Author Topic: DONT Payoff your Mortgage Club  (Read 415253 times)

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #2400 on: September 16, 2020, 09:05:57 PM »
Hey I was wondering.... can anyone tell me?  Do details matter or not?
Hey all, meet dragoncar, the funniest creature on this forum. He's also very smart and breathes FIRE. Don't fuck with him. As long as you're nice to him, no one will get hurt. Maybe.

Fomerly known as something

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Re: DONT Payoff your Mortgage Club
« Reply #2401 on: September 17, 2020, 03:34:18 AM »

What matters with mortgages is whether you are using it as agreed on the note. It doesnít matter if you split who holds each loan. If you arenít living there r have rented it out, that could be a problem. Check first, or risk penalties.

Thank you for your feedback and opinions...this was more complicated than I thought, unfortunately :(
What would YOU do if this was your situation?  Now, I think I just got confused.  Refinance but maybe unable to rent it out in the future or keep original mortgage and can rent it out since notes allow after 3 years...
You're right, we're all in this together and trying to help and learn from one another and I really appreciated your time and comment.

thank you.
[/quote]

There are several questions Iíd ask in addition to refinance questions.  As I donít know if you should rent out your house.

1.  Do I want to be a landlord and why?
2.  Do I want to be a hands on landlord, if not do the numbers work if I hire a property manager.
3.  Do the numbers work as a rental on your current.  I donít mean can I rent it for the PITI, but also factoring in vacancies and Maintence.  (Does it meet the 1% rule, property rents for at least 1% of the purchase price ie a 100k house rents for $1,000 a month).
4.  Also you mentioned DR, you know he would be yelling at you for considering that you are considering buying a second home with a mortgage while still in other debt right?  Especially when you donít have a 3-6 month emergency fund.  Where are you getting you down payment let alone affording a new roof on your ďnew rentalĒ
« Last Edit: September 17, 2020, 03:35:55 AM by Fomerly known as something »

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #2402 on: September 17, 2020, 05:36:39 AM »
4.  Also you mentioned DR, you know he would be yelling at you for considering that you are considering buying a second home with a mortgage while still in other debt right? 
Fortunately, this is the Don't Pay Off Your Mortgage thread on the Mister Money Mustache Forum. We do things to optimize the path to FIRE. Here, we tend to yell at Dave Ramsey for the crappy investment advice he peddles.



CarnivoreforLife

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Re: DONT Payoff your Mortgage Club
« Reply #2403 on: September 17, 2020, 06:19:27 AM »

What matters with mortgages is whether you are using it as agreed on the note. It doesnít matter if you split who holds each loan. If you arenít living there r have rented it out, that could be a problem. Check first, or risk penalties.

Thank you for your feedback and opinions...this was more complicated than I thought, unfortunately :(
What would YOU do if this was your situation?  Now, I think I just got confused.  Refinance but maybe unable to rent it out in the future or keep original mortgage and can rent it out since notes allow after 3 years...
You're right, we're all in this together and trying to help and learn from one another and I really appreciated your time and comment.

thank you.

There are several questions Iíd ask in addition to refinance questions.  As I donít know if you should rent out your house.

1.  Do I want to be a landlord and why?
2.  Do I want to be a hands on landlord, if not do the numbers work if I hire a property manager.
3.  Do the numbers work as a rental on your current.  I donít mean can I rent it for the PITI, but also factoring in vacancies and Maintence.  (Does it meet the 1% rule, property rents for at least 1% of the purchase price ie a 100k house rents for $1,000 a month).
4.  Also you mentioned DR, you know he would be yelling at you for considering that you are considering buying a second home with a mortgage while still in other debt right?  Especially when you donít have a 3-6 month emergency fund.  Where are you getting you down payment let alone affording a new roof on your ďnew rentalĒ
[/quote]

I appreciate your reply- to answer your question:

I always wanted to try. I Know the pros and cons and def will regret if I donít take the risk. Basically, Iíll regret it if I donít try something (one of those people :) ).
I donít care about DR and this is the DONíT pay off your mortgage thread.
And Iím not sure how the assumption was made on me having no cash, emergency funds etc?...

Thanks


Mako52

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Re: DONT Payoff your Mortgage Club
« Reply #2404 on: September 17, 2020, 06:32:06 AM »
9/17/20.......Just closed on a 2.625/30yr with Lenderfi.  If the escrow refund from Loan Depot (3.25/30) is what I expect, net out of pocket cost is $350.  Saves us $2900 in interest the first year alone and frees up future cash flow to diversify away from illiquid home equity.
 

CarnivoreforLife

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Re: DONT Payoff your Mortgage Club
« Reply #2405 on: September 17, 2020, 06:38:59 AM »
9/17/20.......Just closed on a 2.625/30yr with Lenderfi.  If the escrow refund from Loan Depot (3.25/30) is what I expect, net out of pocket cost is $350.  Saves us $2900 in interest the first year alone and frees up future cash flow to diversify away from illiquid home equity.
 

Oh! How niceeee!
Congrats!

nereo

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Re: DONT Payoff your Mortgage Club
« Reply #2406 on: September 17, 2020, 06:39:31 AM »
9/17/20.......Just closed on a 2.625/30yr with Lenderfi.  If the escrow refund from Loan Depot (3.25/30) is what I expect, net out of pocket cost is $350.  Saves us $2900 in interest the first year alone and frees up future cash flow to diversify away from illiquid home equity.
 

That's awesome.  Kudos to you!

NotBadForADad

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Re: DONT Payoff your Mortgage Club
« Reply #2407 on: September 17, 2020, 07:32:24 AM »
9/17/20.......Just closed on a 2.625/30yr with Lenderfi.  If the escrow refund from Loan Depot (3.25/30) is what I expect, net out of pocket cost is $350.  Saves us $2900 in interest the first year alone and frees up future cash flow to diversify away from illiquid home equity.
 

How legitemate is this, I went to their site and they saying $1035/monthly, including insurance.

couponvan

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Re: DONT Payoff your Mortgage Club
« Reply #2408 on: September 17, 2020, 10:51:26 AM »
9/17/20.......Just closed on a 2.625/30yr with Lenderfi.  If the escrow refund from Loan Depot (3.25/30) is what I expect, net out of pocket cost is $350.  Saves us $2900 in interest the first year alone and frees up future cash flow to diversify away from illiquid home equity.
 

How legitemate is this, I went to their site and they saying $1035/monthly, including insurance.
I'm not sure what you are asking here because the $1,035 monthly could mean anything.  We are using Loan Depot right now for a no cost 2.5% 30 year fixed refi (VA, excellent credit).  I've never used Lenderfi, but I have heard of it. Your rates are going to depend on your credit, loan amount, loan-to-value ratio, employment history, and income. The insurance inclusion payment amounts are usually just an estimate. Your own insurance and taxes will vary by location.

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #2409 on: September 17, 2020, 11:46:12 AM »
I see some discussion above about Dave Ramsey and the baby-steps.

If you are reading this and committed to bringing order to your finances through the Dave Ramsey baby steps, please follow through at least to baby step #3 (full emergency fund). Bond yields will stay low for long enough for you to kill your non-mortgage debt.

Then come back to this thread. For planning your next ten years after you're out of debt, we think we're on to something.

NotBadForADad

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Re: DONT Payoff your Mortgage Club
« Reply #2410 on: September 17, 2020, 12:13:03 PM »
I see some discussion above about Dave Ramsey and the baby-steps.

If you are reading this and committed to bringing order to your finances through the Dave Ramsey baby steps, please follow through at least to baby step #3 (full emergency fund). Bond yields will stay low for long enough for you to kill your non-mortgage debt.

Then come back to this thread. For planning your next ten years after you're out of debt, we think we're on to something.

Sounds good. I created a case study as well.

Fomerly known as something

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Re: DONT Payoff your Mortgage Club
« Reply #2411 on: September 17, 2020, 07:23:21 PM »

What matters with mortgages is whether you are using it as agreed on the note. It doesnít matter if you split who holds each loan. If you arenít living there r have rented it out, that could be a problem. Check first, or risk penalties.

Thank you for your feedback and opinions...this was more complicated than I thought, unfortunately :(
What would YOU do if this was your situation?  Now, I think I just got confused.  Refinance but maybe unable to rent it out in the future or keep original mortgage and can rent it out since notes allow after 3 years...
You're right, we're all in this together and trying to help and learn from one another and I really appreciated your time and comment.

thank you.

There are several questions Iíd ask in addition to refinance questions.  As I donít know if you should rent out your house.

1.  Do I want to be a landlord and why?
2.  Do I want to be a hands on landlord, if not do the numbers work if I hire a property manager.
3.  Do the numbers work as a rental on your current.  I donít mean can I rent it for the PITI, but also factoring in vacancies and Maintence.  (Does it meet the 1% rule, property rents for at least 1% of the purchase price ie a 100k house rents for $1,000 a month).
4.  Also you mentioned DR, you know he would be yelling at you for considering that you are considering buying a second home with a mortgage while still in other debt right?  Especially when you donít have a 3-6 month emergency fund.  Where are you getting you down payment let alone affording a new roof on your ďnew rentalĒ

I appreciate your reply- to answer your question:

I always wanted to try. I Know the pros and cons and def will regret if I donít take the risk. Basically, Iíll regret it if I donít try something (one of those people :) ).
I donít care about DR and this is the DONíT pay off your mortgage thread.
And Iím not sure how the assumption was made on me having no cash, emergency funds etc?...

Thanks
[/quote]

Sorry on the DR confused your question with NotBadForADad.

rpr

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Re: DONT Payoff your Mortgage Club
« Reply #2412 on: September 22, 2020, 10:05:59 PM »
Trying to join the refi bandwagon. I'm working with a local broker. Most of the common online discount mortgage brokers are not licensed and do not issue mortgages in my state limiting my options.

Current Loan: 22 years left, balance $230K, 30 year FRM @ 3.5%.

Quoted Rate: 30 year FRM at 2.625% with 0.4% points and a 60 day lock. Additional closing costs are about $6K which includes origination fee, appraisal, title insurance, settlement fee etc. These costs will be rolled over into the loan. Escrow for insurance and taxes are separate.

I checked Loan Depot and they offered a higher rate 2.99% with similar closing costs.

With this refi, if I continue making previous payments, I'd pay off the loan in 20.5 years. So this saves about 1.5 years of my current loan. (I do not intend to do this but providing this just for comparison).

Is this an OK rate? 

Lock it or wait? Thanks.

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #2413 on: September 23, 2020, 06:34:07 AM »
ten-year treasury bills yielding 0.6% right now, not sure how low they can go. Will the 2.625% rate get you enough movement that you're happy?

rpr

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Re: DONT Payoff your Mortgage Club
« Reply #2414 on: September 24, 2020, 04:40:18 PM »
ten-year treasury bills yielding 0.6% right now, not sure how low they can go. Will the 2.625% rate get you enough movement that you're happy?

Thanks. I did end up locking yesterday (30 day lock) for a 30 year FRM @ 2.5% with a small lender credit.

CarnivoreforLife

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Re: DONT Payoff your Mortgage Club
« Reply #2415 on: September 27, 2020, 05:41:51 PM »
Hey everyone!

Quick update- I did locked in 2.75% 30 yrs with low closing cost/fee! :)

I have been thinking about future rental for the property- not sure if this thread is the right Thread to ask or if it should be in real estate investing instead... but here it goes:
  Weíre trying to get gather as much information As possible on how to prep the house for it to be rental ready.
1) The yard is .25 acres. And has 2 big mature trees in the back and 2 medium trees in the front.  Are the renters responsible for caring for the yard or do we hire someone to care for it twice a week and roll the cost into the rental?

2). Our current stove is working fine, but one burner is not. Only 3 out of 4 burner is working.  Do we have to replace The stove completely?

3). The flooring in the kitchen needs to be replace.  Fortunately, we have family members that can assist us.  What kind of flooring you recommend for rentals that are long lasting and water proof?

What liabilities come into mind that we should be careful and aware of?


Thanks in advance!

SwordGuy

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Re: DONT Payoff your Mortgage Club
« Reply #2416 on: September 27, 2020, 06:07:28 PM »
1) The yard is .25 acres. And has 2 big mature trees in the back and 2 medium trees in the front.  Are the renters responsible for caring for the yard or do we hire someone to care for it twice a week and roll the cost into the rental?

Yes.   Or you mow it yourself.     In other words, it's how you want to offer it and whether the renter wants it that way.

2). Our current stove is working fine, but one burner is not. Only 3 out of 4 burner is working.  Do we have to replace The stove completely?

Yes or no.    Have you tried getting it repaired?     

Unless you specifically advertise it has a stove with only 3 of 4 burners working and that's how it's going to stay or you don't provide a stove at all, then yes, you are expected to provide a working stove.   Local laws might require the stove to be fully working regardless.

Frankly, if you provide a stove and it doesn't work properly, you're going to limit your potential renter pool.   And skew it to the worst of the worst, too.    Frankly, I wouldn't rent from a landlord who was too cheap to fix the stove unless I had no other choice.    And if I had no other choice, it's probably because I'm broke and desperate, neither of which are good renter material.

3). The flooring in the kitchen needs to be replace.  Fortunately, we have family members that can assist us.  What kind of flooring you recommend for rentals that are long lasting and water proof?

Nothing is water proof, you can only get water resitant.  Water will find it's own way given time.  :(

Linoleum is cheap and easy to install.    Tile is another option depending on the subflooring.
Partly it depends on the type of house and the neighborhood.   Sometimes you need to go more upscale.

What liabilities come into mind that we should be careful and aware of?
Ignorance.

Ignorance on the financials of how to calculate whether you're making a profit.

Ignorance on landlording laws in your state and locality.

Have you read some (hopefully many) of the resources listed on the RE sub-forum?

CarnivoreforLife

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Re: DONT Payoff your Mortgage Club
« Reply #2417 on: September 27, 2020, 06:17:30 PM »
1) The yard is .25 acres. And has 2 big mature trees in the back and 2 medium trees in the front.  Are the renters responsible for caring for the yard or do we hire someone to care for it twice a week and roll the cost into the rental?

Yes.   Or you mow it yourself.     In other words, it's how you want to offer it and whether the renter wants it that way.

2). Our current stove is working fine, but one burner is not. Only 3 out of 4 burner is working.  Do we have to replace The stove completely?

Yes or no.    Have you tried getting it repaired?     

Unless you specifically advertise it has a stove with only 3 of 4 burners working and that's how it's going to stay or you don't provide a stove at all, then yes, you are expected to provide a working stove.   Local laws might require the stove to be fully working regardless.

Frankly, if you provide a stove and it doesn't work properly, you're going to limit your potential renter pool.   And skew it to the worst of the worst, too.    Frankly, I wouldn't rent from a landlord who was too cheap to fix the stove unless I had no other choice.    And if I had no other choice, it's probably because I'm broke and desperate, neither of which are good renter material.

3). The flooring in the kitchen needs to be replace.  Fortunately, we have family members that can assist us.  What kind of flooring you recommend for rentals that are long lasting and water proof?

Nothing is water proof, you can only get water resitant.  Water will find it's own way given time.  :(

Linoleum is cheap and easy to install.    Tile is another option depending on the subflooring.
Partly it depends on the type of house and the neighborhood.   Sometimes you need to go more upscale.

What liabilities come into mind that we should be careful and aware of?
Ignorance.

Ignorance on the financials of how to calculate whether you're making a profit.

Ignorance on landlording laws in your state and locality.

Have you read some (hopefully many) of the resources listed on the RE sub-forum?

Noted!  Thank you!

TomTX

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Re: DONT Payoff your Mortgage Club
« Reply #2418 on: September 27, 2020, 07:08:24 PM »
Around here, I commonly see stoves listed as fully working for around $100. Not all of the stoves, of course - but they commonly appear.

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #2419 on: September 27, 2020, 07:55:25 PM »
Hey everyone!

Quick update- I did locked in 2.75% 30 yrs with low closing cost/fee! :) Congratulations!

I have been thinking about future rental for the property- not sure if this thread is the right Thread to ask or if it should be in real estate investing instead... but here it goes:
  Weíre trying to get gather as much information As possible on how to prep the house for it to be rental ready.
1) The yard is .25 acres. And has 2 big mature trees in the back and 2 medium trees in the front.  Are the renters responsible for caring for the yard or do we hire someone to care for it twice a week monthand roll the cost into the rental? You are responsible. Pay a gardener or DIY, your choice. Yes, it should be included in your rent calculation, except the amount of rent you can get is based on the market, not your gardening bills.

2). Our current stove is working fine, but one burner is not. Only 3 out of 4 burner is working.  Do we have to replace The stove completely? Try You Tube and see if you can fix it yourself. Otherwise, Craigslist is your friend. Yes, everything must be in good working order.

3). The flooring in the kitchen needs to be replace.  Fortunately, we have family members that can assist us.  What kind of flooring you recommend for rentals that are long lasting and water proof? LVP, LVP, LVP. Nothing else holds a candle to it for cost/value/longevity, plus it's relatively easy to install. It is sold as "waterproof", but given enough water and time, nothing is completely waterproof. Make sure you install it correctly. Again, You Tube is your friend. Don't buy the cheapest stuff out there, unless it's cheap because it's on sale. Quality counts. 

What liabilities come into mind that we should be careful and aware of? Buy a Landlord Policy and Umbrella Insurance. Consider creating an LLC and/or a Trust. Screen the shit out of every prospective tenant. Use the internet and if there's any possible way, figure out where they're living now and put your eyeballs on it if you can. Find out why they're moving. Check all references. Ask for more if you think they're all set-ups. Don't take pets if you can help it. Don't take any pet without a substantial pet deposit and limiting the size/breed/number of dogs allowed. Insist on meeting the pet first. Make sure all of this is spelled out in the lease.


Thanks in advance!

It's cheap insurance to replace the water supply lines on the toilets and check all the connections under every sink and the dishwasher.

If you're taking the W/D, buy a nice used set and install them in the house. It will make your listing stand out. Nobody wants to go to a laundromat.

Once you have a tenant, be the best landlord ever. Insist they notify you immediately if anything breaks (put it in the lease) and then respond as soon as is humanly possible. The more you respond to their needs, the better care they take care of the place, in my experience. Assuming, of course, you've selected good tenants.


In addition, do whatever SwordGuy says.

CarnivoreforLife

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Re: DONT Payoff your Mortgage Club
« Reply #2420 on: September 28, 2020, 05:59:21 AM »
Hey everyone!

Quick update- I did locked in 2.75% 30 yrs with low closing cost/fee! :) Congratulations!

I have been thinking about future rental for the property- not sure if this thread is the right Thread to ask or if it should be in real estate investing instead... but here it goes:
  Weíre trying to get gather as much information As possible on how to prep the house for it to be rental ready.
1) The yard is .25 acres. And has 2 big mature trees in the back and 2 medium trees in the front.  Are the renters responsible for caring for the yard or do we hire someone to care for it twice a week monthand roll the cost into the rental? You are responsible. Pay a gardener or DIY, your choice. Yes, it should be included in your rent calculation, except the amount of rent you can get is based on the market, not your gardening bills.

2). Our current stove is working fine, but one burner is not. Only 3 out of 4 burner is working.  Do we have to replace The stove completely? Try You Tube and see if you can fix it yourself. Otherwise, Craigslist is your friend. Yes, everything must be in good working order.

3). The flooring in the kitchen needs to be replace.  Fortunately, we have family members that can assist us.  What kind of flooring you recommend for rentals that are long lasting and water proof? LVP, LVP, LVP. Nothing else holds a candle to it for cost/value/longevity, plus it's relatively easy to install. It is sold as "waterproof", but given enough water and time, nothing is completely waterproof. Make sure you install it correctly. Again, You Tube is your friend. Don't buy the cheapest stuff out there, unless it's cheap because it's on sale. Quality counts. 

What liabilities come into mind that we should be careful and aware of? Buy a Landlord Policy and Umbrella Insurance. Consider creating an LLC and/or a Trust. Screen the shit out of every prospective tenant. Use the internet and if there's any possible way, figure out where they're living now and put your eyeballs on it if you can. Find out why they're moving. Check all references. Ask for more if you think they're all set-ups. Don't take pets if you can help it. Don't take any pet without a substantial pet deposit and limiting the size/breed/number of dogs allowed. Insist on meeting the pet first. Make sure all of this is spelled out in the lease.


Thanks in advance!

It's cheap insurance to replace the water supply lines on the toilets and check all the connections under every sink and the dishwasher.

If you're taking the W/D, buy a nice used set and install them in the house. It will make your listing stand out. Nobody wants to go to a laundromat.

Once you have a tenant, be the best landlord ever. Insist they notify you immediately if anything breaks (put it in the lease) and then respond as soon as is humanly possible. The more you respond to their needs, the better care they take care of the place, in my experience. Assuming, of course, you've selected good tenants.


In addition, do whatever SwordGuy says.

Thanks Dicey!

1). Ok. Yes weíre probably leaning towards paying someone and that should be written in the lease agreement, correct?

2) Hub said he might can fix it- if not yes Craigslist seems to have a lot I agree

3) LVP sounds like a great option!  Thanks!  I originally wanted tile but it takes too much time to install and can crack as Iíve seen In homes.
 
The water supply line is a separate insurance that we need to purchase?
Weíre not taking the L&D

Thanks.

CarnivoreforLife

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Re: DONT Payoff your Mortgage Club
« Reply #2421 on: September 28, 2020, 06:16:57 AM »
Around here, I commonly see stoves listed as fully working for around $100. Not all of the stoves, of course - but they commonly appear.

Yes, weíre going to be looking if it canít be fix.

Thanks!

By the River

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Re: DONT Payoff your Mortgage Club
« Reply #2422 on: September 28, 2020, 08:18:29 AM »
We are refinancing and I thought I'd show how my wifeís thinking on the DPOYM has done a 180 over time.  Back story, we bought our first house right before turning 30 with a 30-year mortgage (and PMI).  My wife said at that time that we had to have the mortgage paid off before retiring but since everyone retires after 65 this wasnít an issue.  (Iím sure she learned this from her parents).

Fast forward through a couple of moves, we bought our current house ten years ago when we were 47/46.  Again, she mentioned no mortgage in retirement.  At this time, I thought we could retire at 60, so negotiated that we would pay the house off in the years between working and taking social security to take advantage of tax brackets. This was acceptable.

In March/April 2020, her companyís 401K provider offered webinars to employees divided into different categories.  She took part of one for women nearing retirement.  Iím not sure if it was from the presenter or other employees but after, she told me that she learned that the mortgage didnít need to be paid off, that it was just another debt.   

Two weeks ago, I told her the best refinance rate I found was 2.75% for 30 years.  She asked me what was the maximum we could borrow at that rate so we could invest the difference!   So, weíve taken out cash to invest and will use all 30 years to repay. 

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #2423 on: September 28, 2020, 09:06:50 AM »
Hey everyone!

Quick update- I did locked in 2.75% 30 yrs with low closing cost/fee! :) Congratulations!

I have been thinking about future rental for the property- not sure if this thread is the right Thread to ask or if it should be in real estate investing instead... but here it goes:
  Weíre trying to get gather as much information As possible on how to prep the house for it to be rental ready.
1) The yard is .25 acres. And has 2 big mature trees in the back and 2 medium trees in the front.  Are the renters responsible for caring for the yard or do we hire someone to care for it twice a week monthand roll the cost into the rental? You are responsible. Pay a gardener or DIY, your choice. Yes, it should be included in your rent calculation, except the amount of rent you can get is based on the market, not your gardening bills.

2). Our current stove is working fine, but one burner is not. Only 3 out of 4 burner is working.  Do we have to replace The stove completely? Try You Tube and see if you can fix it yourself. Otherwise, Craigslist is your friend. Yes, everything must be in good working order.

3). The flooring in the kitchen needs to be replace.  Fortunately, we have family members that can assist us.  What kind of flooring you recommend for rentals that are long lasting and water proof? LVP, LVP, LVP. Nothing else holds a candle to it for cost/value/longevity, plus it's relatively easy to install. It is sold as "waterproof", but given enough water and time, nothing is completely waterproof. Make sure you install it correctly. Again, You Tube is your friend. Don't buy the cheapest stuff out there, unless it's cheap because it's on sale. Quality counts. 

What liabilities come into mind that we should be careful and aware of? Buy a Landlord Policy and Umbrella Insurance. Consider creating an LLC and/or a Trust. Screen the shit out of every prospective tenant. Use the internet and if there's any possible way, figure out where they're living now and put your eyeballs on it if you can. Find out why they're moving. Check all references. Ask for more if you think they're all set-ups. Don't take pets if you can help it. Don't take any pet without a substantial pet deposit and limiting the size/breed/number of dogs allowed. Insist on meeting the pet first. Make sure all of this is spelled out in the lease.


Thanks in advance!

It's cheap insurance to replace the water supply lines on the toilets and check all the connections under every sink and the dishwasher.

If you're taking the W/D, buy a nice used set and install them in the house. It will make your listing stand out. Nobody wants to go to a laundromat.

Once you have a tenant, be the best landlord ever. Insist they notify you immediately if anything breaks (put it in the lease) and then respond as soon as is humanly possible. The more you respond to their needs, the better care they take care of the place, in my experience. Assuming, of course, you've selected good tenants.


In addition, do whatever SwordGuy says.

Thanks Dicey!

1). Ok. Yes weíre probably leaning towards paying someone and that should be written in the lease agreement, correct?

2) Hub said he might can fix it- if not yes Craigslist seems to have a lot I agree

3) LVP sounds like a great option!  Thanks!  I originally wanted tile but it takes too much time to install and can crack as Iíve seen In homes.
 
The water supply line is a separate insurance that we need to purchase?
Weíre not taking the L&D

Thanks.
1. When we have a house for rent, we say "gardener included" in the listing. It's not specifically mentioned in the lease. But then, our rentals are in a Senior Community and nobody expects the tenants to maintain the landscaping...

2. The coil-type burners are easy to replace. The glass tops are a bit trickier to service, but not impossible.

3. We've had nothing but good experiences with LVP. I'll PM you a link to the last project we used it on.

Whoops! In this case, "cheap insurance" is just a figure of speech. Water supply lines are the flexible braided steel hoses that connect the water supply to the toilet or sink. They're fairly inexpensive and can cause a shitload of damage when they fail. Every homeowner should check and replace them periodically.

Finally, I don't understand your last sentence. What does that mean?

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #2424 on: September 28, 2020, 09:07:42 AM »
We are refinancing and I thought I'd show how my wifeís thinking on the DPOYM has done a 180 over time.  Back story, we bought our first house right before turning 30 with a 30-year mortgage (and PMI).  My wife said at that time that we had to have the mortgage paid off before retiring but since everyone retires after 65 this wasnít an issue.  (Iím sure she learned this from her parents).

Fast forward through a couple of moves, we bought our current house ten years ago when we were 47/46.  Again, she mentioned no mortgage in retirement.  At this time, I thought we could retire at 60, so negotiated that we would pay the house off in the years between working and taking social security to take advantage of tax brackets. This was acceptable.

In March/April 2020, her companyís 401K provider offered webinars to employees divided into different categories.  She took part of one for women nearing retirement.  Iím not sure if it was from the presenter or other employees but after, she told me that she learned that the mortgage didnít need to be paid off, that it was just another debt.   

Two weeks ago, I told her the best refinance rate I found was 2.75% for 30 years.  She asked me what was the maximum we could borrow at that rate so we could invest the difference!   So, weíve taken out cash to invest and will use all 30 years to repay.
Great story!

robartsd

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Re: DONT Payoff your Mortgage Club
« Reply #2425 on: September 28, 2020, 04:39:51 PM »
We are refinancing and I thought I'd show how my wifeís thinking on the DPOYM has done a 180 over time.  Back story, we bought our first house right before turning 30 with a 30-year mortgage (and PMI).  My wife said at that time that we had to have the mortgage paid off before retiring but since everyone retires after 65 this wasnít an issue.  (Iím sure she learned this from her parents).

Fast forward through a couple of moves, we bought our current house ten years ago when we were 47/46.  Again, she mentioned no mortgage in retirement.  At this time, I thought we could retire at 60, so negotiated that we would pay the house off in the years between working and taking social security to take advantage of tax brackets. This was acceptable.

In March/April 2020, her companyís 401K provider offered webinars to employees divided into different categories.  She took part of one for women nearing retirement.  Iím not sure if it was from the presenter or other employees but after, she told me that she learned that the mortgage didnít need to be paid off, that it was just another debt.   

Two weeks ago, I told her the best refinance rate I found was 2.75% for 30 years.  She asked me what was the maximum we could borrow at that rate so we could invest the difference!   So, weíve taken out cash to invest and will use all 30 years to repay.
Good story, so long as she didn't get too much advice on HOW to invest it from the webinars.

By the River

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Re: DONT Payoff your Mortgage Club
« Reply #2426 on: September 29, 2020, 10:28:30 AM »
Two weeks ago, I told her the best refinance rate I found was 2.75% for 30 years.  She asked me what was the maximum we could borrow at that rate so we could invest the difference!   So, weíve taken out cash to invest and will use all 30 years to repay.
Good story, so long as she didn't get too much advice on HOW to invest it from the webinars.

No, we use them only because the 401K uses their funds.  We long ago agreed on ETFs for outside of 401K. 

wildbeast

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Re: DONT Payoff your Mortgage Club
« Reply #2427 on: October 02, 2020, 06:11:44 AM »
@Dicey - which brands of LVP have you used?  I'm considering for kitchen.  Costco has Mohawk and Golden Arowana, any experience with either of those?

Thanks!

NotBadForADad

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Re: DONT Payoff your Mortgage Club
« Reply #2428 on: October 02, 2020, 06:42:06 AM »
@Dicey - which brands of LVP have you used?  I'm considering for kitchen.  Costco has Mohawk and Golden Arowana, any experience with either of those?

Thanks!

For economy grade LVP, my brother and I always suggest Lifeproof from Home Depot. It's their higher end model, so installation is a little easier because the quality is better.

Trust me, I suggested this to my MILs landlord when I redid his condo and he went to another store and got their "Sale" LVP. (Which ended up being more expensive than Lifeproof). The install process was a PITA. The edges of the planks right out of the box were damaged on half of them. They wouldn't go together as smooth as other product I have installed. The T&G edges were so fragile they get chipping off. In the end it looked fine, but man it was a tough install.

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #2429 on: October 02, 2020, 07:04:18 AM »
@Dicey - which brands of LVP have you used?  I'm considering for kitchen.  Costco has Mohawk and Golden Arowana, any experience with either of those?

Thanks!
One of those companies, I've never heard of, the other may have been printed on my paycheck for a number of years. Remember I've been FIRE for almost eight years, so only recognizing one name is possibly understandable. It slso means I left the industry before LVP really caught on.

The first time we installed LVP was about four years ago. It was a product from Lumber Liquidators to redo DSD's entire condo, and she chose it. We were skeptical but we fell in love. The most recent big job was last year. We wanted flooring with a sound deadening effect, so we went with Down's H20 from Flooring America, which is a cork-backed product made by Shaw. PM me if you want to see pictures.

IMO, a critical feature of LVP is edge quality. Every damn time I see LVP at Costco, I check it out. It's almost always a Mohawk product. The edges typically look brittle and there is usually visible damage already, which totally sucks, IMO. Usually the color selection isn't great either.

Brittle edges mean the durability will be compromised, as well as any waterproofing properties the product is purported to have. It also means more waste, which drives up the cost and the frustration when installing.

Other things to keep in mind: I hear from still-working friends that backorders are really high right now, and everyone's having price increases. Of course, those two issues are at play with all flooring options.

See also: @NotBadForADad's cross post, lol.

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #2430 on: October 02, 2020, 07:27:40 AM »
Got the disclosures for my refinance (closing Monday). Mrs. TallTexan is a little bit wary about the handling of the escrow, but we're moving ahead. Grateful to have the large pot of cash available to get this done (although I'm horrified at what's happened in society that has caused it to build up from never going anywhere or hiring anyone to watch our son).

wildbeast

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Re: DONT Payoff your Mortgage Club
« Reply #2431 on: October 03, 2020, 10:28:36 AM »
@Dicey - which brands of LVP have you used?  I'm considering for kitchen.  Costco has Mohawk and Golden Arowana, any experience with either of those?

Thanks!
One of those companies, I've never heard of, the other may have been printed on my paycheck for a number of years. Remember I've been FIRE for almost eight years, so only recognizing one name is possibly understandable. It slso means I left the industry before LVP really caught on.

The first time we installed LVP was about four years ago. It was a product from Lumber Liquidators to redo DSD's entire condo, and she chose it. We were skeptical but we fell in love. The most recent big job was last year. We wanted flooring with a sound deadening effect, so we went with Down's H20 from Flooring America, which is a cork-backed product made by Shaw. PM me if you want to see pictures.

IMO, a critical feature of LVP is edge quality. Every damn time I see LVP at Costco, I check it out. It's almost always a Mohawk product. The edges typically look brittle and there is usually visible damage already, which totally sucks, IMO. Usually the color selection isn't great either.

Brittle edges mean the durability will be compromised, as well as any waterproofing properties the product is purported to have. It also means more waste, which drives up the cost and the frustration when installing.

Other things to keep in mind: I hear from still-working friends that backorders are really high right now, and everyone's having price increases. Of course, those two issues are at play with all flooring options.

See also: @NotBadForADad's cross post, lol.

@Dicey - Thanks!  I found two stores nearby that sell that product so I'll go check it out.  And  I appreciate the feedback on the Costco products.  It's too bad; it seems they are trying to find a good supplier but not having too much luck.  Have you ever installed LVP on a floor with a crawl space?  I'm wondering if it will be stable enough to handle the expansion/contraction and movement of the wood subfloor; the rest of the house where we have crawl space is white oak.  We have one small area that is foundation and we put in a pergo-like laminate many years ago that has held up very well, but with slab there is no movement of the floor, plus the laminate is a lot more rigid. 

@NotBadForADad - Thanks for the recommend!  I will check it out.

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #2432 on: October 03, 2020, 06:40:09 PM »
Yeah, our last project was over a crawl space. Very typical for California. What you do is allow for movement. You leave 1/4-1/3 inch around the perimeter of every room in the house. When you install the baseboards, you use a thin shim so they're not sitting hard against the floor. That way the floor moves slightly and doesn't buckle as the house breathes. You also need to allow the product to acclimate before you install it for best results.

And Costco seems to get most of their product from Mohawk, which is a major supplier. You have to be willing to pay a bit more for the quality and look you want. When Costco sells product, I think they look to hit a certain price point. So far, I'm just not seeing them hit the sweet spot of looks/quality/price.

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Re: DONT Payoff your Mortgage Club
« Reply #2433 on: October 04, 2020, 10:54:49 AM »
Hi, all! I've been lurking for a while getting caught up on the forum posts and decided to join in.
I just refinanced my house, and in between signing the paperwork and making my first payment on 10/1, I joined the "do NOT pay off your mortgage" team. Which means that I have a 20 year loan instead of a 30, but after seeing a discussion about this topic on the Reddit personal finance page, I mathed and came to the conclusion that at 3% interest, it makes zero sense to pay more on the mortgage. Even if you look at an extremely conservative estimate of 6% return in the stock market, that *still* beats my loan interest by double.
So I made my first mortgage payment this week, and did NOT pay extra.
Though due to the Covid, I've taken a big pay cut this year, while at the same time took over supporting my step dad, so nothing has gone into stocks as of yet while I work on re-balancing my budget.

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #2434 on: October 05, 2020, 06:20:07 AM »
Sorry about the hit to your income, @FragglesRock666 , in what industry do you work?

FragglesRock666

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Re: DONT Payoff your Mortgage Club
« Reply #2435 on: October 05, 2020, 01:41:32 PM »
Sorry about the hit to your income, @FragglesRock666 , in what industry do you work?

I am an accountant, but my current employer is a string of retail stores.  We went from 61 stores to 7 in a matter of 2 weeks with the Covid.  We're back up to everything open, but I was down to 50% pay for a month before I was then furloughed for almost 3 months, and bonuses are based on sales, so... 
Thankfully, I had worked very hard the previous couple of years so that I have no non-mortgage debt, and a decent emergency fund. 

CarnivoreforLife

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Re: DONT Payoff your Mortgage Club
« Reply #2436 on: October 05, 2020, 05:08:57 PM »
@Dicey
Sorry- I meant W&D
ďCheap insuranceĒ figure of speech- lol got it! That is now on our to dos list as well.  Luckily, we already did it for the kitchen sink.

Thanks!

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Re: DONT Payoff your Mortgage Club
« Reply #2437 on: October 06, 2020, 03:29:17 AM »
Hi,

New Dutch home-owner checking in. 

Mortgage: Ä296.660
Interest: 2.35%, 30 year fixed
Monthly payment: Ä1400.
Mortgage type: Linear. A fixed amount per month goes to paying the principle, and a declining amount is interest. We start at ~900 principal, ~500 interest.
Market Value: Ä300.000. This will increase to Ä305.000 after remodeling, in 6 months.

The interest rate will drop according to the following schedule:

>95% LTMV: 2.35%
95% LTMV: 2.25%
85% LTMV: 2.07%
65% LTMV: 2.06%
55% LTMV: 2.05%


Just reached the 95% LTMV by making minimal payments and interest dropped to 2.25%.

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #2438 on: October 06, 2020, 06:12:15 AM »
Dutch mortgages sound awesome!

Here in NC, just went yesterday and signed all the paperwork for our shiny, new 2.75% mortgage. First payment is due Dec. 1. Last payment will be due Nov. 1, 2050.

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #2439 on: October 06, 2020, 07:13:25 PM »
Dutch mortgages sound awesome!

Here in NC, just went yesterday and signed all the paperwork for our shiny, new 2.75% mortgage. First payment is due Dec. 1. Last payment will be due Nov. 1, 2050.
Swe-e-e-et!

SwordGuy

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Re: DONT Payoff your Mortgage Club
« Reply #2440 on: October 09, 2020, 10:27:46 PM »
Thanks for all the good advice.   We bought a new home to live in back 2015.  The plan was to pay off the mortage quickly, with the bulk coming from the sale of my mom's house or our old house, whichever came first.

Then I learned about this thread and changed that plan.

We sold my mom's house and we invested the money.

We sold our old house and invested the money.

We sold a house we invested in and instead of paying off the mortgage we invested the money again.

Now, 5 years later, we're officially out of the don't pay off your mortgage club.    We bought a new home last January and as we sold off our prior home, plus some other properties, we paid off the mortgage with the proceeds.

Delaying paying off our mortgage for 5 years during this bull market meant we made a fair bit more money than we otherwise would have.   I'm willing to bet it was enough to cover the $100k down payment we made to buy our new home, one that suits us PERFECTLY.

We're already fired and cutting our annual expenses by paying off the mortgage greatly improves our quality of life, we no longer need to really worry about going over our budget now.    We've got plenty of fun money without even having to draw down our stash.  Yep, our planned SWR is NEGATIVE 1.4%.    That's about as safe as it gets in retirement. :)

Thankee kindly!

For those of you reading this thread, buried way back in the bowels of it, you'll find the discussion about whether we should pay it off or not in lots of detail.

Suffice it to say that the general agreement was, "It makes sense for you to pay it off IN YOUR PARTICULAR circumstances."

For most folks who are still trying to FIRE, the advice to delay paying off a low fixed-interest rate mortgage is the right thing to do.

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #2441 on: October 10, 2020, 05:16:47 AM »
I've been following your progress all along and loved reading this recap.

Holding mortgages for many years enabled us to sell two homes and pay cash for our current one seven years ago, when we needed a larger, single-story home. Every time mortgage rates fall to new lows, I still pine for some of that sweet, cheap money. Alas, cash out re-fis typically cost more and have fewer tax advantages. I usually console myself by checking the investment account balances. Sometimes it works. MPP for sure.

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #2442 on: October 12, 2020, 08:31:51 AM »
We appreciate your arguments for the cause, @Dicey !

My next payment isn't due until Dec. 1. Nice little side benefit of refinancing is that gap to rebuild cash reserves.

nereo

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Re: DONT Payoff your Mortgage Club
« Reply #2443 on: October 12, 2020, 09:28:57 AM »
I've been following your progress all along and loved reading this recap.

Holding mortgages for many years enabled us to sell two homes and pay cash for our current one seven years ago, when we needed a larger, single-story home. Every time mortgage rates fall to new lows, I still pine for some of that sweet, cheap money. Alas, cash out re-fis typically cost more and have fewer tax advantages. I usually console myself by checking the investment account balances. Sometimes it works. MPP for sure.

We are so frustrated to find ourselves Ďstuckí in a situation where we might (possibly?) move in the next 3-6 months, so re-financing is off the table for now.  I look at our 3.7% loan (signed just over a year ago) and it feels so damn high compared to the rates that I am seeing.

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #2444 on: October 12, 2020, 11:02:03 AM »
Stay the course, @nereo , and--if you're worried about interest rates--just watch a Chairman Powell speech or two, and I think you'll feel like your move will arrive in time.

rpr

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Re: DONT Payoff your Mortgage Club
« Reply #2445 on: October 23, 2020, 08:02:09 PM »
ten-year treasury bills yielding 0.6% right now, not sure how low they can go. Will the 2.625% rate get you enough movement that you're happy?

Thanks. I did end up locking yesterday (30 day lock) for a 30 year FRM @ 2.5% with a small lender credit.

Closed on the refi last week 30 year at 2.5%. Now I need to change my monthly contribution amount for the Vanguard Taxable account. Feels good to have done this.

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #2446 on: October 23, 2020, 09:02:05 PM »
ten-year treasury bills yielding 0.6% right now, not sure how low they can go. Will the 2.625% rate get you enough movement that you're happy?

Thanks. I did end up locking yesterday (30 day lock) for a 30 year FRM @ 2.5% with a small lender credit.

Closed on the refi last week 30 year at 2.5%. Now I need to change my monthly contribution amount for the Vanguard Taxable account. Feels good to have done this.
Good job! We're amassing paperwork to start the re-fi process on all three of our rentals. Three at once has to be easier, right?

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Re: DONT Payoff your Mortgage Club
« Reply #2447 on: October 24, 2020, 09:18:24 AM »
I've been considering refinancing since March when rates started to plummet. I got serious contacting several lenders in June but couldn't make the numbers work.  I keep hearing about people getting great rates, but I think my mortgage amount is too low and many of the good discount lenders don't have a license in my state.  So I'm quite jealous of all these people getting good deals like 30 years in the 2.5% or less range!!

I had basically given up, but continued to occasionally check online lenders that actually show rate and pricing info.  And I finally found a deal that at least makes sense for me, despite being terrible in comparison to what others are getting.  I owe around $110k currently at 3.5% with ~22 years left.  I locked in with LenderFI for 3.25% with no closing costs.  While the interest rate reduction isn't that great, it is no cost and resets me back to 30 years.  So my payment will be around $125 cheaper.  I'll be under $500 a month which will be sweet! 

LenderFI is nice because they'll show you exactly how much lender credit you'll get at each rate and how much the total closing costs will be without having to login/apply/share contact info.  They had really  terrible rates when I checked earlier (March-June) but started to make sense recently and yesterday was the best I'd seen so I jumped on it.  After I applied, I got the rate they advertised and they waived the appraisal (LTV easily <50%) which I was assuming they'd do.  It's all online so pretty easy but did talk to someone on the phone to lock.  They say they'll close within 30 days.  I'm still considering some other options to see if anyone can beat it.  We'll see if PenFed ever contacts me and I applied with a local broker as well.  If not, I'll be happy with what I got.  Gotta keep that low rate mortgage as long as I can!!

Telecaster

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Re: DONT Payoff your Mortgage Club
« Reply #2448 on: October 24, 2020, 01:56:47 PM »
I've been considering refinancing since March when rates started to plummet. I got serious contacting several lenders in June but couldn't make the numbers work.  I keep hearing about people getting great rates, but I think my mortgage amount is too low and many of the good discount lenders don't have a license in my state.  So I'm quite jealous of all these people getting good deals like 30 years in the 2.5% or less range!!

Likewise, I'm just not seeing enough of a drop for my personal residence to make it worth it.  I am refinancing a rental property though. 

TomTX

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Re: DONT Payoff your Mortgage Club
« Reply #2449 on: October 24, 2020, 02:04:11 PM »
I had basically given up, but continued to occasionally check online lenders that actually show rate and pricing info.  And I finally found a deal that at least makes sense for me, despite being terrible in comparison to what others are getting.  I owe around $110k currently at 3.5% with ~22 years left.  I locked in with LenderFI for 3.25% with no closing costs.  While the interest rate reduction isn't that great, it is no cost and resets me back to 30 years.  So my payment will be around $125 cheaper.  I'll be under $500 a month which will be sweet! 

LenderFI is nice because they'll show you exactly how much lender credit you'll get at each rate and how much the total closing costs will be without having to login/apply/share contact info.  They had really  terrible rates when I checked earlier (March-June) but started to make sense recently and yesterday was the best I'd seen so I jumped on it.  After I applied, I got the rate they advertised and they waived the appraisal (LTV easily <50%) which I was assuming they'd do.  It's all online so pretty easy but did talk to someone on the phone to lock.  They say they'll close within 30 days.  I'm still considering some other options to see if anyone can beat it.  We'll see if PenFed ever contacts me and I applied with a local broker as well.  If not, I'll be happy with what I got.  Gotta keep that low rate mortgage as long as I can!!

Hm, looks like they're offering me 3% flat with $0 closing costs based on the website.

Can they do the closing entirely online too?