


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rmorris50

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Re: DONT Payoff your Mortgage Club
« Reply #2325 on: August 18, 2020, 09:25:28 AM »
My wife said some mortgage rule change went into effect over the weekend and rates popped back up. Can any of you confirm this?
My broker alluded to this last Friday, she locked me in at 2.5 30yr fixed and said market popped back up very shortly thereafter


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achv_fcku-mny

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Re: DONT Payoff your Mortgage Club
« Reply #2326 on: August 18, 2020, 12:19:26 PM »
My wife said some mortgage rule change went into effect over the weekend and rates popped back up. Can any of you confirm this?

I think refinances will be tacked with additional .25% in fees starting in September I believe. They donít affect loans in process

FIreDrill

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Re: DONT Payoff your Mortgage Club
« Reply #2327 on: August 19, 2020, 10:40:15 AM »
So with rates dropping I shopped around some more and got another competing offer for the following.

596k
30yr
2.75%
0 points
0 lender fees
Appraisal waiver
566 lender credit towards escrow.
Washington state

So essentially they will pay me 566 to refinance from 3.5% to 2.75%. I told them I am shopping around but we locked the rate.  I'll be taking this offer to the other lender and asking them to beat it and the new lender was totally fine knowing I was using them as a bargaining chip.

It's getting crazy out there....

Just signed the paperwork on this refi yesterday.  Funds should be distributed early next week.

Congrats to everyone taking advantage of these low rates! Our next refinance threshold will be 2-2.5% for a 30yr.

We bought our house a little over two years ago and our mortgage payment has dropped by 20% since then which is crazy and lucky for us since we live in a HCOL area.  Just gives us more money to dump into the market!

Happy Friday all!

Funds are distributed and I officially have a 2.75% 30yr mortgage!

I was just comparing our first mortgage on this house to our latest refinance and our first mortgage we were paying 28.5k in interest per year and 9.3k in principle with a 4.75% rate two years ago.  Now we are paying 16.5k in interest and 13.2k in principle per year.  Such a crazy difference.... If we ever get down to 2.25% we will be paying more principal pay down than interest on a yearly basis which would be crazy.  Let's hope rates go lower for refi #4! 😂

dragoncar

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Re: DONT Payoff your Mortgage Club
« Reply #2328 on: August 19, 2020, 07:09:38 PM »
I've got rate FOMO.  Pulled the trigger too early... but now it's too late.  Congrats to those who got the magic window.

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #2329 on: August 19, 2020, 07:25:21 PM »
I am playing with fire the other direction, @dragoncar. Received quotes today, but Mrs. TallTexan just feeling so overwhelmed by the joint demands of work and kids' school that she doesn't want to make a move right now (No disagreement with me). Of course part of me is worried that our window will close, but the logical part of me knows these are not decisions that you rush.

FIreDrill

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Re: DONT Payoff your Mortgage Club
« Reply #2330 on: August 19, 2020, 10:26:53 PM »
I've got rate FOMO.  Pulled the trigger too early... but now it's too late.  Congrats to those who got the magic window.

Hey, rates could go lower.  You never know!

dragoncar

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Re: DONT Payoff your Mortgage Club
« Reply #2331 on: August 19, 2020, 10:55:11 PM »
I am playing with fire the other direction, @dragoncar. Received quotes today, but Mrs. TallTexan just feeling so overwhelmed by the joint demands of work and kids' school that she doesn't want to make a move right now (No disagreement with me). Of course part of me is worried that our window will close, but the logical part of me knows these are not decisions that you rush.

Hey, rates could go lower.  You never know!

I don't know why, but my gut says rates will stay low/lower over the next year.  My refinancing process was relatively simple but still a pain.  It's just not a pleasant thing to be constantly responding to document requests.  That's like... a job.  I can understand why you wouldn't want to deal with it.

FIreDrill

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Re: DONT Payoff your Mortgage Club
« Reply #2332 on: August 19, 2020, 11:34:39 PM »
I am playing with fire the other direction, @dragoncar. Received quotes today, but Mrs. TallTexan just feeling so overwhelmed by the joint demands of work and kids' school that she doesn't want to make a move right now (No disagreement with me). Of course part of me is worried that our window will close, but the logical part of me knows these are not decisions that you rush.

Hey, rates could go lower.  You never know!

I don't know why, but my gut says rates will stay low/lower over the next year.  My refinancing process was relatively simple but still a pain.  It's just not a pleasant thing to be constantly responding to document requests.  That's like... a job.  I can understand why you wouldn't want to deal with it.

I have the same feeling about rates.  I think the 30yr will hover between 2.25 and 3.5 for a year or two.  I sure hope they go lower but we will see.  I've gotten pretty use to the refi process so it usually takes me a couple hours to gather all the necessary documents and then it's usually just waiting on underwriters but it can be time consuming at times.  It's kinda like a game for me so I don't mind lol

Mako52

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Re: DONT Payoff your Mortgage Club
« Reply #2333 on: August 22, 2020, 12:16:46 PM »
Just locked in to  refinance a recent 30yr fixed 3.25% into a 30yr 2.625%.   Seems like a no brainer but who knows whether rates will rise or continue to fall. 

With the lender credit the net net cost is around $300, if you add A + B + C + E costs in the loan disclosure and compare to lender credits in J. 

Interest savings between now and expected move date: $19.7k

Decrease in mortgage balance at expected move date: $8.8k

Reduction in P&I payments between now and expected move date: $15.7k
« Last Edit: August 25, 2020, 12:06:31 PM by Mako52 »

bacchi

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Re: DONT Payoff your Mortgage Club
« Reply #2334 on: August 22, 2020, 12:36:13 PM »
Funds are distributed and I officially have a 2.75% 30yr mortgage!

Damn...I'm envious.

I wonder if I can get a refi based on rental income alone.

Psychstache

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Re: DONT Payoff your Mortgage Club
« Reply #2335 on: August 25, 2020, 03:13:35 PM »
Quick question for the DPOYM brain trust:

I'm about to sign off on a refi (30yr @ 3.875% with a nice lender credit) on 9/3. The lender sent loan officer was asking me some final questions and one was about pending payments. I said that I will have a payment going through at the beginning of the month,  so the balance would change and he said to me that since we are doing the refi within a few days that I should just skip my upcoming September payment with my current lender. Thoughts?

achv_fcku-mny

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Re: DONT Payoff your Mortgage Club
« Reply #2336 on: August 25, 2020, 03:46:54 PM »
Quick question for the DPOYM brain trust:

I'm about to sign off on a refi (30yr @ 3.875% with a nice lender credit) on 9/3. The lender sent loan officer was asking me some final questions and one was about pending payments. I said that I will have a payment going through at the beginning of the month,  so the balance would change and he said to me that since we are doing the refi within a few days that I should just skip my upcoming September payment with my current lender. Thoughts?

I am not sure that is normal, and I think is bad advise. Do not skip any payments. You will get back any excess payments back including interest, principle and escrow. Usually new loan is calculated based on payoff statement you get from previous lender.

You probably already know this, but looks like the rate you are signing up seems little high for current rates we are seeing. I understand YMMV.

FIreDrill

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Re: DONT Payoff your Mortgage Club
« Reply #2337 on: August 25, 2020, 03:59:27 PM »
Quick question for the DPOYM brain trust:

I'm about to sign off on a refi (30yr @ 3.875% with a nice lender credit) on 9/3. The lender sent loan officer was asking me some final questions and one was about pending payments. I said that I will have a payment going through at the beginning of the month,  so the balance would change and he said to me that since we are doing the refi within a few days that I should just skip my upcoming September payment with my current lender. Thoughts?

I am not sure that is normal, and I think is bad advise. Do not skip any payments. You will get back any excess payments back including interest, principle and escrow. Usually new loan is calculated based on payoff statement you get from previous lender.

You probably already know this, but looks like the rate you are signing up seems little high for current rates we are seeing. I understand YMMV.


Agree. Do not cancel your payments until you see a 0.00 balance on the mortgage that you are refinancing away from.  Worst case you overpay and get it back eventually.  If you cancel, the worst case is a missed payment and then messing up your credit for years to come potentially.


desert_phoenix

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Re: DONT Payoff your Mortgage Club
« Reply #2338 on: August 25, 2020, 04:00:52 PM »
I have a 30 year at 3.75 I got about 14 months ago. VA loan, nothing down. I am....kind of just okay keeping it. The cash I'd need to cover the IRRRL and all would seriously deplete my savings and everything. So I think I will just be that person with the not amazing mortgage rate for the next 28 years and change, haha.

Psychstache

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Re: DONT Payoff your Mortgage Club
« Reply #2339 on: August 25, 2020, 04:32:32 PM »
Quick question for the DPOYM brain trust:

I'm about to sign off on a refi (30yr @ 3.875% with a nice lender credit) on 9/3. The lender sent loan officer was asking me some final questions and one was about pending payments. I said that I will have a payment going through at the beginning of the month,  so the balance would change and he said to me that since we are doing the refi within a few days that I should just skip my upcoming September payment with my current lender. Thoughts?

I am not sure that is normal, and I think is bad advise. Do not skip any payments. You will get back any excess payments back including interest, principle and escrow. Usually new loan is calculated based on payoff statement you get from previous lender.

You probably already know this, but looks like the rate you are signing up seems little high for current rates we are seeing. I understand YMMV.

Yeah, it felt like a weird option.

FYI, the rate look high because it is a typo, it will be a 2.875  =D

dragoncar

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Re: DONT Payoff your Mortgage Club
« Reply #2340 on: August 25, 2020, 04:54:57 PM »
Quick question for the DPOYM brain trust:

I'm about to sign off on a refi (30yr @ 3.875% with a nice lender credit) on 9/3. The lender sent loan officer was asking me some final questions and one was about pending payments. I said that I will have a payment going through at the beginning of the month,  so the balance would change and he said to me that since we are doing the refi within a few days that I should just skip my upcoming September payment with my current lender. Thoughts?

I am not sure that is normal, and I think is bad advise. Do not skip any payments. You will get back any excess payments back including interest, principle and escrow. Usually new loan is calculated based on payoff statement you get from previous lender.

You probably already know this, but looks like the rate you are signing up seems little high for current rates we are seeing. I understand YMMV.


Agree. Do not cancel your payments until you see a 0.00 balance on the mortgage that you are refinancing away from.  Worst case you overpay and get it back eventually.  If you cancel, the worst case is a missed payment and then messing up your credit for years to come potentially.

I wouldnít skip a payment entirely, but most mortgages have a 15 day grace period where you arenít considered to have missed the payment.  I might not pay on the 1st, and make sure the loan is paid off before the 15th.  If on the 10th or so youíve run into closing issues make the payment electronically.  Thatís just me though

The point being, if the mortgage is paid off on September 5th, the bank will treat the incoming funds first as a payment for September and then apply the remaining funds to the mortgage balance.  You wonít have actually missed the payment, it will just have come from the title company, and within the grace period

Psychstache

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Re: DONT Payoff your Mortgage Club
« Reply #2341 on: August 26, 2020, 06:55:32 AM »
I wouldnít skip a payment entirely, but most mortgages have a 15 day grace period where you arenít considered to have missed the payment.  I might not pay on the 1st, and make sure the loan is paid off before the 15th.  If on the 10th or so youíve run into closing issues make the payment electronically.  Thatís just me though

The point being, if the mortgage is paid off on September 5th, the bank will treat the incoming funds first as a payment for September and then apply the remaining funds to the mortgage balance.  You wonít have actually missed the payment, it will just have come from the title company, and within the grace period

Hmm, so I looked into this and I do have the 15 day grace period. I checked my account and compared to the closing disclosure and it would seem you're correct, the projected payoff amount for my loan is equal to my Sept payment + the remaining balance, so it would seem that the Sept payment is rolled into the refi. Interesting.

RWD

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Re: DONT Payoff your Mortgage Club
« Reply #2342 on: August 27, 2020, 06:46:46 AM »
FYI, the rate look high because it is a typo, it will be a 2.875  =D
Awesome!

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #2343 on: September 03, 2020, 12:59:30 AM »
If you had about $900k equity in your house, and could get 2.6% interest on a new loan, would you refinance and take some cash out?  Our home equity is almost 50% of our net worth.

I've always been in the pay of the mortgage asap and stay mortgage-free group, but with rates this low, we're very tempted.  We're also a little nervous to have so much $ tied up in the house.

Bat signal to @Dicey !
I'd have to know a lot more about your finances to determine if you should pull cash out, but you should probably refi your existing mortgage asap. Is this a 15 or 30 year loan? What's your current rate?

habanero

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Re: DONT Payoff your Mortgage Club
« Reply #2344 on: September 03, 2020, 05:57:43 AM »
Is it possible to get a mortgage in the US than cannot be refinanced? Is that a product which exists at all?

Telecaster

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Re: DONT Payoff your Mortgage Club
« Reply #2345 on: September 03, 2020, 09:37:49 AM »
Is it possible to get a mortgage in the US than cannot be refinanced? Is that a product which exists at all?

Sort of.  In some circumstances a loan can have a pre-payment penalty.  You can still refinance, but there can be substantial fees associated with that.   Those are pretty rare and not legal in every state. 

robartsd

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Re: DONT Payoff your Mortgage Club
« Reply #2346 on: September 03, 2020, 11:33:13 AM »
Is it possible to get a mortgage in the US than cannot be refinanced? Is that a product which exists at all?

Sort of.  In some circumstances a loan can have a pre-payment penalty.  You can still refinance, but there can be substantial fees associated with that.   Those are pretty rare and not legal in every state.
Federal law restricts prepayment penalties. Some loans aren't allowed them at all. Those that can have them are limited to 2% of the loan amount in the first two years and 1% of the loan amount in the third year. After three years, no US home mortgage can have a prepayment penalty. Lenders are also required to provide an option without prepayment penalty along side the offer with prepayment penalty. Of course many states impose further restrictions.

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #2347 on: September 03, 2020, 01:58:21 PM »
If you had about $900k equity in your house, and could get 2.6% interest on a new loan, would you refinance and take some cash out?  Our home equity is almost 50% of our net worth.

I've always been in the pay of the mortgage asap and stay mortgage-free group, but with rates this low, we're very tempted.  We're also a little nervous to have so much $ tied up in the house.

Bat signal to @Dicey !
I'd have to know a lot more about your finances to determine if you should pull cash out, but you should probably refi your existing mortgage asap. Is this a 15 or 30 year loan? What's your current rate?
@Dicey - Here is the full picture:  our house is actually paid off, a refi cash-out is the option to tap into the equity.  House value appx. $975k, maybe up to $1m.  We're thinking taking out $500k at 2.6% on a 30-yr fixed loan. 

We would like to relocate to a different state for dh's work in the next couple of years and we would like to buy a house there (3 dogs, like to have our own place, etc.)  The plan would be to get a mortgage on this house to have cash on hand to buy a house when we move.  This house would become a rental and the rent would be more than enough to cover all costs, including mortgage payment.  We do not want to sell this house at this time.  After reading some of the posts on here I'm even thinking that when we buy the other house we try to get a loan there as well if the rates are good.  Then we could invest some of the cash.  We have no debt at this time.

What do you think?  Smart, or stupid, idea?  :)

It sounds like you're proposing going into debt for a goal that may be a few years away. Given the mortgage you're describing, you're probably a very high ($300K+) income household. I can understand the hope to qualify for a mortgage while you still have that income and the property is still a primary residence, if you plan to retire before the end of the economic cycle.

An alternative that may simplify your life would be just to prepare with a home equity line of credit (to be kept at near $0 balance until your move), and pair that with some aggressive saving out of that large income you have.

Do you believe you're behind on saving for retirement and need to catch up with some more skin in the market? People believe rates would shoot up in 2013, yet we're back today just as low.

wildbeast

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Re: DONT Payoff your Mortgage Club
« Reply #2348 on: September 09, 2020, 10:18:33 AM »
If you had about $900k equity in your house, and could get 2.6% interest on a new loan, would you refinance and take some cash out?  Our home equity is almost 50% of our net worth.

I've always been in the pay of the mortgage asap and stay mortgage-free group, but with rates this low, we're very tempted.  We're also a little nervous to have so much $ tied up in the house.

Bat signal to @Dicey !
I'd have to know a lot more about your finances to determine if you should pull cash out, but you should probably refi your existing mortgage asap. Is this a 15 or 30 year loan? What's your current rate?
@Dicey - Here is the full picture:  our house is actually paid off, a refi cash-out is the option to tap into the equity.  House value appx. $975k, maybe up to $1m.  We're thinking taking out $500k at 2.6% on a 30-yr fixed loan. 

We would like to relocate to a different state for dh's work in the next couple of years and we would like to buy a house there (3 dogs, like to have our own place, etc.)  The plan would be to get a mortgage on this house to have cash on hand to buy a house when we move.  This house would become a rental and the rent would be more than enough to cover all costs, including mortgage payment.  We do not want to sell this house at this time.  After reading some of the posts on here I'm even thinking that when we buy the other house we try to get a loan there as well if the rates are good.  Then we could invest some of the cash.  We have no debt at this time.

What do you think?  Smart, or stupid, idea?  :)

It sounds like you're proposing going into debt for a goal that may be a few years away. Given the mortgage you're describing, you're probably a very high ($300K+) income household. I can understand the hope to qualify for a mortgage while you still have that income and the property is still a primary residence, if you plan to retire before the end of the economic cycle.

An alternative that may simplify your life would be just to prepare with a home equity line of credit (to be kept at near $0 balance until your move), and pair that with some aggressive saving out of that large income you have.

Do you believe you're behind on saving for retirement and need to catch up with some more skin in the market? People believe rates would shoot up in 2013, yet we're back today just as low.

@talltexan - thank you for your reply.  I've been mulling this over.  We are not a high-income household.  In fact, relative to where we live, we would be considered a low-income household.  Dh is in non-profit and I am retired, gross income is $80k per year and we live in a very HCOL area.  We are okay on retirement savings.  The fear on our end is that we would not be able to qualify for a decent mortgage if dh leaves his job and we have to qualify with a similar salary but with a brand new job, I understand that length of employment is a big issue on new loans.

nereo

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Re: DONT Payoff your Mortgage Club
« Reply #2349 on: September 09, 2020, 10:31:56 AM »

@talltexan - thank you for your reply.  I've been mulling this over.  We are not a high-income household.  In fact, relative to where we live, we would be considered a low-income household.  Dh is in non-profit and I am retired, gross income is $80k per year and we live in a very HCOL area.  We are okay on retirement savings.  The fear on our end is that we would not be able to qualify for a decent mortgage if dh leaves his job and we have to qualify with a similar salary but with a brand new job, I understand that length of employment is a big issue on new loans.

We ran into the employment length issue while qualifying for our last mortgage.  Previously we had lived abroad for several years, and even though we had steller credit ratings, and even though we both had jobs that collectively were ~40% of the mortgage value, and even though we had far more in liquid assets than the amount we were seeking - some banks were hesitant to lend to us because we had just under 2 consecutive years of employment within the US.  Our continuous employment outside of the US counted for nothing.

Our ultimate lender made us jump through so many hoops... including getting letters from our employers testifying that they anticipated keeping us on indefinitely.