Tales of a refinance, part 2….

[EconProf]

Flu, you should get a 30-year loan, not 15. Who cares what the interest cost difference is? If inflation and prevailing interest rates in 5 or 10 years are in or near double-digits and you are sitting pretty in a 4% or so loan, you will make so much more money.

[Coronita]

[quote=EconProf]Flu, you should get a 30-year loan, not 15. Who cares what the interest cost difference is? If inflation and prevailing interest rates in 5 or 10 years are in or near double-digits and you are sitting pretty in a 4% or so loan, you will make so much more money.[/quote]

I thought about this… a 15 year is contrary to what I believe in that the dollar continuing to tank. A 30 year loan at 3.75% would be about $1898/month. This would be a much more managable expense up front. It leaves the door open for me renting this out if I end up needing to, since I think I could possibly break even after taxes/expenses.

The other thought is I just want to get done with this thing in 15 years, so I can retire or pseudo-retire earlier. It’s possible economy isn’t going to be doing as well moving forward. I’m getting older, and slowing down, etc, I’m probably at the height of my earning potential right now, and it will probably go into steady decline over the next decade.. If our dollar weakens by 10%, I doubt for instance, we’ll be see wages increase by 10% nor do I think Google/Android is going to be the hottest thing 10 years from now, and at that point do I really want to compete with some twenty year olds in going after projects on the side? I don’t know how well passive investments will be doing. 15 years is roughly where big bang happens for me. Kids about ready to go to college (I hope… and I hope I don’t have to pay anymore than what’s going to be available in her 529 account) , life insurance policies coverage my mortgage terminate (and no way I can renew or get another one with my pre-existing condition)….
Medical expenses are going to go up, especially if

In about 15 years, my highest expense will probably be my medical insurance, as a I have a preexisting condition. So unless I am employed by a company with a great group coverage, I’ll be paying a lot for this (with our without obamacare)

During my parent’s generation, the standard norm was 15 year mortgages, and THAT seemed long… I think we evolved to a point of 30 year mortgages being the norm, and moving forward it will probably be 40 or 50 year mortgages…

Ah,,, screw it.. Too much to think…Too much phd analysis to paralysis, and I don’t even have one.
I guess I could just join the remaining 90% of the population that expects the government to take care of them 🙂

I’m probably overthinking about this way too late. Afterall, if there’s anything to be proven is that in the U.S., it’s paying off your bills early is clearly the wrong thing to do…because if you wait long enough, chances are someone else will take care of it for you 🙂

[Coronita]

[quote=EconProf]Flu, you should get a 30-year loan, not 15. Who cares what the interest cost difference is? If inflation and prevailing interest rates in 5 or 10 years are in or near double-digits and you are sitting pretty in a 4% or so loan, you will make so much more money.[/quote]

I thought about this… a 15 year is contrary to what I believe in that the dollar continuing to tank. A 30 year loan at 3.75% would be about $1898/month. This would be a much more managable expense up front. It leaves the door open for me renting this out if I end up needing to, since I think I could possibly break even after taxes/expenses.

The other thought is I just want to get done with this thing in 15 years, so I can retire or pseudo-retire earlier. It’s possible economy isn’t going to be doing as well moving forward. I’m getting older, and slowing down, etc, I’m probably at the height of my earning potential right now, and it will probably go into steady decline over the next decade.. If our dollar weakens by 10%, I doubt for instance, we’ll be see wages increase by 10% nor do I think Google/Android is going to be the hottest thing 10 years from now, and at that point do I really want to compete with some twenty year olds in going after projects on the side? I don’t know how well passive investments will be doing. 15 years is roughly where big bang happens for me. Kids about ready to go to college (I hope… and I hope I don’t have to pay anymore than what’s going to be available in her 529 account) , life insurance policies coverage my mortgage terminate (and no way I can renew or get another one with my pre-existing condition)….
Medical expenses are going to go up, especially if

In about 15 years, my highest expense will probably be my medical insurance, as a I have a preexisting condition. So unless I am employed by a company with a great group coverage, I’ll be paying a lot for this (with our without obamacare)

During my parent’s generation, the standard norm was 15 year mortgages, and THAT seemed long… I think we evolved to a point of 30 year mortgages being the norm, and moving forward it will probably be 40 or 50 year mortgages…

Ah,,, screw it.. Too much to think…Too much phd analysis to paralysis, and I don’t even have one.
I guess I could just join the remaining 90% of the population that expects the government to take care of them 🙂

I’m probably overthinking about this way too late. Afterall, if there’s anything to be proven is that in the U.S., it’s paying off your bills early is clearly the wrong thing to do…because if you wait long enough, chances are someone else will take care of it for you 🙂

[Coronita]

[quote=EconProf]Flu, you should get a 30-year loan, not 15. Who cares what the interest cost difference is? If inflation and prevailing interest rates in 5 or 10 years are in or near double-digits and you are sitting pretty in a 4% or so loan, you will make so much more money.[/quote]

I thought about this… a 15 year is contrary to what I believe in that the dollar continuing to tank. A 30 year loan at 3.75% would be about $1898/month. This would be a much more managable expense up front. It leaves the door open for me renting this out if I end up needing to, since I think I could possibly break even after taxes/expenses.

The other thought is I just want to get done with this thing in 15 years, so I can retire or pseudo-retire earlier. It’s possible economy isn’t going to be doing as well moving forward. I’m getting older, and slowing down, etc, I’m probably at the height of my earning potential right now, and it will probably go into steady decline over the next decade.. If our dollar weakens by 10%, I doubt for instance, we’ll be see wages increase by 10% nor do I think Google/Android is going to be the hottest thing 10 years from now, and at that point do I really want to compete with some twenty year olds in going after projects on the side? I don’t know how well passive investments will be doing. 15 years is roughly where big bang happens for me. Kids about ready to go to college (I hope… and I hope I don’t have to pay anymore than what’s going to be available in her 529 account) , life insurance policies coverage my mortgage terminate (and no way I can renew or get another one with my pre-existing condition)….
Medical expenses are going to go up, especially if

In about 15 years, my highest expense will probably be my medical insurance, as a I have a preexisting condition. So unless I am employed by a company with a great group coverage, I’ll be paying a lot for this (with our without obamacare)

During my parent’s generation, the standard norm was 15 year mortgages, and THAT seemed long… I think we evolved to a point of 30 year mortgages being the norm, and moving forward it will probably be 40 or 50 year mortgages…

Ah,,, screw it.. Too much to think…Too much phd analysis to paralysis, and I don’t even have one.
I guess I could just join the remaining 90% of the population that expects the government to take care of them 🙂

I’m probably overthinking about this way too late. Afterall, if there’s anything to be proven is that in the U.S., it’s paying off your bills early is clearly the wrong thing to do…because if you wait long enough, chances are someone else will take care of it for you 🙂

[Coronita]

[quote=EconProf]Flu, you should get a 30-year loan, not 15. Who cares what the interest cost difference is? If inflation and prevailing interest rates in 5 or 10 years are in or near double-digits and you are sitting pretty in a 4% or so loan, you will make so much more money.[/quote]

I thought about this… a 15 year is contrary to what I believe in that the dollar continuing to tank. A 30 year loan at 3.75% would be about $1898/month. This would be a much more managable expense up front. It leaves the door open for me renting this out if I end up needing to, since I think I could possibly break even after taxes/expenses.

The other thought is I just want to get done with this thing in 15 years, so I can retire or pseudo-retire earlier. It’s possible economy isn’t going to be doing as well moving forward. I’m getting older, and slowing down, etc, I’m probably at the height of my earning potential right now, and it will probably go into steady decline over the next decade.. If our dollar weakens by 10%, I doubt for instance, we’ll be see wages increase by 10% nor do I think Google/Android is going to be the hottest thing 10 years from now, and at that point do I really want to compete with some twenty year olds in going after projects on the side? I don’t know how well passive investments will be doing. 15 years is roughly where big bang happens for me. Kids about ready to go to college (I hope… and I hope I don’t have to pay anymore than what’s going to be available in her 529 account) , life insurance policies coverage my mortgage terminate (and no way I can renew or get another one with my pre-existing condition)….
Medical expenses are going to go up, especially if

In about 15 years, my highest expense will probably be my medical insurance, as a I have a preexisting condition. So unless I am employed by a company with a great group coverage, I’ll be paying a lot for this (with our without obamacare)

During my parent’s generation, the standard norm was 15 year mortgages, and THAT seemed long… I think we evolved to a point of 30 year mortgages being the norm, and moving forward it will probably be 40 or 50 year mortgages…

Ah,,, screw it.. Too much to think…Too much phd analysis to paralysis, and I don’t even have one.
I guess I could just join the remaining 90% of the population that expects the government to take care of them 🙂

I’m probably overthinking about this way too late. Afterall, if there’s anything to be proven is that in the U.S., it’s paying off your bills early is clearly the wrong thing to do…because if you wait long enough, chances are someone else will take care of it for you 🙂

[Coronita]

[quote=EconProf]Flu, you should get a 30-year loan, not 15. Who cares what the interest cost difference is? If inflation and prevailing interest rates in 5 or 10 years are in or near double-digits and you are sitting pretty in a 4% or so loan, you will make so much more money.[/quote]

I thought about this… a 15 year is contrary to what I believe in that the dollar continuing to tank. A 30 year loan at 3.75% would be about $1898/month. This would be a much more managable expense up front. It leaves the door open for me renting this out if I end up needing to, since I think I could possibly break even after taxes/expenses.

The other thought is I just want to get done with this thing in 15 years, so I can retire or pseudo-retire earlier. It’s possible economy isn’t going to be doing as well moving forward. I’m getting older, and slowing down, etc, I’m probably at the height of my earning potential right now, and it will probably go into steady decline over the next decade.. If our dollar weakens by 10%, I doubt for instance, we’ll be see wages increase by 10% nor do I think Google/Android is going to be the hottest thing 10 years from now, and at that point do I really want to compete with some twenty year olds in going after projects on the side? I don’t know how well passive investments will be doing. 15 years is roughly where big bang happens for me. Kids about ready to go to college (I hope… and I hope I don’t have to pay anymore than what’s going to be available in her 529 account) , life insurance policies coverage my mortgage terminate (and no way I can renew or get another one with my pre-existing condition)….
Medical expenses are going to go up, especially if

In about 15 years, my highest expense will probably be my medical insurance, as a I have a preexisting condition. So unless I am employed by a company with a great group coverage, I’ll be paying a lot for this (with our without obamacare)

During my parent’s generation, the standard norm was 15 year mortgages, and THAT seemed long… I think we evolved to a point of 30 year mortgages being the norm, and moving forward it will probably be 40 or 50 year mortgages…

Ah,,, screw it.. Too much to think…Too much phd analysis to paralysis, and I don’t even have one.
I guess I could just join the remaining 90% of the population that expects the government to take care of them 🙂

I’m probably overthinking about this way too late. Afterall, if there’s anything to be proven is that in the U.S., it’s paying off your bills early is clearly the wrong thing to do…because if you wait long enough, chances are someone else will take care of it for you 🙂

[an]

Flu, I think you’re missing one variable in your calculation. The ~$1000 you’re saving each month. That $1000 will be 180k after 15 years. If you can average 1.5%return on that 180k, it’ll be 215k in 15 years. That’s enough to pay your mortgage for the following 10 years. If you don’t take all of it out at 15 years, it might stretch to 11 years. If you can average 3%, that 180k will grow to 280k. That’s enough to pay your mortgage the the next 13 years. Might be able to stretch to 14 years if you don’t take it all out in 15 years. So it seems like you can still retire in 15 years with a 30 years mortgage.

[an]

Flu, I think you’re missing one variable in your calculation. The ~$1000 you’re saving each month. That $1000 will be 180k after 15 years. If you can average 1.5%return on that 180k, it’ll be 215k in 15 years. That’s enough to pay your mortgage for the following 10 years. If you don’t take all of it out at 15 years, it might stretch to 11 years. If you can average 3%, that 180k will grow to 280k. That’s enough to pay your mortgage the the next 13 years. Might be able to stretch to 14 years if you don’t take it all out in 15 years. So it seems like you can still retire in 15 years with a 30 years mortgage.

[an]

Flu, I think you’re missing one variable in your calculation. The ~$1000 you’re saving each month. That $1000 will be 180k after 15 years. If you can average 1.5%return on that 180k, it’ll be 215k in 15 years. That’s enough to pay your mortgage for the following 10 years. If you don’t take all of it out at 15 years, it might stretch to 11 years. If you can average 3%, that 180k will grow to 280k. That’s enough to pay your mortgage the the next 13 years. Might be able to stretch to 14 years if you don’t take it all out in 15 years. So it seems like you can still retire in 15 years with a 30 years mortgage.

[an]

Flu, I think you’re missing one variable in your calculation. The ~$1000 you’re saving each month. That $1000 will be 180k after 15 years. If you can average 1.5%return on that 180k, it’ll be 215k in 15 years. That’s enough to pay your mortgage for the following 10 years. If you don’t take all of it out at 15 years, it might stretch to 11 years. If you can average 3%, that 180k will grow to 280k. That’s enough to pay your mortgage the the next 13 years. Might be able to stretch to 14 years if you don’t take it all out in 15 years. So it seems like you can still retire in 15 years with a 30 years mortgage.

[an]

Flu, I think you’re missing one variable in your calculation. The ~$1000 you’re saving each month. That $1000 will be 180k after 15 years. If you can average 1.5%return on that 180k, it’ll be 215k in 15 years. That’s enough to pay your mortgage for the following 10 years. If you don’t take all of it out at 15 years, it might stretch to 11 years. If you can average 3%, that 180k will grow to 280k. That’s enough to pay your mortgage the the next 13 years. Might be able to stretch to 14 years if you don’t take it all out in 15 years. So it seems like you can still retire in 15 years with a 30 years mortgage.

[Anonymous]

flu, there are many variables to this decision. regardless you will save some money. my focus would be on managing cash flow now and in the future. if my payment is lower than my previous one, either pocket it for some other expense (pay down that new car loan) or pay down your mortgage.

good luck

[Anonymous]

flu, there are many variables to this decision. regardless you will save some money. my focus would be on managing cash flow now and in the future. if my payment is lower than my previous one, either pocket it for some other expense (pay down that new car loan) or pay down your mortgage.

good luck

[Anonymous]

flu, there are many variables to this decision. regardless you will save some money. my focus would be on managing cash flow now and in the future. if my payment is lower than my previous one, either pocket it for some other expense (pay down that new car loan) or pay down your mortgage.

good luck

[Anonymous]

flu, there are many variables to this decision. regardless you will save some money. my focus would be on managing cash flow now and in the future. if my payment is lower than my previous one, either pocket it for some other expense (pay down that new car loan) or pay down your mortgage.

good luck

[Author]

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