Mortgage Rates

Tim M

Tim M

PRESIDENT, Member # 015
GCC Member
Location (City)
St. Charles
First Name
Tim
Last Name
Mauldin
In case you didn't know, mortgage rates are at an all time low. We are re-financing at 3.625% @ 10 years. 3.75 for 15 year, and 3.9 I think for 30 year. If your current rate is at or above 5%, you should do it, may never see these rates again. :D :eek:
 
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If your diciplined, you can figure what your payment would increase per month to go to the 15, add it to your payment on your own, and pay off in the same time frame, and forgo the added expenses. Unless you are at a rate that is so high, it is a cheaper payment to re-finance.

We do this method, that way (in this economy) if times get hard, or a job gets lost, I'm not locked into the higher payment.

I do like the 15 year fixed, the Dave Ramsey way!
 
Just hope that the value of your house hasn't declined so much as to make your Loan to Value too high as to not qualify. Just ask me how I know. Perfect credit, plenty of income, but when the value of your house declines 13% from 2/2008 to today, you're screwed.

Steve
 
And because you are in Wildwood. :rolleyes: :) Ours has steadily gone up as the new Page Extension get's closer to completion. I don't foresee any issues, but yeah, you're right.

Craig - We currently have a 15yr fixed with 8 years left on it. The 10yr will be $100 more/month but the cars and the home equity loan will be paid off. We can then take the money we are saving from the car and loan payments, and apply to this loan to pay off in the same amount of time by doing that every other month :D Will be so glad when the house is paid off.
 
Is it really smart to roll a car loan into a longer term mortage??? You will be upside down immediatly on the vehicles. Home equity lines usually carry a much cheaper interest rate and is a good way to finance a vehicle/short term items.
 
Total of both car loans and home e. loan is about $1,200. I will be raising my monthly house payment by $100. I will take the difference, have to be disciplined, and apply that every other month on the home loan paying it off in less time than I currently have on my home loan. That plus the interest I'm paying on both car loans is much higher. I think the savings in time and total money is worth it as well as total interest saved. Plus, I can write off the interest still on my home loan, right?
 
Tim,

Sounds like you might be paying on the cars for the next 10 years?
 
Next 8, but at a much lower interest rate. Not only do I save on the interest, but I save on the monthly payments. Kind of like anything when you talk about interest and taxes, pay now or pay later. This way, it will benefit us on our taxes at the end of the year since I stepped into a different tax bracket.
 
Purple Venom said:
Next 8, but at a much lower interest rate. Not only do I save on the interest, but I save on the monthly payments. Kind of like anything when you talk about interest and taxes, pay now or pay later.
Click to expand...

Tim...I gotta be missing something here...because it sounds like you are going to be paying later. MUCH more later.

Yes....paying off your cars and equity loan in 8 years may provide a lower interest rate and a lower monthly payment than paying them off...in say 3 years....

BUT...your making additional YEARS of payments that will dramatically offset any perceived savings in interest rate and monthly payments.

The best analogy I can offer is the difference between a 15 year and a 30 year home loan. The 30 year provides a smaller monthly payment but the additional 15 years of payments is a killer in total interest paid over the additional term of the loan.

Also.... how does a loan consolidation /extending a loan payoff drop you into a lower tax bracket? The added deductible mortgage interest from transferring the cars and equity loan to your home mortgage is going to be offset by a lower home mortgage interest rate. I only see your tax bracket changing if you are presently just barely above the bracket dividing line. And if that's the case....you should be able to come up with other increased personal deductions to accomplish the same result.

Donations to charity being one example. Taking deductions for "Hobby expenses" might even be a consideration if you have an intent to profit from racing or showing your car...If so...the recent purchase of your car trailer and your travel expenses to Muncie and Putnum "could" be deductible up to any gross receipts received.

Getting a lower home mortgage interest rate...while REDUCING the number of years of your present loan is a money saver. No question.

However re-negotiating a lower interest rate for a longer term...generally...is not. And you are contemplating going from an 8 year term to a 10 year term. The added interest paid for the last two years should exceed any savings from a lower interest rate for the first 8 years.

Now granted...none of us know your exact numbers...so I am making some general observations...and please correct me if I'm off base. But..it appears you are not necessarily going to save money based on what information you have shared.

What am I not seeing...?
 
Tim,

Shoot me over some numbers and I can construct an amortization table for you. Then you can see the difference in interest your are paying from your current scenario to the one you're proposing. Once you see the nubers on paper, the answer will be alot clearer.

I always do this before a purchse/refi/etc.

My $0.02
 
Chuck, you have an e-mail from me. Kerry, I see what you are saying now. I downloaded an ammortization schedule, and Linda explained something to me that makes sense. And I'm seeing now how loan companies can make something sound really good.
 
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