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May 22, 2016 at 4:13 PM #797861May 22, 2016 at 4:40 PM #797863
bearishgurl
ParticipantHLS, if you’re still around, could you opine on how great the COFI ARM mortgage programs of the ’80’s up thru about 2002 USED to be before the secondary market got in the way of all the responsible borrower’s choices?
Since you have decades of experience doing what you do best, surely you will agree that they were a great mortgage loan choice which ended up landing in the dustbin after the “mortgage crisis of the aughts.”
May 22, 2016 at 4:56 PM #797864CoronitaParticipant[quote=bearishgurl]This post is in response to the post below which can be found here:
http://piggington.com/tempted_sell_out_landlording_san_marcos
[quote=flu][quote=no_such_reality]Good point about the interest deduction flu on the rental.
For some there’s great comfort in paying off therimary. I also agree with HLS reasonable debt at reasonable rates is prudent as long as you don’t gamble.
You can lock up your money in equity or use it as the down payment for a small apartment building in a nearby state with a 7-10% cap rate.[/quote]
I totally agree. If you are able to pay off your primary and have sufficient reserves left over to pay for other things in retirement, you really can’t go wrong with the approach you take, and its a matter of personal preference imho. The key I think is as you head into retirement to try to pin your living costs and make them as fixed and consistent as possible. Fixed mortgages can do that if your income streams are more or less fixed. Or if you don’t want to deal with the pita factor of tenants, perhaps sell or 1031 exchange into a primary. I am trying to figure this out so who knows what strategy is optimal. I think I am just trying not to majorly screw this up.
The other thing about being old and retiring is if you sell and buy another property of equal or greater value, you can keep your old property tax rate. So if you had your primary since 1980 like my parents did, then your total property tax on a very nice single family home is probably less than 2 months of rent people pay on a 2 bedroom condo. And I believe if your kids end up inheriting those properties, that property tax rate continues. Prop 13 is just great. That probably is also one of the reasons housing inventory is staying low. Net of doing a house exchange is doing nothing to the inventory.[/quote]
I have posted on this board dozens of times that Props 13, 58 and 193 are the sole reasons for the dearth of available inventory in CA’s most established areas and this dearth of inventory is most pronounced in the most valuable and desirable areas of the state (i.e. mostly coastal). I’ve also posted here repeatedly that Props 58 and 193 have allowed the original Prop 13 benefactors (from 1978 forward who still own same property today) to pass on their base year assessment (as far back as Sept 1975) protected by Prop 13 (plus 2% per year of ownership) on into perpetuity.
So the subject of “inheriting” a CA property with ultra-low property taxes in accordance with Prop 13 is old news. There is currently little to zero incentive for any CA “heirs” to sell free-and-clear property of a deceased parent (or grandparent, if their parent is deceased) when it costs them practically nothing to keep it and occupy it themselves or rent it out forever. The negative ramifications of Props 58/193 are enormous to this state’s coffers as well as exacerbating an already very-tight housing market in CA’s most expensive coastal counties and will continue to do so as long as these sections are still on CA’s books.
As the years roll by, state, county and city coffers suffer more and more as longtime property owners (esp those whose families owned valuable coastal residential and commercial properties prior to Sept 1975 and someone in the family still owns those properties today) pay annual property tax on an assessment equivalent 1/8 to 1/10 of today’s actual market value of said property! In legally being allowed to do so, the “rich” get richer and the “poor” and “middle class” get poorer. For all of the above reasons (as well as the grossly unfair inequity of assessments from neighbor to neighbor on the same street), I believe that Props 58 and 193 should be repealed and the sooner, the better. If that happens, the effects of Prop 13 will eventually die a natural death.
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For whatever reason, flu, you appear on this (as well as the “landlording in San Marcos”) thread to be averse to ARMs. Could this possibly be due to all the “good ones” disappearing before you purchased your first property?
Not ALL ARMs are volatile. My payment on my OWN current ARM has fluctuated up or down (up as often as down) between $0 and $43 month (mostly $3 to $7 month) in the past 8 years. Even before that, it only fluctuated up to ~$77 month (up or down) and as little as $11 mo. My ARM has been fully amortizing every month since I took it out. COFI ARMs have historically been very stable and available only to ALT-A and prime borrowers and were all mostly in-house (portfolio) mortgages offered by commercial banks, mortgage banks and S & L’s. I’ve had three of them in my lifetime and actually would consider another smallish one (10 yr) as partial purchase money on a “retirement” home if they actually still existed with the good terms they once did.
The problem is that after the “mortgage crises,” all the “good” ARMS disappeared from the market. The ones now left have have much less desirable terms in the form of higher margins of 2.75% to >=3.5% (the old margins were originally about 1.75% and later reached 2.5%). The newer ARMS also had/have ultra low “teaser rates” lasting a year and then built-in interest resets (not necessarily closely following a particular index) in increments in the early years of the loan (1 yr, 3 yrs, 5 yrs, etc) to prevent neg am in the later years of the mortgage. These *newer* ARMS also typically have annual caps set at a percentage of the (old) payment instead of a percentage shown in the form of an “interest-rate hike” (i.e. max of 2% per year with a life cap of 10%) and the 3-4 payment choices every month of the old ARMs in the first five years have been taken away. Of course, an annual cap of a percentage of the payment (a common one in recent years has been limited to 7.5% higher or lower than the old payment) is easier for Joe and Jane 6p to understand, but suffice to say, this sleight of hand benefits the bank more than the borrower on a COFI ARM.
The PTB evidently took a “paternalistic view” of mortgage holders in about 2007/08 and decided they were ALL too ignorant to “responsibly handle” an ARM over the long haul. The result is that ARM offerings on the mortgage market have been severely curtailed in the past 7-8 years. Hence, millenials (and even some younger Gen X) do not really understand how ARMs work and are thus afraid of them. The older, sophisticated longtime ARM borrowers (such as myself) ended up being painted with the same broad brush as all the whining “victims” of the “mortgage crisis” who bought more house than they could afford as well as used their primary residence as an ATM.
I believe FIH posted somewhere on this forum recently that he has held a COFI ARM on a SD property since 1989 (now has ~3 years left of pymts). flu, why don’t you ask HIM why he has never refied his (now 27 yo) ARM? Better yet, ask YOURSELF (and be honest!) why he (or I) should refi? There are built-in annual caps on COFI ARMS (as well as other types of ARMS), and even so, I have never, ever had an annual cap result in neg am on any of my ARMs.
Unlike you, I haven’t paid to refi (or refied at no cost [cash out?]) and re-started the mortgage on my principal residence at 30 or 15 years over and over again, as you have posted here numerous times over the past ~9-10 years that you did. That’s great if YOU think it was wise to do so (only to retire your primary mortgage just months/one year from your last refi?) . . . but as NSR suggested here, I’m not a gambler.
flu, I would ask YOU, “What is the point of all those machinations (from ~2006/7 forward?) if you were just planning on paying your residence off early, anyway? How many years elapsed from the purchase of your primary residence and its final payoff? And how many refis (incl cash-outs)/HELOC/2nd TD, etc transactions took place against your residence in the ensuing years?”
I’m not judging you, here. I’m just saying that not everyone lives the way you do, makes the same decisions you do or thinks the way you do. Whether or not I could have actually qualified to refi during my ~15 years of ownership of my latest residence is immaterial to your central argument on this thread recently railing that I should have refied my current mortgage.
Even if I had had a consistent and easily verifiable (W-2) salary at any given time, I would likely not have ever refied. I don’t care for the hassle, the credit inquiries, the employment inquiries, the starting-all-over at year one, having to pay an out-of-area lender due to having my loan sold immediately after loan closing and dealing with a bunch of “garbage charges.” Portfolio lenders, which are far and few between these days, didn’t have any garbage charges and kept all their loans in house (as were their underwriters) and thus escrow officers loved working with them.
flu, you’re a “self-professed math whiz.” Can you tell the Piggs, if, in hindsight, you feel it was “worth it” to continually refi/take out a 2nd TD/HELOC your primary residence only to turn around and pay it off months or a year after your placing your last encumbrance against it?
I have frozen my credit at all three credit repositories (for identity theft/fraud protection which has become rampant in my area in recent years). I haven’t needed to apply for any loans since I bought my current residence, I have all the credit cards (4) I want or will need for the rest of my life and have had them for years (even decades) and have refused all offers from my CC companies to raise my credit limit.
Since I don’t need any credit, I may never “thaw out” my credit reports. If I do, it will only be for ONE repository for less than a week (for a lender of my choice to peek at it) and it will be re-frozen forthwith.
My FICO score at the time of freezing my credit reports was 811 – 822 (851 “Vantage”). It’s going to stay that way because nobody can even see them but me (and any of my current creditors), much less use any of my credit or open accounts in my name by successfully assuming my identity.
I like my life simple that way.
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And the second topic you discussed over in the “landlording” thread is NOT about Prop 13. It is about Props 60 and 90 and some of the bolded gibberish you posted over there (copy above) is false and/or misleading and omits important information for the reader. Again, it is clear that you did not do any research before posting. I’m replying to it here (on this now decimated thread) cuz I don’t want to further hijack ldub818’s thread.
Your parents would have to have had a lower purchase price on the home they bought within two years of selling their home they purchased in 1980 (purchase price of new home lower than sold price of orig home).
8. What does “equal or lesser value” of a replacement property mean?
The market value of the replacement property as of the date of purchase must be equal or less than the market value of the original property on the date of sale. The meaning of “equal or lesser value” depends on when you purchase the replacement property. In general, equal or lesser value means:
100% or less of the market value of the original property if a replacement property were purchased or newly constructed before the sale of the original property, or
105% or less of the market value of the original property if a replacement property were purchased or newly constructed within the first year after the sale of the original property, or
110% or less of the market value of the original property if a replacement property were purchased or newly constructed within the second year after the sale of the original property.In determining whether the “equal or lesser value” test is met, it is important to understand that the market value of a property is not necessarily the same as the sale or purchase price. The assessor will determine the market value of each property. If the market value of your replacement dwelling exceeds the “equal or lesser value” test, no relief is available.
http://www.boe.ca.gov/proptaxes/faqs/propositions60_90.htm#8
A homeowner or group of homeowners … (HWJT or everyone named on the original deed) can only avail themselves of Prop 60/90 once in a lifetime If a married couple (HWJT on deed) takes advantage of Props 60/90 and one of them dies while they reside in the newer purchase, then the survivor cannot take advantage of Prop 60/90 ever again. Only ONE of the owners on title has to be 55 years old to take advantage of the base-assessment transfer but doing so prohibits any of the other owner(s) on the deed (whatever their age) from ever taking advantage of Prop 60/90 again. The new (lesser valuable) home would have had to have been purchased in the same county as the old home (Prop 60) OR purchased in one of ten CA counties which qualify for Prop 90 base assessment transfers:
What is the difference between Proposition 60 and Proposition 90?
1. Proposition 60 allows transfers of base year values within the same county (intracounty). Proposition 90 allows transfers from one county to another county in California (intercounty) and it is the discretion of each county to authorize such transfers.
Currently, the following ten counties in California have an ordinance enabling the intercounty base year value transfer:
Alameda
Los Angeles
Riverside
San Diego
Santa Clara
El Dorado *
Orange
San Bernardino
San Mateo
VenturaSince the counties indicated above are subject to change, we recommend contacting the county to which you wish to move to verify eligibility.
* Please note that El Dorado County’s ordinance is scheduled to sunset on October 1, 2016, unless the El Dorado County Board of Supervisors takes further action.
http://www.boe.ca.gov/proptaxes/faqs/propositions60_90.htm#1
One cannot use an investment property (which has NOT had a $7K homeowner’s exemption attached to it in the past two years) for a Prop 60/90 transfer of its base value assessment.
Do I need to be receiving the homeowners’ exemption on my original property when it is sold?
17. No. The original property must be eligible for the homeowners’ exemption because you own it and because it was your principal place of residence, either
1) at the time of its sale or
2) within two years of the purchase or new construction of the replacement dwelling.
If you did not have the homeowners’ exemption on your property, you may need to provide documents to the assessor that prove it was your principal place of residence. Proof of residency may include voter or vehicle registration, bank accounts, or income tax records.http://www.boe.ca.gov/proptaxes/faqs/propositions60_90.htm#17
In addition, one can’t deed their longtime residence to their kids or a spouse/soon-to-be former spouse (in settlement) thru any kind of an intrafamily or interspousal transfer deed (so the grantee can avail themselves of the grantor(s) spouse or parent/grandparent’s base assessment) and then turn around and use that “transfer” (NOT “arm’s-length sale”) for making application for a Prop 60/90 base assessment transfer for their retirement home.
2. I am over 55 and planning on selling my long-time residence to my child. Can my child benefit from the parent-child exclusion and can I also transfer my base year value (Proposition 60) when I purchase a replacement property?
No. You must choose which exclusion you wish to apply your base year value. If you sell the property to your child and choose to transfer your base year value using the parent-child exclusion, then the base year value is no longer yours to transfer to a replacement property.
(emphasis mine)
http://www.boe.ca.gov/proptaxes/faqs/propositions58.htm#26
For all FAQ’s on exclusions to reappraisal (Props 60/90), see:
http://www.boe.ca.gov/proptaxes/faqs/propositions60_90.htm
For all FAQ’s on exclusions to reappraisal (Props 58/193), see:
http://www.boe.ca.gov/proptaxes/faqs/propositions58.htm#header
For all FAQ’s on change of ownership, see:
https://www.boe.ca.gov/proptaxes/faqs/changeinownership.htm#header
Here’s a more recent letter from the CA BOE clarifying the law on base-assessment transfers:
http://www.boe.ca.gov/proptaxes/pdf/lta08018.pdf
In short, Props 60 and 90 weren’t written and passed to enable a CA homeowner who is still residing in their longtime principal residence to step up their lifestyle in retirement, but was instead intended to allow the homeowner to downsize to a less-valuable home and keep their old assessment. The devil is in the details, folks. If it wasn’t, every . single . longtime . CA . homeowner (or partial homeowner) would be attempting to use the measures to justify property tax relief on just about every property in existence as well as attempt to have their cake and eat it, too (ex: “sell” their residence for pennies on the dollar to a relative and then transfer its base-year assessment to another residence) :=0[/quote]
BG, WTF are you responding to? I swear, do you have dementia or something?
I’m not going to spend my time reading this long ass post you just made. If you have a cliff notes version, please post that version instead. Cliff notes are great. I got through AP english reading cliff notes for novels that I didn’t want to waste my time over so I could spend more time on the subjects I liked. And cliff notes has been my guideline at work when someone wants to write me a long ass 3 page email detailing me about a problem which can be summarized with 5 bullet points on a status report to my VP.
I’m not sure why you are talking about Prop 13 on this thread, because this thread is about mortgage brokers/lenders and recommendations, with the first order of hijack about expertise in mortgages.
I think you’re talking about Prop13 now. I’m not sure why (again I didn’t read that long ass paragraph). I’m not sure how this is relevant to the OP’s original request of asking for a mortgage broker’s referral..
Then, I thought you might be responding to my inquiry as to why you haven’t refinanced yet. And I only brought that up because apparently you jumped into this thread about mortgages, stating you aren’t very popular around here because you say things that are to the fact, even if it rubs people the wrong way… to which I corrected you..that absolutely not…people aren’t responding to your posts in the way they respond not because they don’t like you (well, at least until it because evident on that one thread about UC schools that you are a racist, and then it was only for that thread)….People respond to most of the rest of your threads about finance and real estate, because what you post is completely wrong and not factual at all.
And here we are with your long ass post about Prop13, which has nothing to do with either (a) a recommended mortgage broker/lender or (b) rebuttal as to why you haven’t to refinance your 30 year 3.66 ARM when 15 year and 10 year FIXED mortgages are much cheaper, or why you haven’t paid off your home if you say you can, despite in other threads you complaining about the low returns of 1%ish CD’s.
I mean, seriously, have you taken a look back and seen what you post, where you post it, and can’t you see how comically hysterical this is? I’m laughing my ass of here because I have no idea why you are talking about prop 13 in this context, and you must of spent considerable amount of time writing that previous dissertation on prop 13.
BG, though I’m definitely not “overstressed”, if had to choose between being overstressed of dementia, I’ll take overstressed for the win please.
May 22, 2016 at 4:57 PM #797865HLS
ParticipantBG,
I’m just going to touch on a couple of points that cause most people to be confused.The ONLY concerns about a loan should be the interest rate and the cost to get it.
(I don’t want to debate the difference between cost and no cost rates)
With a NO COST rate, who cares what the garbage fees are, they’re all covered.The confusion arises when one ONLY looks at their new payment. Starting over at 15 or 30 years IS A CHOICE, not an obligation.
Any RESPONSIBLE adult can adjust their monthly payments to pay their loan off in 2, 6.5, 12, 15.7, 18, 23, 25, 27.2 or 30 years AS THEY CHOOSE. There are no prepay penalties any more.The problem is that most loan advisers don’t understand this themselves so they cant explain it properly.
The ULTIMATE benefit to refinancing (at a fixed rate) is to continue making the same payment one is currently making but at a lower interest rate.
NOBODY has to start over at 15 or 30 years with the lowest payment; that’s just another OPTION to benefit from a refi but not the ultimate.Without a doubt, there is hundreds of billions of dollars being wasted by people who are paying too much in interest on their mortgages.
Saving just .25% can amount to tens of thousands of dollars in savings.
Saving 1.00% can amount to $200,000 savings.
Of course it depends on loan amount and if people can qualify to refi.Objections like hits to credit score, employment inquires and payments to out of area ‘lenders’ are quite frankly, ridiculous. Credit scores are meaningless & useless unless you need a mortgage or a car loan….
to be continued,,,May 22, 2016 at 5:03 PM #797866CoronitaParticipantLook, BG, if you somehow think we’re trying to compete as to “who can provide more information”, you know what, I don’t care. I’m not “trying” to win any prizes or brownie points here on this blog. Maybe you think I am, but trust me, I’ve got better things to do.
A lot of the stuff I post, is because these are things that I have wondered about because it was relevant to what I needed at my time or what I’m curious about. And it was a pain in the ass to find out because either (1) no one ran into the same issues or (2) those that didn’t didn’t give a shit about trying to help other people out by saving time for them.
When I post something, I always add a disclaimer *your mileage may vary*. *this is my understanding of it, do your own due diligence*.
If you somehow feel compelled that you have to post so that others think you’re more knowledgeable, or experience, or whatever, well that’s your agenda and your prerogative. That’s certainly not mine.
Bottomline is, I don’t get paid for this shit, and that’s really the only time that I would care if I was in competition with someone else for something. And then, in that case, I definitely would make sure you wouldn’t win.
May 22, 2016 at 5:19 PM #797867ParticipantI know that you’re intelligent along with many others, but cannot understand why you (and others) don’t see what FLU an AN have done… WAS BRILLIANT.
They have pocketed money tax free every time they refi’d to a lower rate. They had the OPTION of starting over OR the OPTION of staying on track for the same payoff.
FLU was genius in refinancing and pocketing money and then paying off his loan. It’s not illegal and it’s not immoral.
Had he known that’s what he was going to do, he would have been better off taking a rate that was .375-.50% above market on his last ref and pocket a pile of cash.
The credit is cash and it’s up front. The lender hopes to make it back over time but I guarantee you they didnt. FLU & AN are MUCH further ahead than 99.5% of others who don’t get it and don’t want to take the time to get it.
Your attempt to discredit what FLU did is completely off.As far as making payments to far off lenders, most borrowers do not make payments to lenders, payments are made to SERVICERS and every loan doc package these days includes a disclosure that states Loan servicing can be transferred at any time to any place; Borrower cannot object.
The guaranteed compounding of interest rate savings on a mortgage is a huge secret that most people don’t get INCLUDING LOAN & FINANCIAL PROFESSIONALS.
It’s akin to doubling a penny every day for a month and not realizing what the end result is. It’s HUGE.The numbers don’t lie. I’ve explained mortgage refinancing analysis to CPA’s, CEO’s CFO’s and other financial ‘experts’ who never really understood what the real benefits were until I showed them.
Plenty of people run around with grocery store coupons to save 25c but wont take the time to understand that they could save $10,000- $100,000 (or more) at NO COST
May 22, 2016 at 5:43 PM #797868ParticipantI can rant on as long as anyone BUT can also provide info that can make/save people money AT NO COST. Guaranteed. PERIOD.
It’s not economic theory OR projections OR NPV gibberish. It’s reality.As far as credit cards go, I get $500-$750 every time I open a credit card account, with an 800+ credit score
I’ve probably had over 100 credit cards and have been on lots of flights, cruises and hotel nights FOR FREE.
Use of credit cards responsibly is a goldmine for responsible adults. (and can RAISE a credit score)I’d be embarrassed to say that I only had 4 credit cards.
I think I have 18 right now and just got a Delta Amex card last week, that comes with enough bonus miles for a FREE round trip nonstop LA-Belize or other Caribbean locations. (There’s $57 tax to be paid to Belize)
and get to check 1st bag free.I’ve paid mortgages off with 1-2% loans from credit card companies. I deal with facts, not theories.
Certainties, not projections.Just because 99.5% of people don’t ‘get’ certain things, it doesn’t mean they’re wrong.
There are plenty of loopholes and ways to benefit when people are willing to listen instead of argue about things that they really don’t understand.May 22, 2016 at 5:44 PM #797869Participant[quote=HLS]I know that you’re intelligent along with many others, but cannot understand why you (and others) don’t see what FLU an AN have done… WAS BRILLIANT.
They have pocketed money tax free every time they refi’d to a lower rate. They had the OPTION of starting over OR the OPTION of staying on track for the same payoff.
FLU was genius in refinancing and pocketing money and then paying off his loan. It’s not illegal and it’s not immoral.
Had he known that’s what he was going to do, he would have been better off taking a rate that was .375-.50% above market on his last ref and pocket a pile of cash.
The credit is cash and it’s up front. The lender hopes to make it back over time but I guarantee you they didnt. FLU & AN are MUCH further ahead than 99.5% of others who don’t get it and don’t want to take the time to get it.
Your attempt to discredit what FLU did is completely off.As far as making payments to far off lenders, most borrowers do not make payments to lenders, payments are made to SERVICERS and every loan doc package these days includes a disclosure that states Loan servicing can be transferred at any time to any place; Borrower cannot object.
The guaranteed compounding of interest rate savings on a mortgage is a huge secret that most people don’t get INCLUDING LOAN & FINANCIAL PROFESSIONALS.
It’s akin to doubling a penny every day for a month and not realizing what the end result is. It’s HUGE.The numbers don’t lie. I’ve explained mortgage refinancing analysis to CPA’s, CEO’s CFO’s and other financial ‘experts’ who never really understood what the real benefits were until I showed them.
Plenty of people run around with grocery store coupons to save 25c but wont take the time to understand that they could save $10,000- $100,000 (or more) at NO COST[/quote]HLS, are you certain that these two posters obtained completely no-cost refinancing each and every time they refinanced (cash out?), HELOC’d or took out a 2nd TD??
May 22, 2016 at 5:50 PM #797870Participant[quote=HLS]I can rant on as long as anyone BUT can also provide info that can make/save people money AT NO COST. Guaranteed. PERIOD.
It’s not economic theory OR projections OR NPV gibberish. It’s reality.As far as credit cards go, I get $500-$750 every time I open a credit card account, with an 800+ credit score
I’ve probably had over 100 credit cards and have been on lots of flights, cruises and hotel nights FOR FREE.
Use of credit cards responsibly is a goldmine for responsible adults. (and can RAISE a credit score)I’d be embarrassed to say that I only had 4 credit cards.
I think I have 18 right now and just got a Delta Amex card last week, that comes with enough bonus miles for a FREE round trip nonstop LA-Belize or other Caribbean locations. (There’s $57 tax to be paid to Belize)
and get to check 1st bag free.I’ve paid mortgages off with 1-2% loans from credit card companies. I deal with facts, not theories.
Certainties, not projections.Just because 99.5% of people don’t ‘get’ certain things, it doesn’t mean they’re wrong.
There are plenty of loopholes and ways to benefit when people are willing to listen instead of argue about things that they really don’t understand.[/quote]I could have had 18 credit cards, HLS, as well as twice the credit limit I started out with on all of them.But I don’t want or need that many bills to keep track of every month. And I don’t “need” the credit.
I think the cards with bonus airline miles are great and have been encouraging my kids to apply for them. Unfortunately I myself have vertigo and don’t fly (or ride on ships) very well. And I have never been able to go on most amusement rides. I need to stay on the ground and drive my car.
I believed you when you said you could offer no-cost financing back in an earlier thread a couple of weeks ago. I believe it was truly at “no cost.”
May 22, 2016 at 5:51 PM #797871ParticipantWhat’s crystal clear here, flu is that you did not read my most recent post. If you had, you would have known that my short discussion of the PROGENY of Prop 13, in response to YOUR post was just a couple of paragraphs of it. Instead, you are back to taking 6++ paragraphs to insult me instead of reading, learning and realizing that what I have to contribute here is valuable and actually relevant to the topic of this thread and in response to your (partly gibberish) as well as false and misleading post.
In short, your post was ignorant and you’ve been posting by the seat of your pants lately with mostly gibberish, thinking that the more you insult me here, the more you’re going to be able to somehow destroy my credibility.
The truth is, you’ve spent years here creating threads about your various refi, HELOC and/or cash-out adventures on your primary residence. Even though thru reading all your “refi threads” over the years, ad nauseam, my first thought was, “Jeebus, another refi? Why, flu? Is it really `worth it'” …. I said nothing. I never tried to insult you on how foolish I thought you were or anything of the kind. You have now taken it upon yourself in recent days to rail on me for not refi-ing my residence and it’s really none of your business.
You’ve been using both of these threads to claim that a retiree should have “fixed” expenses in your opinion and that the same recipe applies to everyone, even though you have been told otherwise by another poster (an “expert” in mortgage lending, I might add), who has also stated here that they feel it is “inappropriate” for one poster to advise another poster on financial issues who is in different life stage than they are.
In short, instead of contributing to the board, you recent posts to me of late don’t address anything I posted and are instead insulting, bullying, boorish, self-serving and contribute absolutely nothing to the forum.
flu, you’re so ignorant about some issues (in this case, CA property tax laws) that you can’t even acknowledge when another poster points out (with proof) that you’ve posted something which is false and/or misleading. That’s sad.
May 22, 2016 at 6:15 PM #797872Participant[quote=HLS]BG,
I’m just going to touch on a couple of points that cause most people to be confused.The ONLY concerns about a loan should be the interest rate and the cost to get it.
(I don’t want to debate the difference between cost and no cost rates)
With a NO COST rate, who cares what the garbage fees are, they’re all covered.The confusion arises when one ONLY looks at their new payment. Starting over at 15 or 30 years IS A CHOICE, not an obligation.
Any RESPONSIBLE adult can adjust their monthly payments to pay their loan off in 2, 6.5, 12, 15.7, 18, 23, 25, 27.2 or 30 years AS THEY CHOOSE. There are no prepay penalties any more.The problem is that most loan advisers don’t understand this themselves so they cant explain it properly.
The ULTIMATE benefit to refinancing (at a fixed rate) is to continue making the same payment one is currently making but at a lower interest rate.
NOBODY has to start over at 15 or 30 years with the lowest payment; that’s just another OPTION to benefit from a refi but not the ultimate.Without a doubt, there is hundreds of billions of dollars being wasted by people who are paying too much in interest on their mortgages.
Saving just .25% can amount to tens of thousands of dollars in savings.
Saving 1.00% can amount to $200,000 savings.
Of course it depends on loan amount and if people can qualify to refi.Objections like hits to credit score, employment inquires and payments to out of area ‘lenders’ are quite frankly, ridiculous. Credit scores are meaningless & useless unless you need a mortgage or a car loan….
to be continued,,,[/quote]HLS, I have always been aware that a refi-borrower had a choice as to how many years they wanted their new loan for. I am aware that that all the fixed rate mortgages fully amortize for the amount of years they are taken out for.I just wonder why someone would repeatedly refi just to shave .125% or .25% off their current interest rate (especially if they didn’t need to take any cash out) and then shortly thereafter retire the loan! I mean, what’s the point? How much did they really save on their mortgage over their entire period of ownership . . . especially if their mortgage was continually or even on some occasions reset back to 30 or 15 years upon successful refi?
I agree about credit scores being “meaningless” unless one needs to borrow. At the present, mine won’t even qualify me for a cup of black coffee :=0
But that’s okay …. for me … in the present time.
May 22, 2016 at 7:43 PM #797873ParticipantI know that AN is definitely on top of the game and pretty sure that FLU is too.
We’re not talking abut HELOC’S & 2nds,,,
We’re talking about refi of 1st mortgages at a rate that comes with absolutely NO COST to the borrower and in many cases includes additional CASH credit to the borrower.Who knew 10 years ago that there would be the opportunity to refi 5 to 10 times if somebody wanted to, each time at no cost AND many times pocketing extra cash.
I usually recommend saving at least .25% on at least $200K but it still makes sense for less. The larger the spread, the lower the loan amount can be.The cash would have been a losing decision after 5-7 years but because they refi’d within a shorter window, they kept the upfront cash and did it again, and again, and again.
I’m pretty sure FLU cashed out well, before he rang the register.AN posted recently about having enough credit to pay most/all of his property taxes for several years.
**This opportunity will probably never happen again in our lifetimes**
These guys rode the wave…Had they been surfing in Hawaii it would have been an amazing ride.As far as ‘gambling’ with an ARM, I would never recommend that for anyone planning to hold property long term regardless of the index and/or margin.
It worked for BG, but in the grand scheme she got lucky. AN & FLU benefited each and every time with Fixed rates, all the way down, never risking exposure to a huge swing to the upside.
For most borrowers I always recommend fixed. 10-15-20-30 whatever. The shorter the term, the lower the rate.
I guarantee you that anybody who got a 30yr fixed loan- 15 years ago doesn’t have a 3.00% rate. Refinancing today for 15yrs keeps them on the same track at a much lower payment.
If they keep making the same payment they can possibly shave 5 years and be done in 10 years.
(depending on their current balance, it may be difficult to get no cost)I do not suggest gambling with the biggest financial decision of their lives. AN & FLU never gambled.
If anybody is so sure which way rates are headed,up or down, learn how to trade on Wall Street. You can make so much money that you can pay cash for a house, why bother with a mortgage.
Symbol TBT (-2x 20YR Treasury) has been a wonderful short the last 5 years, having gone from $134 down to $36. Many people think it can’t go much lower, I have no opinion.The reality is that most people have no business having money in the stock market controlled and manipulated by various forces and forced to ONLY have long positions.
Most people have no idea how or why to short a stock
or what puts & calls & LEAPS are yet they have substantial amounts of money ‘invested’ in something they really know very little about, and just hope and pray that it goes up. (To me, HOPE is not a strategy)Managed by 401K plan admin who make money every second of every day managing funds whether the investor ever makes a penny or not.
If investors cant identify stocks that are overpriced and should be shorted they probably shouldn’t be comfortable trying to identify stocks that are cheap.
ALL credit card plans allow transfer of free flights, cruises & hotel nights to friends or family members.
IMO there’s no reason why anyone with good credit shouldn’t be taking advantage of these teaser offers.May 22, 2016 at 8:07 PM #797875Participant[quote=bearishgurl]
I just wonder why someone would repeatedly refi just to shave .125% or .25% off their current interest rate (especially if they didn’t need to take any cash out) and then shortly thereafter retire the loan! I mean, what’s the point? How much did they really save on their mortgage over their entire period of ownership . . . especially if their mortgage was continually or even on some occasions reset back to 30 or 15 years upon successful refi?[/quote]
It’s actually a BRILLIANT strategy to refi about 6 months before paying off a loan with a high balance….
6 months is a reasonable amount of time to say my life changed, I’ve decided to pay off my loan. (Nobody is going to ask)Credits are always a % of the loan amount, there are more dollars available (and easier to get no cost) with a higher balance.
On a $200K loan, you could get anywhere from $1000 to $4000 and a 400K loan double that.
Pay $40 a month more for 6 months, get a few thousand dollars! That’s the point…. Very few people do it OR even understand they can do it.
Does that make it a loophole?.I’m not clear on why you keep bringing up reset of a mortgage when you stated that you know payments
can be adjusted. Reset is only one option of a refi.
Those who understand adjust their payments accordingly.the MINUMIUM payment ALWAYS resets a loan. Adjusting payments will change the term.
May 22, 2016 at 10:09 PM #797881Participant[quote=HLS]I know that AN is definitely on top of the game and pretty sure that FLU is too.
We’re not talking abut HELOC’S & 2nds,,,
We’re talking about refi of 1st mortgages at a rate that comes with absolutely NO COST to the borrower and in many cases includes additional CASH credit to the borrower.Who knew 10 years ago that there would be the opportunity to refi 5 to 10 times if somebody wanted to, each time at no cost AND many times pocketing extra cash.
I usually recommend saving at least .25% on at least $200K but it still makes sense for less. The larger the spread, the lower the loan amount can be.The cash would have been a losing decision after 5-7 years but because they refi’d within a shorter window, they kept the upfront cash and did it again, and again, and again.
I’m pretty sure FLU cashed out well, before he rang the register.AN posted recently about having enough credit to pay most/all of his property taxes for several years.
**This opportunity will probably never happen again in our lifetimes**
These guys rode the wave…Had they been surfing in Hawaii it would have been an amazing ride.As far as ‘gambling’ with an ARM, I would never recommend that for anyone planning to hold property long term regardless of the index and/or margin.
It worked for BG, but in the grand scheme she got lucky. AN & FLU benefited each and every time with Fixed rates, all the way down, never risking exposure to a huge swing to the upside.
For most borrowers I always recommend fixed. 10-15-20-30 whatever. The shorter the term, the lower the rate.
I guarantee you that anybody who got a 30yr fixed loan- 15 years ago doesn’t have a 3.00% rate. Refinancing today for 15yrs keeps them on the same track at a much lower payment.
If they keep making the same payment they can possibly shave 5 years and be done in 10 years.
(depending on their current balance, it may be difficult to get no cost)I do not suggest gambling with the biggest financial decision of their lives. AN & FLU never gambled.
If anybody is so sure which way rates are headed,up or down, learn how to trade on Wall Street. You can make so much money that you can pay cash for a house, why bother with a mortgage.
Symbol TBT (-2x 20YR Treasury) has been a wonderful short the last 5 years, having gone from $134 down to $36. Many people think it can’t go much lower, I have no opinion.The reality is that most people have no business having money in the stock market controlled and manipulated by various forces and forced to ONLY have long positions.
Most people have no idea how or why to short a stock
or what puts & calls & LEAPS are yet they have substantial amounts of money ‘invested’ in something they really know very little about, and just hope and pray that it goes up. (To me, HOPE is not a strategy)Managed by 401K plan admin who make money every second of every day managing funds whether the investor ever makes a penny or not.
If investors cant identify stocks that are overpriced and should be shorted they probably shouldn’t be comfortable trying to identify stocks that are cheap.
ALL credit card plans allow transfer of free flights, cruises & hotel nights to friends or family members.
IMO there’s no reason why anyone with good credit shouldn’t be taking advantage of these teaser offers.[/quote]Good post, HLS. Except you didn’t mention that COFI follows the mortgage interest rate closely (and even lags it up to a month or two). Hence, when rates went down … and down … and down again, so did the COFI index, negating the need to refi. While fixed mortgage rates have been jostling around at the bottom (last 5+ years) the COFI index has moved very little up and down (no more than the spread of fixed mortgage interest rates for prime borrowers). If one took out a COFI ARM ~15 years ago (a true “option ARM” which doesn’t exist today under the former terms), they would have an interest rate today in the 3% range. They would be paying ~3.6% with a 2.5% margin and ~3.85% with a 2.75% margin. In previous years, the COFI index has been as low as .931% (in Sept 14).http://www.freddiemac.com/finance/cofi.html
Those (now few) borrowers still left on the COFI train have been able to take advantage of current low rates without lifting a finger!
Yes, I DID get enticed into applying for an AMEX Gold card in 2009 (so I could get two free RT air vouchers shortly after sign on and my $150 membership waived for the first year). Yes, I DID book the flights for my kids to join me in the middle of one of my road trips. In 2014 (I think) after paying 4 years of $150 annual fees and not earning enough points to do much of anything with (and they were only worth .70/$1 on Amazon) and having already paid $600 in annual fees (which almost covered those two “free” RT plane tix I rec’d), I decided to close the account and apply for the Amex Preferred Blue Cash and I am VERY happy with it! I get 6% cash back in all standalone grocery stores and 3% cash back at all standalone gas stations. Now THAT is my kind of card! It also offers other monthly discounts for using the card at major retailers and big-box stores (usually $10 off $50). All the “cash-back” applies to future statement credit so I don’t waste a penny of my rewards.
I’ve also belonged to the Best Western for several years and just booked two more free rooms for my summer road trip!
If you book with a hotel chain directly with which you are a member, you can obtain great discounts without paying in full for the (non-refundable) reservation up front and also get other perks and earn free nights pretty easily. It doesn’t matter which credit card you use to book your reservation.
You posted that the opportunity for “no-cost” (to the borrower) mortgage loans may never happen again, HLS. When did they start to “come into vogue” and when do you think they will become unavailable?
May 22, 2016 at 10:38 PM #797884an
Participant[quote=HLS]**This opportunity will probably never happen again in our lifetimes**
These guys rode the wave…Had they been surfing in Hawaii it would have been an amazing ride.[/quote]Never say never. I’m wrapping up another refi. This time, rate dropped by 1/8% and I got about $4200 in credit to pay 3rd party fees, taxes, and insurance. It came out that would need to bring ~$600 to closing and have my property tax and insurance and 1st month mortgage paid for by escrow without changing my principle amount. I’m already eye the next 1/8% drop. Right now, I’m seeing 3.375% with ~$1k in credit. I’ll probably pull the trigger if the credit increase to ~$4k.
[quote=HLS]I do not suggest gambling with the biggest financial decision of their lives. AN & FLU never gambled.[/quote]I totally agree. I stated before that for my first mortgage, I thought I would time the market (rate), and bought points to get a lower interested. I gambled and failed. I had to think long and hard with the 1st refi when rate dropped to 4.125%, since I paid almost $10k in points to get a 4.5% rate when 0 point loan were at 5%. I decided that I gambled and failed and chalk that loss up as sunk cost. So I refi to 4.125% with enought credit to pay for my taxes and insurance, only to refi 6 months later, and 6 months after that, and 6 months after that, and 6 months after that.Today, I’m back to a 30 years mortgage. But I think that’s OK. As long as it’s fixed, I’m OK with it. There’s no upside risk for me. I view it as nothing more than a predictable cost of living for the next 30 years. Thanks to inflation, my mortgage now is less than a 2/2 apartment. At this rate, in probably 5 years, it would be less than a 1/1 apartment. Which make me feel just perfectly fine to keep on refinancing until rate hit rock bottom. Every time, resetting it back to 30 years.
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