Mortgage Forbearance

[svelte]

[quote=Coronita]
If his current loan is .5% or higher than what he could get right now via refinancing, to me refinancing seems like a much better option because you can lower your monthly payment and also save on interest… After a refinance , he could still make the same monthly payment on his new loan so that more of it goes toward principle upfront, over time he could bring in the loan a few years….[/quote]

I think you’ve answered your own question with the “over time” words.

Refinancing wouldn’t get him NEAR as much cash up front during CV as not making payments would.

Let’s run a theoretical. Say he has a loan in the 450K range. Not unusual for the San Diego.

And if you think it would make sense to refi if he can save 0.5% interest rate. Let’s start him out at 4.5% and say he can get down to 4%.

A current 4.5% loan would be $2,281 mo for 30 years
A refi-ed 4% loan would be $2148 mo for 30 years

He’d save $133 a month. In three months time, he could save $6800 if he didn’t make the payments, or $400 if he refinanced. Not even close.

Let’s say he was able to skip a payment during the refi process (also pretty common)…that would make it $6800 to $2900.

Still not close. If you need money right now and in the short term, refi is not the way to get it. Not making mortgage payments is.

In the real long term, refi is the better solution obviously.

[Coronita]

except he doesn’t sound like he really needs the money now, and he could shoot himself in the foot of he needs access to more money beyond just 3 months. Do lenders plan on keeping a record that you skipped 3 months of payments? And will that information be available and considered the next time you need to refinance or take out a HELOC? Can one even open a HELOC if one’s first loan isn’t paid to current? I guess he can find out. Or get the HELOC first and then ask for a forbearance? Then again that might look suspicious to the first lender determining if they will grant a forbearance if they check and a HELOC was open recently. Meh, too much work for me…

Its been awhile since I refinanced but the last.time I did it, I seem to remember they went though my existing loan and HELOC with a fine tooth comb to make sure I was current on both. Then again, it’s been awhile since I had a loan and maybe things are different now.

[svelte]

[quote=Coronita]except he doesn’t sound like he really needs the money now, and he could shoot himself in the foot of he needs access to more money beyond just 3 months. [/quote]

Using the numbers I roughed in above, it would take him 2.5 years just to get a single dollar ahead with your method.

Just a single dollar. And that’s if he gets to skip a payment when doing the refinance.

[Coronita]

[quote=svelte][quote=Coronita]except he doesn’t sound like he really needs the money now, and he could shoot himself in the foot of he needs access to more money beyond just 3 months. [/quote]

Using the numbers I roughed in above, it would take him 2.5 years just to get a single dollar ahead with your method.

Just a single dollar. And that’s if he gets to skip a payment when doing the refinance.[/quote]

He could get a slightly higher rate but still below his current and get a few thousand in rebate up front, what AN use to do. He could do a slight cash out refi give himself more than a 3 month cushion of he really needed the cash soon. None of which would make sense if he doesn’t actually need the cash up front now. And if he just want an emergency slush fund to tap, that’s what a HELOC is for. But again, he said it himself. He doesn’t really need the money he has plenty of emergency reserves, so this seems like it’s just an exercise to see if the system can be gamed for the sake of gaming it. So with that, like I said, go for it

[svelte]

[quote=Coronita]
He could get a slightly higher rate but still below his current and get a few thousand in rebate up front, what AN use to do. He could do a slight cash out refi give himself more than a 3 month cushion of he really needed the cash soon. [/quote]

Neither of those choices does much to make your solution a better choice because they drive the monthly payment higher – which was the centerpiece of your option to begin with.

[PCinSD]

[quote=FlyerInHi][quote=PCinSD][quote=FlyerInHi]
Everything you write speaks do me. I feel like I get it whenever you write it.[/quote]

Ikr?

A rare, yet not entirely unexpected Adult Hallmark moment right there. Please update us if you guys hookup.[/quote]

Scaredy is the most beautiful writer here. There’s a certain quality, a je ne sais quoi. I am in admiration, in love.[/quote]

Easy Disco. I saw him first. And he’s way out of your league.

[FlyerInHi]

will barnaby qualify for a refi if his income dropped quite a bit?

Why not apply for forbearance? There is no fee for doing it; and who knows, if we have a depression, forbearance maybe extended for a whole year or more

[barnaby33]

Kind of hard to imagine we aren’t in depression already. 25 million people lost their jobs in the last 4 weeks. That’s just the number of folks who qualify for the insurance programs. There are more than likely equal numbers or more who are contractors or otherwise fall through the cracks.

I didn’t ask the question or make the initial post for myself, it was a category question, though Coronita did offer several helpful ripostes once he got done with his moralizing.

Sour grapes, fuck yes! There are a few people still on this blog who were here throughout the bubble (myself included) and it’s implosion. People who spent years preparing and not being dipshits, only to watch the Fed steal from them at the point of an Excel spreadsheet. People who thought we had a body of law to deal with fraud only to find out it’s only fraud when it’s not the wealthy doing it. The only person who went to jail was Martha Stewart. If you’re not angry, you just aren’t paying attention.

This bubble, much like the last is nothing more than fancy math to cover inter generational warfare. I’m Gen X and I literally weep for what the Boomers have done to the Millenials and done with a straight face.

All that having been said, we’re being dealt a certain hand of cards and I asked, what can I do to maximize my security given the current circumstances. Save your morality plays for those who haven’t already seen what those in power will do to preserve their place.

Josh

[FlyerInHi]

[quote=barnaby33]
I didn’t ask the question or make the initial post for myself, it was a category question, though Coronita did offer several helpful ripostes once he got done with his moralizing.
[/quote]

Flu/coronita has a hard time accepting we’re in a HUGE recession after making fun of people who would prepare for one.

Flu often refuses to look at the aggregate big picture. It’s always about him winning.

If people have loss of income they should qualify for mortgage forbearance. They should apply and conserve cash. That’s only prudent.

[Coronita]

[quote=FlyerInHi][quote=barnaby33]
I didn’t ask the question or make the initial post for myself, it was a category question, though Coronita did offer several helpful ripostes once he got done with his moralizing.
[/quote]

Flu/coronita has a hard time accepting we’re in a HUGE recession after making fun of people who would prepare for one.

Flu often refuses to look at the aggregate big picture. It’s always about him winning.

If people have loss of income they should qualify for mortgage forbearance. They should apply and conserve cash. That’s only prudent.[/quote]

Well Brian/FlyerInHi, I have to say, you did pretty well. You lasted almost 2 weeks before reverting back to the shithead you normally are before volleying those initiated personal attacks, despite getting all butt hurt when you get them yourself. Congrats, I think 2 weeks was a record for you. And you got it completely wrong. I have the deepest sympathy for almost everyone who is impacted by this horrific pandemic event, however they are impacted, except maybe you Brian. But good luck to you. Lol.

Josh, if you want to get a mortgage forbearance, go for it. I was merely saying that (1) if you don’t really need one it might not be worth the hassle and (2) if you have to misrepresent your financial state in order to get one, you also might want to reconsider that. But, do what you got to do. I have a feeling you’re fortunate and not nearly as impacted as people who really need this, given that you seem to fit the mold of being pretty financially savy.

[FlyerInHi]

Flu, read back my comment on the recession thread. I try to focus on the economy as a whole. You are the one who likes to infer personal motivations. I do it rarely.

The economy has cycles and there are winners and losers. The economy will go through cycles, regardless.

As a general rule, when homeowners no longer have the income they qualified with when they obtained the mortgage, they should qualify for forbearance. It’s a zero interest loan which allow households to conserve cash. It only makes sense to apply.
Depending is how the economy goes, the forbearance may be extended and borrowers may not required to catch up. It’s an evolving situation.

[barnaby33]

Get a room you two.
Josh

[gzz]

The three month forbearance is essentially a tiny HELOC folded into your mortgage balance at the same rate and terms. As long as its paid I don’t see why people get moralistic about it. If you find getting e.g., $8000 at 3.75% apr attractive, you’re probably not rolling around in excess cash.

At the moment about 6.7% of mortgages are in this program.

[Coronita]

I changed my mind. If you still have a mortgage, get one if you can, for up to a year. Why not?

I’m really curious how this is going to work out so please do report back how it works out for you if you plan on trailblazing this.

Logistically, I’m also curious how would this work wrto mortgages with an impound account that’s paying for the prop tax and insurance once you stop making payments. Do they still pay and you have a negative balance on your impound or do they stop doing the impound and you need to deal with the insurance and prop tax payments?

[Coronita]

https://www.cnn.com/2020/05/20/success/mortgage-forbearance-homeowner-complaints-coronavirus/index.html

told you these forebearances have some side effects.

Can’t refinance loans.
Can’t take out new loans.
(IE, if you found a new property at a good price and need a new loan, you might not be able to get one).

Still think the UI benefit gravy train is the better option to go.

[Author]

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