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HLS
ParticipantIdiotic semantics..
When you are offered something FREE, at NO COST, zero, zilch, nada, rien, niente, gratis….
Keep telling yourself (and insisting) that it’s not free because if you paid something you could get even more.
You’re right. You win. Pass the word. Tell everybody that you know……
Participant[quote=Blogstar]Break even point does matter if you are going to stay in the home for a long time. The lower interest rate of a loan with “costs” could be a thing of value over the “no cost” loan.
Paying extra principal on the original loan ,the “no cost” refi, or a standard fees lower interest rate refinance is going to save money in all three cases. Nothing special about the “no cost” loan there.
We shouldn’t act like no cost means free.[/quote]
******No cost DOES mean free.
The comment made was that there is no such thing as a no cost loan.
THERE ARE LOANS AVAILABLE WITH NO COST.
I’ve done hundreds of them for borrowers and explained them clearly. Didn’t cost them one penny.
No addition to principal balance, no hidden fees or costs.
There is no break even point or recovery period with a no cost loan. You benefit from day 1 with a lower rate.If you want an even lower rate loan with costs you can get one too.
A loan with costs could save more in the long run,but many people consider neither a refi with costs or without because they are confused.30yr loans that have a cost usually have a TRUE break even period of at least 4-5 years but very few people know how to figure the true savings properly.
(You don’t just divide the loan cost by the monthly savings)
Payments are a combination of principal & interest
and there is the time value of money.Anybody who paid any costs for a loan over the last 8 years or so probably wasted their money.
Intelligent, savvy borrowers refinanced multiple times all the way down the past few years and some pocketed thousands of dollars in the process and they are still on track to pay their loan off at the same time as their original loan was scheduled to be paid off.
There are many people who are confused, stubborn or foolish who will end up paying tens of thousands of dollars in extra interest because they just don’t get it.
BTW,
you are wrong that a lower rate refi is going to save money in all 3 cases. That’s not always true.ParticipantIt is still a bit complicated to get PMI removed.
Loan originator has nothing to do with it.
The PMI is a 3rd party insurer.Refinancing to save .25% was worth it and better for you.
If you can afford it, keep making your original loan payment on your previous loan and you could shave several years off of your mortgage term. More money will go to principal each month, less to interest.
The guaranteed compounded savings is huge.For FNMA/FREDDIE
A 20% reduction of your original loan balance you usually need to jump through hoops and pay for an appraisal.At 22% reduction of your original loan amount it is supposed to be removed automatically (regardless of property value) but some insurers have a minimum time period, (i.e. 2 years)
Because there was a time that “real estate never went down”
the guidelines stated that removing PMI was based on the reduction of your original loan balance; so it was possible with property value declines to be upside down on the value of your property but still get PMI removed.Recent FHA loans may never have MIP removed, it will stick with the loan until paid off up to 30 years.
ParticipantI’m not here to argue with you.
Balance added to the principal is not a no cost loan.You apparently don’t understand what you’re talking about.
I know your intentions are good and that you think you know what you’re talking about, but you don’t.If you have advised anybody not to get a NO COST loan which would lower their rate .25% or more,
your ignorant, foolish advice could cost them $10,000-$30,000 or more over the life of their loan if they listened to you. (Depending on their balance and interest savings)If you’d like to explain it to me, I’ll be happy to listen. Feel free to contact me if you’d like.
(I can also offer a clear, honest explanation but I doubt you want one)The epitomy of ignorance & foolishness is someone who can qualify to refi with a no cost loan that is at least .25% below their current rate but decides not to because they are bothered that someone is making money.
It’s that simple.
There is no recovery period to figure out.**There is no reason not to refi to a lower rate at no cost if one can qualify**
I’ve heard more than 50 different objections from some very intelligent people. They were all wrong.
After an explanation they saw the light.Stubborness is costing many people a lot of money.
ParticipantWhen a loan has NO COST to the borrower what would you call it ?
There’s nothing misleading about it.ParticipantA no cost loan is going to cover all of your 3rd party closing costs.
You need a new Lender’s title insurance policy for the new loan.
It’s a brand new policy.Participant[quote=gzz]Lower rate but more PMI/costs is no deal.
This is what I did, and when I finally did my refi, my monthly payment went from 2450 to 1950. That’s $6000 a year less in housing costs going forward for decades. [/quote]
It’s nice ‘that’s what you did’ and it worked out for you but’ it’s poor advice. What if rates go up ?
OP didn’t mention more PMI.
If you only compare your monthly payment amounts when you refi you don’t understand the benefit of a refi and your savings may not be as much as you think.
A true NO COST loan includes the appraisal cost, did that surprise you ?
Nobody should ever have a drop of 20% in their payment.
unless your rate dropped 1%-2% which would mean that you should have refinanced multiple times all the way down.Your $6000 a year savings doesn’t sound right.
ParticipantSean,
If you want to contact me and provide your EXACT details of each I will be happy to explain them for you.
I’m a Realtor & Mortgage Broker and have helped dozens of Piggington readers.Some of your closing costs are not going to change regardless of which loan you get.
It’s easy to get confused by the numbers.
$15,000 needed for a 3% down $200K loan doesn’t sound right.Is the 3.75% an FHA loan ?
Is the 4.00% not FHA ?with an FHA loan you may have mortgage insurance for 30 years. DO NOT assume that you will be able to refi to a lower rate and have it removed in the future as rates could be much higher and it may not make sense.
Without more info I do not know what you qualify for but 4.00% is not a great rate today if your mid credit score is above 740, even with 5% down.
Without EXACT information, NOBODY can answer your question and many suggestions offered here will attempt to be helpful but in reality be bad advice.
ParticipantInteresting.
So in City of SD, once you have been a tenant for 2 years,
landlord needs a ‘valid reason’ to not renew, correct ?However,
With a month to month they can raise the rent with 60 days notice,,
with a lease they can raise the rent at end of term.If a landlord wants to get rid of a tenant, is there a limit as to how high they can raise the rent ?
Is a ‘valid reason’ required to raise the rent ?
ParticipantI’m not an attorney and I’m not going to attempt to figure out what a ‘valid reason’ is..
It’s cloudy… section 98.0730(e)
Does it apply if there’s no signed,valid lease agreement ??in this case the OP **DOES NOT** have a lease.
there are reasons why leases exist and a MONTH TO MONTH RENTAL AGREEMENT **IS NOT A LEASE**
Leases that expire revert to month to month agreements.
Participant[quote=PCinSD]No idea what part of town you’re in. But if you rent in the city of San Diego your landlord can’t simply terminate your lease. They must have very specific reasons like failing to pay rent, breaching terms of agreement, doing something illegal, etc.[/quote]
???
A landlord can’t terminate a lease outside the city either, it’s not limited to ‘the city of San Diego’In this case the OP doesn’t have a lease.
A month to month agreement can be terminated with 60 days notice without any reason.Is there something special going on in San Diego ?
ParticipantHatfield,
It’s dangerous to assume what someone else is thinking
OR that someone else would do what you would do.I’ve been a landlord for over 30 years. I don’t want problem tenants, I don’t care about turnover.
I’m not going to let the inmate run the asylum.Having a lease allows the tenant to stay as long as they keep up their end of the deal….
Having a month to month allows me to get rid of them at any time for any reason. There’s two ways to look at it.Deadzone is not a problem tenant BUT having a problem with the owner’s agent and doesn’t have a lease. Delicate situation.
I’ve had property managers and have had tenants contact me directly complaining about the manager.
I trusted my manager and didn’t want to be involved with the tenants complaints at that time. They eventually worked it out with the manager.ParticipantHatfield
Exactly! A good customer to a credit card company is one who pays interest, late fees and over the limit fees.
Paying your bill in full every month does not make one a ‘good customer’ 😉Deadzone,
Before you consider paying for any work on your own OR
pushing the envelope about this issue, I would strongly suggest that you get a lease signed, assuming that you want to stay there.Unfortunately, you are subject to receiving a 60 day termination of tenancy at any time.
You currently do not have a lease, you have a month to month agreement.What did it take for you to get the tile work done that has already been completed ?
You are potentially treading on thin ice.
They do not need to give you any reason to give you a 60 day notice.Your only remedy could be going to court which could get messy and expensive.
ParticipantHarvey,
Y’all don’t get it.It’s not common sense and it is idiotic.There is no reason to reduce principal and take a loss when the interest rate can be reduced and lower the payment.
‘homeowner’ has to live somewhere. If you lower their payment and they still cant afford it, they have no business staying there.There is no reason to reduce principal, It’s completely unfair to others who have struggled to make their payments.
I’m convinced that idiots come up with these programs.I understand foreclosure but it rarely has higher costs
than principal reduction. -
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