Mortgage Rate drops - Page 4 - Chevelle Tech
Bench Racing Stories, cruising and more.

 105Likes
Reply
 
LinkBack Thread Tools Search this Thread Display Modes
post #46 of 64 (permalink) Old Jul 16th, 19, 5:18 PM
Senior Tech Team
"The Stig"
 
Join Date: Nov 2000
Location: Mantorville, MN
Posts: 15,138
Re: Mortgage Rate drops

Quote:
Originally Posted by dyno jonn View Post
Interest is just rent applied to money.
This is true.

Put another way, on that 10-year loan for $40k, the "rent" averages out to $62.20/mo (compared to the $1000/mo shop rent quoted above)
427L88 likes this.

Derek Kiefer, member of Minnesota's
To view links or images in signatures your post count must be 0 or greater. You currently have 0 posts.


To view links or images in signatures your post count must be 0 or greater. You currently have 0 posts.
-
To view links or images in signatures your post count must be 0 or greater. You currently have 0 posts.
Derek69SS is online now  
Sponsored Links
Advertisement
 
post #47 of 64 (permalink) Old Jul 16th, 19, 6:27 PM
Gold Member
Gene
 
Join Date: Sep 2000
Location: Buffalo NY
Posts: 14,015
Re: Mortgage Rate drops

To dyno jon's point, low interest rates do contribute to lack of discipline.
Derek69SS and blue_69_malibu like this.

Gene
ACES 3112/Team Chevelle Gold #62
Be big, be a 'builder'!
427L88 is offline  
post #48 of 64 (permalink) Old Jul 17th, 19, 1:42 AM
Tech Team
James
 
Join Date: Jul 2016
Location: Roseville, CA
Posts: 924
Re: Mortgage Rate drops

Quote:
Originally Posted by dyno jonn View Post
Interest is just rent applied to money.





Sounds like many of you weren't around (or maybe just weren't buying houses) when interest on home loans were 10.375. I paid that when I bought my first house. It was a real incentive to pay it off early. I paid off a 15 year loan in only 7 1/2 years with no refinancing and no PMI.


Iíd disagree with the thought interest is just rent applied to money. My equity in my home has always outpaced the interest on my home. Iíve cashed out twice on that investment for a better home. Will it always be that way? Likely not, but itís worked well so far. When it comes time to retire, I will cash out again and move to a different state where I can pay cash for a much cheaper house.


Sent from my iPhone using Tapatalk
bry66 likes this.
69Chvll is offline  
post #49 of 64 (permalink) Old Jul 17th, 19, 10:20 AM
Tech Team
 
Join Date: Mar 2017
Location: n.w.iowa
Posts: 322
Re: Mortgage Rate drops

my house i bought 9 years ago had gone up 50% in value since i bought it.another 7 years and i will be looking to cash out,hop in the motorhome and tour the country for awhile.
64elkynss and blue_69_malibu like this.
cherokeepeople is offline  
post #50 of 64 (permalink) Old Jul 17th, 19, 10:48 AM
Tech Team
Dennis
 
Join Date: Sep 2000
Location: Walnut Creek, CA
Posts: 406
Garage
Re: Mortgage Rate drops

This site (which I found with a random search) will better explain the amortization schedule of a loan.

https://financialmentor.com/calculat...ation-schedule

It shows:
The interest paid each month
The principle paid each month
The total payment for the month
The remaining balance of the loan each month for the life of the loan
You can even enter your taxes and insurance to get a complete cost of ownership.

I find that this type of resolution goes a long way to helping someone more clearly understand what they are signing up for. It also shows them what their payoff would be at any point in the life of the loan.
1966_L78 and Steve R like this.

66 Chevelle hardtop - LFX 3.6 liter V6/6L50 6 speed auto trans, 3.07 10 bolt, full Hotchkis suspension, Wilwood 4 wheel discs, white with red interior, cowl hood.
67_LS1 is online now  
post #51 of 64 (permalink) Old Jul 17th, 19, 1:12 PM
Tech Team
Dan
 
Join Date: Sep 2017
Location: Outside of Philadelphia
Posts: 644
Garage
Re: Mortgage Rate drops

Quote:
Originally Posted by 67_LS1 View Post
This site (which I found with a random search) will better explain the amortization schedule of a loan.

https://financialmentor.com/calculat...ation-schedule

It shows:
The interest paid each month
The principle paid each month
The total payment for the month
The remaining balance of the loan each month for the life of the loan
You can even enter your taxes and insurance to get a complete cost of ownership.

I find that this type of resolution goes a long way to helping someone more clearly understand what they are signing up for. It also shows them what their payoff would be at any point in the life of the loan.
At one point i found a mortgage calculator that would figure out how much faster you would pay off your mortgage by adding "X" amount of dollars each month. I was at a point in my life where i wasnt super happy with how things were going at work, and sat down and took a hard look at things if i didnt have this job. I figured without this job some of my luxury items may have to go away, and at that point it was my weekend place that might have to give. so i put on my happy face at work, figured out how much i needed to put in the bank to keep my accounts running flat (not saving anything) and i tossed all the extra money that would have just gone into the bank to pay off that mortgage. I did it remarkably quick.

i have refinanced every home i had, thinking i would stay at that house longer than i did. I just bought this house in April. Who knows if im staying here for how long. I think i might just toss some extra at the principal on this one, rather than paying closing costs on a loan again.
Truth be told, i'm almost 50, had like 13 years left on my old house, but went back into a 30 year mortgage - basically i was going for "i wanna pay the least amount per month." Who knows how long i will be here.....nobody. When rates maybe hit rock bottom, i might look at a 15 year, but i'm good with were im at. I think the first loan i ever got was somewhere around 7%. Growing up, my parents put an addition on our house because it was waaay cheaper than moving....i think interest rates were at like 15%. Lets face it. 4.5% is really low too.
mr 4 speed likes this.
70montee is offline  
post #52 of 64 (permalink) Old Jul 17th, 19, 2:54 PM
Lifetime Premium Member
Tony
 
Join Date: May 1999
Location: Southern Oregon
Posts: 703
Re: Mortgage Rate drops

why not just buy down a point on a home loan? For example:

$400,000 w/ $100,000 down = $300,000 loan @ 4% on 30 yr fixed: $1,432/mo w/ $215,608 total interest

buy down point = $3,000, now $300,000 loan @ 3% on 30 yr fixed: $1,264/mo w/ $155,332 total interest


Assuming you never refi or pay extra on the loan, that's a savings of over $60,000 for a $3,000 upfront payment and $168 less each month on your mortgage. Say you needed that $3,000 for a 6 month emergency fund for the future, you could pay that $168 back each month into your fund and it would only take 18 months. Depending on your income, this would be smart I would think, but I'm no math wiz, that's for sure! lol

Yeah, we're runnin' a little bit hot tonight,
I can barely see the road from the heat comin' off,
You know what I'm sayin',
Ahh, you reach down, put it between my legs 'n
ease the seat back,
She's runnin', I'm flyin',
Right behind in the rear view mirror now,
Got the fearin', power steerin',
Pistons poppin', ain't no stoppin' now,
PANAMA!
64elkynss is offline  
post #53 of 64 (permalink) Old Jul 17th, 19, 3:24 PM
Senior Tech Team
Jon N.
 
Join Date: Jan 2003
Location: back in the "Hew-Hess-Hay"
Posts: 3,947
Re: Mortgage Rate drops

Quote:
Originally Posted by 64elkynss View Post

why not just buy down a point on a home loan?

While you are at it, why not ask your prospective lender what the difference in monthly payment would be on a 15 year mortgage verses a 30 year? Difference is normally very minimal, but total cash outlay is extreme.

Jon N.

The only reason someone would want insurance is if they want to pay someone elses bills or want someone else to pay their bills.

BIGOT is a word used by people that can't use logical reasoning to prove that you are wrong when you don't agree with them.
dyno jonn is online now  
post #54 of 64 (permalink) Old Jul 17th, 19, 6:33 PM
Lifetime Premium Member
Tony
 
Join Date: May 1999
Location: Southern Oregon
Posts: 703
Re: Mortgage Rate drops

Quote:
Originally Posted by dyno jonn View Post
While you are at it, why not ask your prospective lender what the difference in monthly payment would be on a 15 year mortgage verses a 30 year? Difference is normally very minimal, but total cash outlay is extreme.
Minimal? Using my example its about $700/month more. That's minimal?

Yeah, we're runnin' a little bit hot tonight,
I can barely see the road from the heat comin' off,
You know what I'm sayin',
Ahh, you reach down, put it between my legs 'n
ease the seat back,
She's runnin', I'm flyin',
Right behind in the rear view mirror now,
Got the fearin', power steerin',
Pistons poppin', ain't no stoppin' now,
PANAMA!
64elkynss is offline  
post #55 of 64 (permalink) Old Jul 17th, 19, 7:18 PM
Senior Tech Team
Jon N.
 
Join Date: Jan 2003
Location: back in the "Hew-Hess-Hay"
Posts: 3,947
Re: Mortgage Rate drops

In my case the payment would have only dropped by around 20%, so I went with the bigger payment for a shorter time.

Jon N.

The only reason someone would want insurance is if they want to pay someone elses bills or want someone else to pay their bills.

BIGOT is a word used by people that can't use logical reasoning to prove that you are wrong when you don't agree with them.
dyno jonn is online now  
post #56 of 64 (permalink) Old Jul 17th, 19, 11:37 PM
Tech Team
Dennis
 
Join Date: Sep 2000
Location: Walnut Creek, CA
Posts: 406
Garage
Re: Mortgage Rate drops

Quote:
Originally Posted by 64elkynss View Post
why not just buy down a point on a home loan? For example:

$400,000 w/ $100,000 down = $300,000 loan @ 4% on 30 yr fixed: $1,432/mo w/ $215,608 total interest

buy down point = $3,000, now $300,000 loan @ 3% on 30 yr fixed: $1,264/mo w/ $155,332 total interest


Assuming you never refi or pay extra on the loan, that's a savings of over $60,000 for a $3,000 upfront payment and $168 less each month on your mortgage. Say you needed that $3,000 for a 6 month emergency fund for the future, you could pay that $168 back each month into your fund and it would only take 18 months. Depending on your income, this would be smart I would think, but I'm no math wiz, that's for sure! lol
Iíve heard of buying down points, but 1 point for $3k seems absurdly cheap. Who wouldnít do that?
Steve R likes this.

66 Chevelle hardtop - LFX 3.6 liter V6/6L50 6 speed auto trans, 3.07 10 bolt, full Hotchkis suspension, Wilwood 4 wheel discs, white with red interior, cowl hood.
67_LS1 is online now  
post #57 of 64 (permalink) Old Jul 17th, 19, 11:42 PM
Tech Team
Dennis
 
Join Date: Sep 2000
Location: Walnut Creek, CA
Posts: 406
Garage
Re: Mortgage Rate drops

Ah...got it...
So, lenders will typically drop your interest rate .25% fir each point that you buy, up to a limit. So if you wanted to drop your interest rate from say 4 to 3, you would need to buy 4 points.
Still worth it to me if your getting a 30 year loan and plan to keep the property AND the loan long term
No since buying points down if your going to refi it.
64elkynss likes this.

66 Chevelle hardtop - LFX 3.6 liter V6/6L50 6 speed auto trans, 3.07 10 bolt, full Hotchkis suspension, Wilwood 4 wheel discs, white with red interior, cowl hood.
67_LS1 is online now  
post #58 of 64 (permalink) Old Jul 18th, 19, 12:29 AM
Lifetime Premium Member
Tony
 
Join Date: Apr 1999
Location: Folsom, CA
Posts: 17,003
Garage
Re: Mortgage Rate drops

Quote:
Originally Posted by 67_LS1 View Post
Ah...got it...
So, lenders will typically drop your interest rate .25% fir each point that you buy, up to a limit. So if you wanted to drop your interest rate from say 4 to 3, you would need to buy 4 points.
Still worth it to me if your getting a 30 year loan and plan to keep the property AND the loan long term
No since buying points down if your going to refi it.
Been about 6 years since I refi'd, but IIRC, a "point" is 1%. Now you can usually buy down in less than 1 point increments.


The problem with "planning" on a refi, is you don't know what the rates will be when you are ready to refi...


Quote:
Originally Posted by 428L88
...low interest rates do contribute to lack of discipline.
That all depends on the individual, and their discipline...


We bought our home back in 2007. Interest rate was about 6.5% (toptier credit scores and $240k down from home we sold). Got a 30-year fixed, with a payment of about $2695 (including taxes and insurance), so I literally rounded up and paid an even $2700 every month... About 1+ years later, we refi'd when rates dropped to around 4.75%. Paid all fee's out of pocket (figured the monthly savings would clear that after a few months (something like 8-10 months). No cash out, just a lower rate with the same balance (and starting another 30-year loan).

I ended up making the exact same $2700 payment...

Refi'd again in 2012, and thought of a 3.25% (or maybe 3.5%?) 30-year, but decided to go with a 2.75% 15-year... Total payments went up, but still less than the $2700, which I continue to pay... I estimated the "15-year" loan will be paid off in about 12 years ( not set, because my "minimum payment" changes due to taxes and insurance premiums)Ö

So that's going to put us around 17 years to pay off our $300k loan... But we are so used to the payment and saving, that I hardly think about it anymore... Of course, cashing-outon a refi to buy that mid-year Corvette is always right there...

We thought about increasing our payment with wage increases, but ended up increasing our 401k and IRA contributions (for the past 10+ years, I think EVERY wage increase went into some form of retirement or "savings"...), and started putting more money away to "help" the kids with college expenses (we told them we'd try to help with 3 years of college, but "commuting" from home- two universities nearby or local community college- won't count toward those years)Ö

Just hope I can keep my Chevelle...
64elkynss likes this.

Once you go RAT, you never go back...
TC #1366

To view links or images in signatures your post count must be 0 or greater. You currently have 0 posts.

To view links or images in signatures your post count must be 0 or greater. You currently have 0 posts.
Sold

To view links or images in signatures your post count must be 0 or greater. You currently have 0 posts.
Sold
To view links or images in signatures your post count must be 0 or greater. You currently have 0 posts.


To view links or images in signatures your post count must be 0 or greater. You currently have 0 posts.
&
To view links or images in signatures your post count must be 0 or greater. You currently have 0 posts.


To view links or images in signatures your post count must be 0 or greater. You currently have 0 posts.
1966_L78 is offline  
post #59 of 64 (permalink) Old Jul 18th, 19, 12:43 AM
Tech Team
Dennis
 
Join Date: Sep 2000
Location: Walnut Creek, CA
Posts: 406
Garage
Re: Mortgage Rate drops

I have owned a lot of real estate over the years. Still own three properties.
The one thing a never did was take cash out in a refi. I decided never to when in my early 20ís a buddy refiíd a house to buy a boat. So in essence he was paying on the boat for 30 years. He sold the boat about 5 years later and did get some money for it but he still owed the mortgage.
64elkynss likes this.

66 Chevelle hardtop - LFX 3.6 liter V6/6L50 6 speed auto trans, 3.07 10 bolt, full Hotchkis suspension, Wilwood 4 wheel discs, white with red interior, cowl hood.
67_LS1 is online now  
post #60 of 64 (permalink) Old Jul 18th, 19, 1:58 AM
Senior Tech Team
 
Join Date: Feb 2000
Location: SF Bay Area
Posts: 9,772
Re: Mortgage Rate drops

Quote:
Originally Posted by 67_LS1 View Post
I have owned a lot of real estate over the years. Still own three properties.
The one thing a never did was take cash out in a refi. I decided never to when in my early 20ís a buddy refiíd a house to buy a boat. So in essence he was paying on the boat for 30 years. He sold the boat about 5 years later and did get some money for it but he still owed the mortgage.
Iíd agree, never take money out when you refinance. I knew someone that refinanced a couple of times, each time he took out the equity to build his 56 Chevy and buy other toys. He lost his job before he finished the car and had to sell it at a huge. He ultimately lost the house. He might have been able to keep the house if he took in a renter or two even with a lower paying job, but he put himself in a position that the numbers didnít work without something close to his original income.

Steve R
Steve R is offline  
Sponsored Links
Advertisement
 
Reply

Quick Reply
Message:
Options

Register Now



In order to be able to post messages on the Chevelle Tech forums, you must first register.
Please enter your desired user name, your email address and other required details in the form below.

User Name:
Password
Please enter a password for your user account. Note that passwords are case-sensitive.

Password:


Confirm Password:
Email Address
Please enter a valid email address. Note, you will be sent a confirmation request to this address.

Email Address:
OR

Log-in










Thread Tools Search this Thread
Show Printable Version Show Printable Version
Email this Page Email this Page
Search this Thread:

Advanced Search
Display Modes
Linear Mode Linear Mode



Posting Rules  
You may post new threads
You may post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On

 
For the best viewing experience please update your browser to Google Chrome