Refinance Questions
10 years ago
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- 10 years agolast modified: 10 years ago
- 10 years ago
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Dave Donhoff - refinance questions...
Comments (10)Hi rivkadr, Okay, so some clarifying questions, then. I expect I will sound very stupid, but please recognize that I generally don't deal with money matters too much myself, so a lot of this is over my head. PUHLEAZE!!!! You deserve (and GET) my sincere respect for so MANY reasons!!!! A) You're willing to OPEN your MIND to serious financial topics (and not just swallow the emotional poop passed down from those who've never tried to understand!) B) You're willing to be completely OPEN WITH YOUR DETAILS (even if anonymously... you have no idea how many people are afraid of simply being real, even when nobody can know who they really are!!!) C) You are SO GENEROUS to do so out in the open on a public message board, where your learnings can be silently read and absorbed by others who WISH they had your guts!!!!!!!!! I cannot emphasize enough THE HONOR YOU DESERVE for taking this on, step by step, out in the open!!! TRUST me when I say, there are MANY folks who feel much "dumber" about their questions... and hate the fact they haven't had the courage to step out like you are. Your COURAGE trumps all... and it is the ONLY way anyone gets "smart!" OK, with your questions; 1) Itemize your current liabilities, and for each; Liabilities, I assume you mean things like student loans, mortgages, etc? i.e. stuff we owe money on. Exactly... make a laundry list for us here. If you have a recent credit report it will show much of what we are asking about... otherwise gather up your monthly bills. Example; $461,356 1st mortgage, (pull out your NOTE to check on the following,) 5 yr ARM in 3rd year, (amortized, or interest-only?) Start date was July X, 2005 Initial Fixed rate is X% Margin is 2.25 (or it is 2.75, or other?) Index is 1 month LIBOR (or 6 mo LIBOR? 1 yr LIBOR? Treasury index?) $45,356 Student Loan, consolidated from multiple loans, Interest rate is X%, minimum payment required is $YYY (or a % factor, if you know,) $12,486 Provident Visa card, 8.9% rate, 2% of principal minm payment (By the way... the 2% of principal is the standard minimum payment for revolving credit.) $8,594 Ford auto financing, 3.5% rate until 1/1/2010, then 8.9%. 8 year loan, minm req'd payment $x,xxx You get the idea... 2) Itemize your appreciating assets, and for each; What would an appreciating asset be? Are these like stocks? We don't own anything like that anymore. We have my husband's 401k -- does that count? Appreciating assets are real estate, stocks, mutual funds, bonds, cash-value life policies, pensions, annuities, securities held INSIDE your 401(k), IRA and ROTH accounts, and similar. Non-appreciating assets are your non-cash-value (term) insurance policies of all types, anticipated inheritances, business ownership, personal effects (tools, furs, jewelry, etc.) 3) What is your personal realistic exepected growth situation for your home over the next 10 years? Expected average annual rate of growth, 10 years? Total growth in dollars? I have no idea how I would estimate things like that :( I have no clue on most of your growth rate questions (except maybe our expected income -- I can hazard a guess on that). That is really *OK*!!!!!! When the answer is "I have no idea" it triggers some follow-on questions; (And its perfectly acceptable to "cheat" by asking realtor friends, checking Zillow, or Googling your local negihborhood name along with the keywords of "appreciation rates in Irvine" (or wherever.) Are you familiar with the past longterm trend of real estate in your area? If so, what was it? Do you believe that the future longterm trend will be significantly different? If so, in what way? 4) What is your estimated current NET Worth? Can you have a negative net worth? Unfortunately, yes... in fact the MAJORITY of the general public has a negative net worth. That happens when the total cash value of everything you own (and could sell,) is less than the total repayment balance of all the debts that you owe. I just reran our budget; due to my husband's job changes and a raise on my part, we're actually making an extra $3500 a month. Does that change your little form up above at all? That doesn't change the questions (especially the "divvy up your 1st and 2nd extra $1,000,) but it does give you some extra growth power, which is ALWAYS a good thing when you know how to employ it most effectively. ONCE AGAIN... I HONOR YOU FOR YOUR UP-FRONT COURAGE!!!! (I suspect you are "giving" people a great deal in this exchange!!!) Cheers, Dave Donhoff Strategic Equity & Leverage Planner...See MoreRefinance questions
Comments (4)Hi Laurie, I guess I am not sure how to go about getting the best rate, etc. At any moment in time, pretty much everyone has the same (or very similar) access to the market rate structures. The major difference (to you) is that mortgage brokers are required to fully disclose the actual underlying wholesale rate structures, while retail bank loan officers can hide them and "mark up" the rate you actually get to lock. Comparing "quoted" rates before you have your appraisal done & are ready to lock is futile, because even if the loan officer you are asking is being truthful, the underlying lockable market rates can & do shift literally daily (sometimes hourly.) The *BEST* way to get the absolute lowest available rate at the time you are actually locking is to use a mortgage broker who will agree to a flat/fixed fee, and show you the actual wholesale market rates you can choose from at the point of rate lock. Could you expand on what you said about having the financing properly structured? Sure. There are many ways to unintentionally get yourself locked into paying much more of your money out to the bank, and losing what you could have been gaining. Here's a very vanilla & simple example; Some people take a 15 yr FRM loan in the belief that it is better due to a lower interest rate offered. They may save 1/4% or even 1/2% in mortgage interest in doing so. Unfortunately, this also increases their amortization burden (a higher payment, with more money going into the actual real estate equity.) The amortized funds COULD have been accumulating in a compounding tax-advantaged growth account, and almost always at a higher rate of growth than the apparent interest "savings" from the paying down of the mortgage. Further, the starving of cash away from reserves and growth accounts by sending the money against the mortgage also means that a responsible family has to carry (and pay for) more insurance coverages... because they don't have the liquid reserves to be able to safely increase their deductibles and take more lenient terms (which then drops their insurance premiums.) Lastly, the money that gets directed into the real estate (against the mortgage balance) is money that is *NOT* growing the family net worth at all. It secures the one-time saving of interest (which counts, no doubt,) but it doesn't have the compound growth of funds growing alongside (but not INside) the real estate. Of course, there are lots of variables in the above explanation, and frankly a lot more that aren't even detailed out here. Ignoring these *WILL* cost the average homeowner tens of thousands (if not hundreds of thousands) of dollars more than they had to pay, over time. Hope that helps, Dave Donhoff Leverage Planner...See MoreMixing rustic with refined, floor question
Comments (8)I've only posted one photo, since I write for AtticMag. (Saving the good stuff! lol) Here is a picture of her DR area. She's replacing the Crate & Barrel table/chairs with something else soon. Lamps will go to guest room when we find suitable replacement(s). Her floors are 5" Hickory Forge, in Ringing Anvil by Anderson. 3/8" thick. This color (but not the entire line) was 50% off when we went to look for flooring. A sample was leaning against the main rack, and she went straight to it. My first thought was "no way she can swing that!" The 50% off was $2psf above the low end of her budget, but the it was worth it, as the floor makes the house (everywhere but kitchen and baths). It is absolutely gorgeous. Anderson paired with SC Corrections, and prisoners actually make the flooring. The article is quite interesting. "The $7- to $10-an-hour wages that Anderson pays for the inmates' work is divvied up in several ways. Some of the pay goes to the state for room and board, some helps support prisoners' families, a portion is earmarked for crime victim reparation and some of it is placed in savings accounts established for each of the prisoners participating in the program. Since 1996, Anderson has paid $7.3 million in wages." Here is a link that might be useful: Inmates Build New Livers from the Floor Up...See MoreRefinance?
Comments (6)" I,m angry that they snuck that 5.25 rate in on us (2009) as the current rate was around 4. I,m angry our lawyer didn't alert us but mostly angry at myself. " And expensive lesson to be sure- we must always read every paper handed to us. It can be intimidating when there are people looking over your shoulder waiting for you to sign the paperwork but remember- everyone in that room is working for you. Your money is paying all of them so let them wait while you do your due diligence. Go to Bankrate.com and see what rates are available locally, then expand your search as necessary. RESEARCH all avenues and look up words you do not understand....See More- 10 years agolast modified: 10 years ago
- 10 years ago
- 10 years agolast modified: 10 years ago
- 10 years agolast modified: 10 years ago
- 10 years agolast modified: 10 years ago
- 10 years ago
- 10 years agolast modified: 10 years ago
- 10 years agolast modified: 10 years ago
- 10 years agolast modified: 10 years ago
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