[no_such_reality]

what age are you guys talking about?

What nature is pounding into my head is that with age , what’s on the fork has an exponential impact.

The amount of effort required to lose a pound of flab AFAICT looks like the insurance premium chart by age.

If you got a long stultifying commute, long hour grind job, or otherwise unhealthy job environment, get a new job. IMO, out company environment are our biggest killers.

Reminds me of something I herd some talking head say years ago, look around the restaurant you’re about to eat in, the store you’re buying at, the choices your making re the same s them, you’ll look like they are.

[no_such_reality]

Using flu’s spreadsheet, and a 2.5% discount rate and the prior 1.5 point spread from the $400K loan ( applied to Flu’s loan for example), his lowest total discounted cost would be to pay the points and current payment. Basically adding 50% to his present value savings over current by paying up front.

We get the following NPVs.

Existing Loan 1 run to completion:
NPV cost $576K.

Loan 2 with current payment:
NPV cost $557K. $19K net savings.

Loan 2 with 30 year payment:

NPV cost $566K. Still better than current (provided he’s not paying $10K to do it. 😉 )

Loan 3 (not on sheet), pay the 1.5 pts spread in HLS example, drop rate to 3.5% 30 yr standard amort payment instead of loan 2.
NPV cost $557K. That amount includes the $7500 paid up front to close. Note, roll the points in and the NPV remains the same.

Loan 3 with the $7500 (1.5 pts) rolled in and current payment (overpayment):
NPV cost $550K

Loan 3 with the $7500 (1.5 pts) up front and current payment (overpayment):

NPV cost $547K (ugh dropped a minus sign, corrected)

[no_such_reality]

Interesting read. I’ll put this here since many think this person winning or that person winning means that or this.

Why has there been an exodus of black residents from West Coast liberal hubs?

[no_such_reality]

I’m still waiting on the no costs costs in th new disclosures.

Overall you’re all over complicating it. Th analysis is simple long term versus short term is relatively moot and you don’t need to worry about all the options out there.

All you need is what your current loan and financial situation is and what the one loan being proposed with what it will cost you in cash today (or rebate). HLS comp for it is a nice to know but irrelevant as you aren’t paying him directly (unless you negotiate to do that and then IMHO you’re bucking the whole industry)

The real key though is we currently are living in a bit of a mortgage bizarro world. There’s a lot of money out there looking for a home. So yes, they will pay you, thousands to take their 30 year mortgage at 3.75% because their alternative is 2.6% on a treasury. Or some other person taking the 3.5% or riskier person taking the same 3.75%

If you keep their loan more than a short period, they come ahead compared to you having their cheaper loan, but you’re still better off than you were.and you would have had to shell out money to get the lower loan.

So just get used to being a cow getting milked, that’s how the industry has relegated you.

[no_such_reality]

With the right WACC and discount rate you can talk yourself into or out of any investment. Even buying a UTC condo for the octogenarian client’s life estate.

To do either there needs to be answers to the questions i posed. I asked them because last refinance I did it was still Wild West.

Short of some wacky discount rate or exorbitant not mentioned cost, the NPV on your refi scenarios greatly favors the refi. Per my numbers above on mine the PV of FV of $33k ish is around $17.5k.

If the riefinance is “no cost” then a 0.125% no cost refinance with partial point credit back is worth doing regardless of loan amount. If that scenario doesn’t make sense, then there are other costs not being covered by “no cost” or a float issue with your other expenses to close.

I have no problem with brokers making money, it’s like real estate agents. it’s the cost of doing business. I like to know up front how my partners in a deal are making money and roughly how much.

Years ago, you could deal with a bank and they’d tell you the rate was 4%, you’d then call a broker, theyd tell you 3.75% and he’d make a nice commission on it. And it would be with the same bank. The broker provided a service so its fair they get paid, the financial sector though was treating me like a cow to be milked. Has that changed?
.

[no_such_reality]

If we look at the comsumer bureau sample docs. http://files.consumerfinance.gov/f/201403_cfpb_loan-estimate_refinance-sample-H24D.pdf

For that $400K no cost loan @ 3.75% with $1700 credit.

Is the $1700 credit a page 2 section A negative point? Net amount of a negative point and waived/lender paid fees in section A? B? C?

Is it the net remaining on D?

Does it cover E?

Is it the entry on J?

Pretty much A, B, C, & E are costs, IMHO. So when it’s no cost these are all netted out and $1700 coming back?

F&G are prepaid expenses for things you already are paying

so what are we looking like?

[no_such_reality]

I think $150/month is worth some hassle. $150/month adds up.

Especially when you take $150 on the mortgage, another $150 on the TV/internet/phone. Another $150 one your mobile plans.

Pretty soon you’re talking real money for hassle every other year on each.

[no_such_reality]

There may be a better way to approach the no cost discussion.

If per the prior pages, 3.75% still nets a $1700 credit to the borrower.

If the borrower is at 3.875%, when doesn’t it make sense to refi to the 3.75% and take the credit?

Property taxes and insurance are two biggies, but let’s assume they’re funded with reserves.

Will the borrower walk out without paying anything, the same outstanding principal and $1700 in their pocket?

[no_such_reality]

Most people don’t do the sweet spot. Most people refinance and pay what the monthly statement says. In that case, your mileage may vary.

Cutting short, math follows below. All of it really boils down to has the industry change compared to 2005-2011. Is no cost, no costs. No third party fees coming out of the woodwork?

So, how much hassle for $150/month? And even with some ‘costs’ creeping in, $150/month can pay.

In flu’s example, at 23 months, that’s pretty sweet spot. You will net close to $150/month ‘savings’ on the refinance if you pay the lower amount going forward (for the full 30 years). In the long run, the actual mortgages costs an extra $500 over the life of the loan. $500 30 years from now, LOL.

Total payments on the first loan for 30 years being $859,347. Payments on the refinance being, $54,903 towards the first and another $804,946 towards the second (over 30 years). Net $500 more trade off for $150 extra available cash per month.

That’s still a pretty deal IMHO.

If you are further in the loan, say four years, having made the first 48 payments, then refinancing and not making the increased payments will cost you $26,432 over the loan, again, monthly you pocket about $150, but the four extra years kill you.

The first loan still totals at $859,347. The first 48 payments weigh in at $114,580 and the refi-loan weighs in at $771,200 for a total payments to pay off of $885,780.

Of course, if you refi at 4 years in, keep making the prior payment, you will pay it off ‘early’ at month 299 of the new loan. It’ll save $33,039 over the current loan.

What’s $33,000 worth 25 years from now? About $17,500 assuming 2.5% inflation.

I get the lower rate will give more flexibility. I’ll have a “lower” outstanding principal at any given time, after eight years it’s finally $10K difference.

[no_such_reality]

Here’s my prediction.

On Wednesday November 9, 2016, roughly 1/3rd of of our country is going to be really pissed off.

If Trump wins, they’re be stuff getting smashed and protests in the streets.

If Hillary wins, they’re be more of the bitter animosity that has plagued President Obama.

[no_such_reality]

[quote=scaredyclassic]Are her medical records avail. For review?. For the right level of extreme decrepitude, it could work. Of course, then , she’s probably be in assisted living[/quote]

If she’s on title, isn’t assisted living going to suck all the equity out of the property?

[no_such_reality]

You can fix that W2 issue.

Every year you wage slave, is a year with your children you don’t get back.

[no_such_reality]

[quote=flu]Yeah, I don’t quite get what the issue is. If you want to refinance, you can either get a loan with no out of pocket payments with rate X or if you want to pay closing costs and points, you can get rate Y where Y is less than X.

There’s nothing deceptive about this.[/quote]

The concept is simple, the execution historically has been fraught with deception and poor ethics.

YSP still clouds the issue for the end consumer and obscures how much is really being paid for services particularly when tagged with the above, IMO.

[no_such_reality]

No cash out of pocket.

Whether it’s YSP or buried into the new principal, there’s money being sucked somewhere.

[no_such_reality]

First congratulations.

Third option, if the 2/2 remodel has been done well, can you get a better rent and more importantly, better live in tenant with the larger room, semi-private bath. ( I’m assuming the 2nd bath is common area/ 2nd bedroom.

Hard to say without seeing the house, I’ve seen a lot of older ranch style homes that had 4/2 configs in around 1500/1600. Some where really nice and other felt horridly cramped. A lot depends on how open the rest of the plan is and how much space was wasted on hallway and common room tramsitions.

As for the 4/2 with three roomies, might feel a little dorm roomie with that many sharing a bath.

Speaking of which, what is your target market for the tenant/roomies?

Not a fan of your #2 option sounds piecemeal which will detract from resale and good tenants. I’d stick with the as is if down well, or revert to original 4 bedroom config if it can be done well.

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