Refinancing your home

Discussion in 'The OT' started by Mark Holtz, Sep 8, 2019.

Is refinancing your home an option in the future

Poll closed Sep 15, 2019.
  1. I'm a renter, not a home owner.

    0 vote(s)
    0.0%
  2. Refinancing is not on my radar.

    2 vote(s)
    14.3%
  3. Refinancing my home is under

    0 vote(s)
    0.0%
  4. I've already refinanced my home.

    4 vote(s)
    28.6%
  5. No mortgage--my home is paid off.

    8 vote(s)
    57.1%
  1. Rich

    Rich DBSTalk Club DBSTalk Club

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    Piscataway, NJ
    And are intelligent enough to get that monkey off your back. Always equated mortgages with stress and suffering. Making that nut every month is an ordeal.

    Rich
     
    jimmie57 likes this.
  2. SledgeHammer

    SledgeHammer Icon

    3,177
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    Dec 28, 2007
    We're about the same age then.

    My car is long paid off, it was an expensive luxury car at the time, but it was my "dream car" then :) and I gamed the system to get 0% interest on it. I haven't gotten anything newer because I take great care of it, so it still looks brand new with 80k miles on it (short commute) and because its a fan boy / enthusiast car, I can still get at least 30% of my money back and it's been, as you like to say :D, ticking up in value. Also, can't really find a car that I like. There are some cars I like on the outside, but the interiors are ugly.

    401k is maxed out. Always pay my credit card off. Credit card seems to be one of the best cash back deals for my spending habits. Plus, as I mentioned, the 3% checking account.

    I'm in the stock market, in individual stocks, but I'm not overly aggressive or day trade.

    I'd also like to retire at a similar age.

    Probably not going to do any home renos on my current home other then maintenance as there doesn't seem to be much bang for my buck there. My house value is also increasing and has doubled since I bought it, but this isn't a forever home, so I'd rather horde the cash to upgrade to one. I know a lot of people do home renos "for their enjoyment"... but to me, if I'm not going to see a return on it, I'm probably not going to do it (in this house). You can't price yourself out of your neighborhood and this isn't a neighborhood where people upgrade their houses, lol... nice neighborhood though, but still a mid range tract, if there is such a thing in So Cal. Lol.

    You're leaving a ton of money on the table being overly passive, but if that's your thing, that's your thing. My sister is the same way, but then again, she has 3 kids to take care of... (2 actual kids and a deadbeat husband :D).
     
  3. Mark Holtz

    Mark Holtz New Texan

    11,061
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    Richardson,...
    Here is the latest averages from Freddie Mac. They ticked up a little bit.

    Mortgage_Rates_Drop_-_Freddie_Mac_-_Google_Chrome 2019-09-14 07-04-51.png

    My 2013 Buick Verano has 76K miles on it, and is fully paid off. The low miles is because I only had a 8.6 commute to work when I living in California, and worked from home part of the time, and partially because I'm a half-mile away from work by car in my current residence, but three-quarters of a mile by foot because I use a crosswalk. Nothing special about that car, however, I do want Android Auto in my next vehicle, and Android Automotive is a strong possibility.

    Southern California? That explains everything...

    When I learned that I had the opportunity to escape California and move to Texas at the beginning of the year, I made up a wish list of what I was looking for a home. A big consideration was that it was close to work, and that, for all intents and purposes, it was my forever home. There were some compromises in that I was paying a price premium over my relocated co-workers, and I was getting an older home. I lucked out in that I got a single-story home in a good neighborhood, extremely close to work, has gigabit Internet, the Dallas Light Rail station is five minutes away by car, close to good medical, and has a pool. In contrast, my co-workers are looking at Allen, Prosper, and McKinney for their homes, meaning at least a 30-45 minute commute each way on US-75. No thank you. Of course, being in a older home, there are things that need fixing, including new, more energy efficient windows and a replacement of the electric panel.
     
  4. billsharpe

    billsharpe Hall Of Fame

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    Southern...
    Our first mortgage was $91 per month, including property tax and insurance escrow. Our last mortgage, paid off 18 years ago was $293, not including tax and insurance. It's indeed nice to have no mortgage and thanks to Proposition 13 a very low property tax. We only put about 5000 miles on our car each year so the high price of gas in California doesn't really bother us.
     
  5. Rich

    Rich DBSTalk Club DBSTalk Club

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    Piscataway, NJ
    Property taxes here are a killer. Can't get that monkey off our backs.

    Rich
     
  6. lparsons21

    lparsons21 Hall Of Fame

    5,174
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    Mar 4, 2006
    Herrin, IL
    Here too! I’ve often thought when I bought my house a couple years ago, why didn’t I move about 60 miles away and have my property taxes be 1/3 of what they are here!


    Sent from my iPad using Tapatalk Pro
     
  7. Rich

    Rich DBSTalk Club DBSTalk Club

    35,496
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    Piscataway, NJ
    Same here, I could move to PA and spend a lot less on living expenses and taxes. And PA's less than 60 miles away, I think.

    Rich
     
  8. Mark Holtz

    Mark Holtz New Texan

    11,061
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    Richardson,...
    The limitation on property tax increases thanks to 1978's Proposition 13 was the only thing that was keeping me in California, especially on property that my mother owned since 1978. But, for the past decade, I said that if a good opportunity to leave the state presented itself, I was going to seize it. That occurred late last year. I stated it was a #allin bet. I have no regrets.
     
    Rich likes this.
  9. Mark Holtz

    Mark Holtz New Texan

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    Richardson,...
    Mortgage_Rates_Jump_-_Freddie_Mac_-_Google_Chrome 2019-09-19 16-03-33.png
     
  10. Mark Holtz

    Mark Holtz New Texan

    11,061
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    Mar 23, 2002
    Richardson,...
    Mortgage_Rates_Decrease_-_Freddie_Mac_-_Google_Chr 2019-10-11 10-33-17.png

    As you can see from this chart on Feddie Mac, the average (mean) rates have dropped after having an upward trend. I'm sure if you look around hard enough, you can find even better rates.
     
  11. Mark Holtz

    Mark Holtz New Texan

    11,061
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    Richardson,...
    Here are the current mortgage rates per Freddie Mac:
    Mortgage_Rates_-_Freddie_Mac_-_Google_Chrome 2019-12-26 10-26-41.png
     
  12. Mark Holtz

    Mark Holtz New Texan

    11,061
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    Mar 23, 2002
    Richardson,...
    And, I achieved a goal today. I currently owe just under $100k on my $116k mortgage (including closing costs and escrow account). This is where I wanted to be at this point, but now, I'm below the point where some financial institutions would consider refinancing. Having said that, the historical low for 15 year fixed going back to September, 1991 is 2.66% per Freddie Mac, which is under the ¾-1% threshold for a refinance to make sense anyways. I may look at recasting the mortgage in the future if things get tight. But, for right now, take advantage of the good times.
     
    4HiMarks likes this.
  13. 4HiMarks

    4HiMarks Hall Of Fame

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    Laurel, MD
    I just dropped below $100k too. My mortgage was a little more than your $116k, but my last refi was for 10 years at 2.5%, so the principal balance is dropping quickly. My GF kept saying she wants the balance paid off before we retire, but I think I finally convinced her it doesn't make sense to take money out of retirement accounts that are earning much higher returns to pay off a 2.5% loan.
     
  14. Mark Holtz

    Mark Holtz New Texan

    11,061
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    Mar 23, 2002
    Richardson,...
    I respect your GF's desire to have a home paid off before retirement. My priority, however, is to maximize my retirement contributions first, and then accelerate the payoff of my home. This while maintaining an emergency fund and having a HVAC replacement stare me in the face. Thus, no big vacations for a while, and making sure that 7yo vehicle with 75k miles on it keeps running. My home payment now is about 49% escrow account for tax and insurance (yay 2.1% Texas property tax), and 51% actual loan payment.
     
  15. 4HiMarks

    4HiMarks Hall Of Fame

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    Laurel, MD
    I'm paying about 1/3 for escrow and interest and 2/3 for principal.
     
  16. Mark Holtz

    Mark Holtz New Texan

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    Richardson,...
    FWIW from Freddie Mac...
    Mortgage_Rates_-_Freddie_Mac_-_Google_Chrome 2020-01-26 20-20-26.png

    In computing the difference between when I completed my refinance in September at 3.25% verses now at 3.04 percent, my payment difference would have been.... $11.79. So waiting to refinance for a lower interest rate (30 year at 4.875%) would have meant that I would have paid more in interest while I was waiting.
     
  17. Mark Holtz

    Mark Holtz New Texan

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    Richardson,...
    Oh.... wow! Again, this is an average per Freddie Mac.

    Mortgage_Rates_-_Freddie_Mac_-_Google_Chrome 2020-02-08 10-27-04.png
     
  18. Mark Holtz

    Mark Holtz New Texan

    11,061
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    Mar 23, 2002
    Richardson,...
    I looked at my latest statement, and it's as follows if I do just the required payment:

    34.1% - Principal
    16.7% - Interest
    49.2% - Escrow Account for property tax and homeowners insurance.
     
  19. billsharpe

    billsharpe Hall Of Fame

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    I don't recall the breakdown but my first house monthly payment in 1957 was $91, including interest, principal, and escrow for tax/insurance.
     
  20. Mark Holtz

    Mark Holtz New Texan

    11,061
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    Richardson,...
    Per Dollar Times, $91 back then is worth ~$847.27 today. Having said that, the US Census states the average income in $1957 was $5,000.
     

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