Forum Replies Created
-
AuthorPosts
-
May 10, 2016 at 9:27 PM in reply to: The dire climate of CA public university admissions for freshmen #797442
an
Participant[quote=scaredyclassic]Even having lived frugally, you’re not gonna make it from 50 to 80 with no real job.
Not voting is voting.
Vermin supreme in 2016![/quote]Retirement age today is 67. So, if you retire at 50, then that mean you’re retiring early. Which probably mean you don’t need a real job.
Participant[quote=livinincali]We live in CA it really doesn’t matter that much. Maybe at the local level or if a republican held the 52nd district.[/quote]You’re right, it probably doesn’t matter that much. However, I just want to make sure, just in case a Republican somehow was able to give Peters a run for his money.
Participant[quote=FlyerInHi]Trump will be negatively affecting Republicans down ballot. Democrats will likely regain the senate.
Arizona is turning more Hispanic, just like Nevada, so John McCain is in danger.
http://www.politico.com/story/2016/05/trump-latinos-mccain-222810%5B/quote%5D
I can’t speak for everyone, but I’m definitely one data point to contribute to this statement. I’ve been voting R or L for a long while. I’m going through and asking all Republicans whether they endorse Trump now. If they say yes, I’ll vote for someone else, even if that someone else has a D in front of their name.
Luckily, Faulkner does not endorse Trump.Participant[quote=Blogstar]Crystal ball?
http://www.freddiemac.com/news/blog/sean_becketti/20160104_housing_sector.html%5B/quote%5D
Exactly. In 2008, fed fund rate was at near 0%, mortgage rate was @ 5%, lowest in at least 28 years base on that chart (since it only goes back to 1980), but I’m sure it’s lowest in >30 years. So, base on all those parameters, would you have guess rate would have dropped from 5% to 3.5% in the next 8 years? Hind sight is 20/20. Which is why I said my crystal is broken.Participant[quote=livinincali][quote=AN][quote=FlyerInHi]Flu, I think you’re saying that “no cost” loans are better because they allow you to refinance again and again, guilt free (loss avoidance. You’re not “throwing away” out of pocket fees. That’s the marketing angle.
But past is past. Make decisions based on what you know today.[/quote]
Do you have a crystal ball i can borrow?[/quote]It’s probably safe to assume that secular trend of steadily lower and lower rates from the early 1980’s until now is coming to an end. Not that rates will rise significantly from here but mid 2’s maybe 2 is probably the lower limit. It might make sense to pay a little bit for a lower rate now where as in the past 30 years it probably didn’t. Of course you didn’t necessarily know that at the time.[/quote]
That’s exactly what I thought 8 years ago when it was at 4.75% and I paid dearly to get it down to 4.5%. I had the same think you just laid out. I stop trying to time the bottom. Also, at 1/8%, we’re talking about $13k over 30 years, which isn’t big enough of a saving to take the risk by paying ~$2500 for. IMHO.
This isn’t considering what inflation look like over the next 30 years. $2500 is today $, while the $13k saving is over 30 years. If we experience another 70s/80s high inflation period, then the saving isn’t all that big.Participant[quote=FlyerInHi]Flu, I think you’re saying that “no cost” loans are better because they allow you to refinance again and again, guilt free (loss avoidance. You’re not “throwing away” out of pocket fees. That’s the marketing angle.
But past is past. Make decisions based on what you know today.[/quote]
Do you have a crystal ball i can borrow?Participant_
Participant[quote=FlyerInHi][quote=AN]
LoL, I did just what you suggested and I lost big. So you lost your credibility right there. If you think it’s too good to be true, you really don’t know what you are saying.Also, nice try dodging the request to show data.[/quote]
You lost because rates went down. So your buy down fees were “thrown away”.
But decision making is based on what you know in the present and expect the future to be. That’s how you evaluate alternatives.
Your decision at the time was sound, but your assumptions were wrong.1/2 the population believes that we will have a debt crisis because of deficit, entitlements, etc…. If you believe that will happen, you should buy down the rates. If not, you don’t have the force of your convictions.[/quote]that’s exactly my point. Regardless of what you choose, you’re making a gamble. Even if I didn’t buy down rate but just pay closing cost, I would still have lost.
Participant[quote=harvey][quote=FlyerInHi]I just read this thread quickly.
Harvey is right, you have to evaluate the NPV of different alternatives based on the info you have today. That means is you want to keep the house/loan for a number of years it makes sense to buy down the rate. The loan with cost might be a better alternative.One thing I remember about finance is that we assume that capital is unlimited or readily available, so we should choose the investment with the highest NPV. Problem is most people don’t have the cash to select the best alternative.[/quote]
And the point I’m trying to make is that mortgage brokers do not have an incentive to present all the alternatives in an objective way.
The cash cows of the consumer finance industry are the financially unsophisticated. Most Americans are perpetually struggling with cash flow, and the market for “no cost” and “cash back” products of all sorts is huge.
I’m not going to try to teach a course in finance on an internet forum. All anyone needs to know to do the calculations is that future cash flows need to be discounted. The rest is an exercise for the reader.
The more interesting question is why banks would even offer “no cost” and “cash back” loan products? They certainly aren’t doing it for charity. I am entertained by the lack of cynicism here.
The answer of course is that the banks expect to gain it back over the long term. My advice to anyone doing a refi that expects to keep a property for any number of years is to avoid “no cost” and “cash back” loans (and anyone that even offers them.) They are simply too good to be true.[/quote]
LoL, I did just what you suggested and I lost big. So you lost your credibility right there. If you think it’s too good to be true, you really don’t know what you are saying.Also, nice try dodging the request to show data.
Participant[quote=gzz]Well you are actually gambling that rates will stay low or keep going down.
If you lose, you pay more for the life of the loan. If rates go back to the 4% range and you intend on keeping the house for a long time, the extra .125 will be about $125 a year in interest payments per $100,000, gradually decreasing as the balance gets paid down. But on a typical San Diego house, about $12,000 over the life of the loan.
So it is not free money, rather you won a number of bets with banks. That’s great.
The process of doing the refi also results in a credit inquiry and a lot of time and hassle, though that depends on how complicated your finances are and whether you are self employed or not. I am, and it makes the mortgage process more complicated.
I’d need at least $1000 gain before I’d deal with all that, maybe $2000. Personally, if I want to bet rates will go down, there are easier ways of doing so with bond funds and ETFs.
In summary, the cash you picked up from banks doing serial refinances are no more free money than the money I made this year with some good stock investments. In both cases we made money with correct predictions about markets. It wasn’t free because we took on risk to do so.[/quote]
You’re making just as much of a gamble to pay point and buy down rate or pay closing cost to do the refi or staying put and do nothing because you don’t want to pay closing cost, hoping rate will go lower. Every decision you make about refinancing is a gamble. I’ve made all of those decision and lost big when I thought I could time the bottom of interest rate and bought points because I will be owning this house indefinitely.Participant[quote=gzz]”Refinancing one time and thinking you hit the jackpot
probably means you left a lot of money on the table.”My mortgage is a 3.375% 30-year with no PMI and 0 points.
Can you show me how I left money on the table?[/quote]My rate is 3.5% 30 years with all my closing cost paid for and about $2500 to pay for my property tax and insurance. If rate drops again where I can get 3.375% with about $4000 in credit like I am getting in this deal, I will refi again. A few years ago, I did exactly that 4 times over two years. So beyond getting lower rates, I got about $4k in credit each time I refi. So, I didn’t pay taxes or insurance for over 2 years. This time, I had option for 3.375% with $2000 in credit (should be enough to pay for 3rd party fees but not enough to pay for my property tax and insurance), so I decide to go with the 3.5% and get another $2k in credit. If I went with 3.375% and rates go down 1/8% of a %, if I refi again, I would lose out on the $2k – interest saving I would have saved going with 3.375% instead of 3.5%, which isn’t that big if it happened w/in a few months. That to me, is leaving $ on the table.
Participant40% of Republicans say they wouldn’t vote for Trump. They numbers are abysmal for Trump with minorities and women. At this point, I would like to see Trump get nominated and Hillary win by an landslide that we haven’t seen since Reagan.
ParticipantI find it hilarious that we have a thread about no cost loan periodically on Pigg. I’ve been on both side of this argument. I started with buying down rates, thinking 1) there’s no such thing as no cost loan, 2) 4.5% is the lowest it has been it many decades, so it can only go up from here.
Fast forward several years and many refi later, here’s what I’ve learned: 1)I can’t predict future rate any better than my guessing the lottery # 2) When rates were falling, I went through a couple of years of not having to pay property tax and refi-ing about every 6 months.
I’m now a firm believer and practitioner of “no cost loan”. I’m actually refi-ing again right now, dropping my rate down by 1/8%, as well has having my insurance and property tax paid for. If rate drop again in 6 months by another 1/8%, I would do the exact same thing again. I will ring this cow dry until my rate is 0%. Until then, I will keep on refi-ing as soon as I can drop my rate by 1/8% and have my tax and insurance paid for.
Participant[quote=FlyerInHi][quote=AN]
Why do X when doing Y will have a much bigger effect on CO2 emission? Why waste tax $ on X when doing C is a much better long term solution? Just because you’re against X doesn’t
mean you’re for Y and Z? Is it really that hard to understand?[/quote]Because things in life do change. Technology or popular demand can cause us to more away from coal power. It’s not useful to have inflexible ideological stances.
We don’t do everything for tech/function. We do things for vanity and bragging rights also. Those vanity projects bring people and development and economic prosperity.[/quote]LoL, dirty coal bring more prosperity than those vanity projects. Without dirty coal, China and India and even Hong Kong wouldn’t be where they are today. History have proven this point vs your hypothesis.
You can also thank dirty coal and oil for our industrial revolution. US and Europe wouldn’t be where we are today without it. Without a reliable source of energy/electricity, life would be very different. Unlike you guys, I don’t believe in going green at all cost. I think we should continue to look for cleaner and cheaper and renewable energy source. I also think we should strive for better efficiency. But all of this is because I want cheap energy for everyone around the world.
I still haven’t heard how these vanity project (BEV) would make a big dent in our CO2 emission. Care to explain how BEV would solve the problem I’ve raised?
-
AuthorPosts
