Treasury yield 30 year

[spdrun]

Fortunately, the commensurate blah (or down) action in stocks should have a salutary effect on sentiment soon enough. As in, fewer people bleating to buy homes.

I’m all for more people buying gold — unless you’re making electronic circuitry, it’s not terribly useful not income producing, so it keeps the stupid money out of income-producing assets.

[an]

30 year rate has dropped like the 30 years treasury yield. It’s still still at ~3.625%. Anything think we’ll see a closing of the gap and see 30 years mortgage rate hitting 3%?

[spdrun]

Hopefully not. December pending home sales dropping is a good trend, and may it continue. Millennial twitter-twits should be renting, not buying.

[moneymaker]

2.2261% and dropping. So if I left the stock market at about the same level it is now at and got into bonds above 3% I should be making money when I exit and get back into stocks,right?

[moneymaker]

[quote=AN]30 year rate has dropped like the 30 years treasury yield. It’s still still at ~3.625%. Anything think we’ll see a closing of the gap and see 30 years mortgage rate hitting 3%?[/quote]
I’m thinking it could be lower for people with perfect credit scores of course points might also be necessary.

[an]

[quote=moneymaker][quote=AN]30 year rate has dropped like the 30 years treasury yield. It’s still still at ~3.625%. Anything think we’ll see a closing of the gap and see 30 years mortgage rate hitting 3%?[/quote]
I’m thinking it could be lower for people with perfect credit scores of course points might also be necessary.[/quote]That rate is with 0 point. Of course if you buy down rate, you can get it lower. But it’s quite expensive and would take way too long to break even. I would hope that it would get down to ~3%, since at the bottom last time, you were able to get ~3.25% with 0 point.

[Coronita]

[quote=moneymaker]Now at 2.25% Time to refi? flu? Anyone think it will get down to 2.00? On a separate but related note, will the gold buying be from the bond market or the stock market people?[/quote]

My 15 year is at 2.5% with 0 points 0 cost. So unless it’s something similar, I don’t think I’ll bite.
Besides, I’m following ucgal’s lead and adding in extra principal payments to try to pay this off earlier, hopefully without 4-5 years, so that by the time my kid goes to junior high, I this will be free and clear, without disturbing the rest of my investments.

[Anonymous]

The points on your current loan are a sunk cost.

Why would you pay off a 2.5% loan early?

[spdrun]

There’s something to be said for not having to deal with bankster scum on a monthly basis. Free money isn’t free if it comes with strings attached like risk of foreclosure, insurance requirements, and escrow requirements.

[Coronita]

[quote=harvey]The points on your current loan are a sunk cost.

Why would you pay off a 2.5% loan early?[/quote]

So I can buy a bigger house with a new loan and rent this one out, hopefully with a $4000/month cash flow by then. It’s getting pretty close.

[Anonymous]

[quote=spdrun]There’s something to be said for not having to deal with bankster scum on a monthly basis. Free money isn’t free if it comes with strings attached like risk of foreclosure, insurance requirements, and escrow requirements.[/quote]

These “strings” have no cost.

Unless the property is underwater, there is no risk of foreclosure. If it is underwater, who cares?

Insurance is something one needs regardless of a mortgage. A lender’s requirement does not change the insurance bill.

Who has escrow requirements? Even if you do, the cost is insignificant.

The automatic payment that goes out of my checking account every month is free and effortless.

“Bankster scum” is a demon you’ve created in your own mind.

I certainly have no issue with someone that only charges me 2.5% for capital I can invest. I’ll take as much as they’re willing to give me, and I’ll keep it as long as I can.

[spdrun]

Some loans have other requirements like owner occupancy that a person might want to get rid of.

Also, banks have been known to erroneously foreclose on homes with current payments. It took quite a bit of litigation and trouble to straighten those cases out. Best not to be involved with one at all if you don’t have to.

If you own a property worth say $800k that you can clear $4k per month from, have additional cash in the bank after you pay off the loan, and have no interest in buying more rental property, having the home paid off is a minimal-stress situation. Relax, kick back, collect the full $4k per month and enjoy. You can always get another loan against the property if you need cash in future.

[Anonymous]

[quote]have additional cash in the bank after you pay off the loan[/quote]

That’s an interesting accounting trick.

[spdrun]

If you owe $400k on a property, have $800k in the bank, you’ll still have cash left over when you pay off the loan. At least that’s what I meant.

Minimal-stress situation is free and clear on all properties with a healthy nest egg in the bank. You’re only beholden to the county tax authority and the tenants at this point, not the bank, loan servicer, etc.

[Anonymous]

I personally would stress less if I had $800K liquid and $400K debt vs. $400K liquid and zero debt, especially if the cost of that debt were very low and fixed rate.

Accounting net worth is the same – the relative value of the different scenarios are subjective.

Different people value liquidity and opportunity cost differently. In general I think the benefits of paying off a home loan are often overstated.

[Author]

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