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Raybyrnes.
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March 18, 2008 at 7:49 AM #12158March 18, 2008 at 8:13 AM #172242
CoronitaParticipantRaybarnes,
I hear an echo. Didn't I bring this up before? 🙂 J/K. Actually, I thought about this, but haven't looked into it yet . I think it *might* work if you already are making extra payments off of the mortgage, but just can't do it off a lump sum. For example, I probably pay and extra 3000000 yen /year off principle. But my paycheck comes in monthly, so Ican't for example pay the entire 3000000 yen say at the beginning if the year. BUT, if I borrow 2800000 yen from a low interest heloc and make 1 lump sum at the beginning of the year, and pay off my heloc with funds that I would have used to normally make an extra principle payment, it *might* turn out that my reduced principle of my mortage carried across the remainder of the year will save me more money than the extra interest that I am paying off of my Heloc balance, which I end up paying off each year. There's probably some magic number principle payment that makes this worthwhile the hassle. But I haven't looked into details of implementation.
The other thing might be some have mentioned getting heloc's these days are very difficult. I would say this would eliminate people that are upside down or even close to upside down. In my particular case, I already paid off about 35% of the principle, so this probably won't be a big issue for me, since I don't think my home price has fallen by 35% from the price that I purchased (yet).
[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]
—– Sour grapes for everyone!
March 18, 2008 at 8:13 AM #172575CoronitaParticipantRaybarnes,
I hear an echo. Didn't I bring this up before? 🙂 J/K. Actually, I thought about this, but haven't looked into it yet . I think it *might* work if you already are making extra payments off of the mortgage, but just can't do it off a lump sum. For example, I probably pay and extra 3000000 yen /year off principle. But my paycheck comes in monthly, so Ican't for example pay the entire 3000000 yen say at the beginning if the year. BUT, if I borrow 2800000 yen from a low interest heloc and make 1 lump sum at the beginning of the year, and pay off my heloc with funds that I would have used to normally make an extra principle payment, it *might* turn out that my reduced principle of my mortage carried across the remainder of the year will save me more money than the extra interest that I am paying off of my Heloc balance, which I end up paying off each year. There's probably some magic number principle payment that makes this worthwhile the hassle. But I haven't looked into details of implementation.
The other thing might be some have mentioned getting heloc's these days are very difficult. I would say this would eliminate people that are upside down or even close to upside down. In my particular case, I already paid off about 35% of the principle, so this probably won't be a big issue for me, since I don't think my home price has fallen by 35% from the price that I purchased (yet).
[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]
—– Sour grapes for everyone!
March 18, 2008 at 8:13 AM #172580CoronitaParticipantRaybarnes,
I hear an echo. Didn't I bring this up before? 🙂 J/K. Actually, I thought about this, but haven't looked into it yet . I think it *might* work if you already are making extra payments off of the mortgage, but just can't do it off a lump sum. For example, I probably pay and extra 3000000 yen /year off principle. But my paycheck comes in monthly, so Ican't for example pay the entire 3000000 yen say at the beginning if the year. BUT, if I borrow 2800000 yen from a low interest heloc and make 1 lump sum at the beginning of the year, and pay off my heloc with funds that I would have used to normally make an extra principle payment, it *might* turn out that my reduced principle of my mortage carried across the remainder of the year will save me more money than the extra interest that I am paying off of my Heloc balance, which I end up paying off each year. There's probably some magic number principle payment that makes this worthwhile the hassle. But I haven't looked into details of implementation.
The other thing might be some have mentioned getting heloc's these days are very difficult. I would say this would eliminate people that are upside down or even close to upside down. In my particular case, I already paid off about 35% of the principle, so this probably won't be a big issue for me, since I don't think my home price has fallen by 35% from the price that I purchased (yet).
[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]
—– Sour grapes for everyone!
March 18, 2008 at 8:13 AM #172598CoronitaParticipantRaybarnes,
I hear an echo. Didn't I bring this up before? 🙂 J/K. Actually, I thought about this, but haven't looked into it yet . I think it *might* work if you already are making extra payments off of the mortgage, but just can't do it off a lump sum. For example, I probably pay and extra 3000000 yen /year off principle. But my paycheck comes in monthly, so Ican't for example pay the entire 3000000 yen say at the beginning if the year. BUT, if I borrow 2800000 yen from a low interest heloc and make 1 lump sum at the beginning of the year, and pay off my heloc with funds that I would have used to normally make an extra principle payment, it *might* turn out that my reduced principle of my mortage carried across the remainder of the year will save me more money than the extra interest that I am paying off of my Heloc balance, which I end up paying off each year. There's probably some magic number principle payment that makes this worthwhile the hassle. But I haven't looked into details of implementation.
The other thing might be some have mentioned getting heloc's these days are very difficult. I would say this would eliminate people that are upside down or even close to upside down. In my particular case, I already paid off about 35% of the principle, so this probably won't be a big issue for me, since I don't think my home price has fallen by 35% from the price that I purchased (yet).
[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]
—– Sour grapes for everyone!
March 18, 2008 at 8:13 AM #172680CoronitaParticipantRaybarnes,
I hear an echo. Didn't I bring this up before? 🙂 J/K. Actually, I thought about this, but haven't looked into it yet . I think it *might* work if you already are making extra payments off of the mortgage, but just can't do it off a lump sum. For example, I probably pay and extra 3000000 yen /year off principle. But my paycheck comes in monthly, so Ican't for example pay the entire 3000000 yen say at the beginning if the year. BUT, if I borrow 2800000 yen from a low interest heloc and make 1 lump sum at the beginning of the year, and pay off my heloc with funds that I would have used to normally make an extra principle payment, it *might* turn out that my reduced principle of my mortage carried across the remainder of the year will save me more money than the extra interest that I am paying off of my Heloc balance, which I end up paying off each year. There's probably some magic number principle payment that makes this worthwhile the hassle. But I haven't looked into details of implementation.
The other thing might be some have mentioned getting heloc's these days are very difficult. I would say this would eliminate people that are upside down or even close to upside down. In my particular case, I already paid off about 35% of the principle, so this probably won't be a big issue for me, since I don't think my home price has fallen by 35% from the price that I purchased (yet).
[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]
—– Sour grapes for everyone!
March 18, 2008 at 8:32 AM #172272Raybyrnes
ParticipantMy thought process here are for those who are in a good equity position.
It would seem taht if I could pay off 100K on a a fixed rate product at 6.125 with Equity line at 4.125 I should be able to recognize an interest saving of 2% on that 100K with a minimal amount of risk. It would appear to be a saving of about 2K in year 1 alone using very rough math. I am not factoring loan amortization, Timae Value Money, Opportunity Cost of capital etc.Just seems like there is a good arbitrage situation here to reduce financing costs.
Like the Sunday Coupon Section. When I see a coupon for 99 cent eggs I cut it out. Seems like there are some coupons available for those willing to cut them out. Only the savings are a lot greater.
March 18, 2008 at 8:32 AM #172607ParticipantMy thought process here are for those who are in a good equity position.
It would seem taht if I could pay off 100K on a a fixed rate product at 6.125 with Equity line at 4.125 I should be able to recognize an interest saving of 2% on that 100K with a minimal amount of risk. It would appear to be a saving of about 2K in year 1 alone using very rough math. I am not factoring loan amortization, Timae Value Money, Opportunity Cost of capital etc.Just seems like there is a good arbitrage situation here to reduce financing costs.
Like the Sunday Coupon Section. When I see a coupon for 99 cent eggs I cut it out. Seems like there are some coupons available for those willing to cut them out. Only the savings are a lot greater.
March 18, 2008 at 8:32 AM #172610ParticipantMy thought process here are for those who are in a good equity position.
It would seem taht if I could pay off 100K on a a fixed rate product at 6.125 with Equity line at 4.125 I should be able to recognize an interest saving of 2% on that 100K with a minimal amount of risk. It would appear to be a saving of about 2K in year 1 alone using very rough math. I am not factoring loan amortization, Timae Value Money, Opportunity Cost of capital etc.Just seems like there is a good arbitrage situation here to reduce financing costs.
Like the Sunday Coupon Section. When I see a coupon for 99 cent eggs I cut it out. Seems like there are some coupons available for those willing to cut them out. Only the savings are a lot greater.
March 18, 2008 at 8:32 AM #172629ParticipantMy thought process here are for those who are in a good equity position.
It would seem taht if I could pay off 100K on a a fixed rate product at 6.125 with Equity line at 4.125 I should be able to recognize an interest saving of 2% on that 100K with a minimal amount of risk. It would appear to be a saving of about 2K in year 1 alone using very rough math. I am not factoring loan amortization, Timae Value Money, Opportunity Cost of capital etc.Just seems like there is a good arbitrage situation here to reduce financing costs.
Like the Sunday Coupon Section. When I see a coupon for 99 cent eggs I cut it out. Seems like there are some coupons available for those willing to cut them out. Only the savings are a lot greater.
March 18, 2008 at 8:32 AM #172708ParticipantMy thought process here are for those who are in a good equity position.
It would seem taht if I could pay off 100K on a a fixed rate product at 6.125 with Equity line at 4.125 I should be able to recognize an interest saving of 2% on that 100K with a minimal amount of risk. It would appear to be a saving of about 2K in year 1 alone using very rough math. I am not factoring loan amortization, Timae Value Money, Opportunity Cost of capital etc.Just seems like there is a good arbitrage situation here to reduce financing costs.
Like the Sunday Coupon Section. When I see a coupon for 99 cent eggs I cut it out. Seems like there are some coupons available for those willing to cut them out. Only the savings are a lot greater.
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