| T.R | Title | User | Personal
Name | Date | Lines |
|---|
| 34.1 | | SSBN1::YANKES | | Mon Feb 03 1992 09:37 | 16 |
|
What the "experts" are talking about when they suggest a 2% spread
between the old rate and the new rate is based on the notion that the
average homeowner owns the home for an average of only 7 years. Therefore,
this shorter average time that the new mortgage will be in force means
that the homeowner has to save more per month to make up the average
closing costs.
Note all the "averages" in that paragraph. If all these averages
are true for someone, then yes, the "experts" advice about 2% makes
sense. In your case, as long as you are planning on staying in the
house long-term (ie. way above the average of 7 years) then yes, you can
save money on the 1% spread. This is a perfect example of the advice
that everyone's situation is different and no one answer fits all.
-craig
|
| 34.2 | | CSC32::J_OPPELT | As good as hitting the lottery. | Mon Feb 03 1992 17:08 | 7 |
| Did you look at what would happen if you did not refinance, but
simply made a one-time $300 payment against the principal today?
How much does that shorten your mortgage? (How much do you
currently pay to principal under the 10% loan? Divide $300
by that amount and you will get a VERY ROUGH estimate of how
much you shorten the life of the loan.)
|
| 34.3 | Make sense! | KYOA::SARIAHMED | | Tue Feb 04 1992 09:38 | 21 |
| Re .-2
Make sense, the last house I had, I lived there for 12 years, so I
figure I have at least another 7 years to go. Also I was looking at
a not to exceed threshold interest rate/point combination. Currently
the bank I am dealing with is offering 8.5 and 1 1/4 point, although
not quite 2 point spread is better that the 9.125 I based my
calculation on.
re .-1
Interesting, never thought of that, I'd be curious to know too, right
now my guess is that It wouldn't make much of a difference...
Again thanks for the input/advice!
Morad.
|
| 34.4 | Just a guess. | CSC32::B_HIBBERT | When in doubt, PANIC | Tue Feb 04 1992 12:30 | 6 |
| As a guess, I would say you are paying about $75 per month towards principal
after 5 years, this assumes you haven't been making any prepayments. If you
make a 1 time payment of $300, it would cause you pay the loan off about 4
months earlier.
Brian Hibbert
|
| 34.5 | 2 year rule assumes large closing costs | STOKES::NEVIN | | Fri Feb 07 1992 12:43 | 8 |
| I believe that the two year rule also assumes both points and
significantly higher closing costs. With a $300 closing cost, you will
probably break even in less than 6 months. One word of warning:
with real estate prices dipping, you may get stuck having to pay
private mortgage insurance, which is usually around $30-40/month.
Check on this possibility and the cost of it before you commit.
Bob
|
| 34.6 | tool? | TEEUP::MOOK | Where are you between two thoughts? | Mon Feb 10 1992 13:05 | 4 |
| Does anyone have a pointer to the LOAN program mentioned in .0? I'd like to
know if it makes sense to go from my 10% 30yr to the current rates for a 15yr.
Bob
|
| 34.7 | mortgage programs | TEEUP::MOOK | Where are you between two thoughts? | Wed Feb 12 1992 11:55 | 6 |
| Found it. There's a bunch of mortgage programs in the INVESTING conference
under note 170 some of which are not there any more but some sources are there
to extract. LOAN is still available to run however.
Bob
|