Open house for realtors yesterday - Page 3

novamc1 · ‎07-02-2015

Might be worthwhile to add one more point to this discussion.

Perhaps some people don't realize that the first 20 years or so of a 30-year mortgage are devoted mostly to paying down interest on the loan--and putting money in the lender's pocket, rather than building ownership equity in the property.

DH and I certainly made sure we paid off the interest as soon as we could through various means---points paid upfront and later a refinance to a shorter-term loan--so that, sooner rather than later, all our monthly payments began paying down the actual loan principal amount itself and increasing our equity in the house.

We eventually paid off the small amount of remaining principal in lump-sum cash before the loan term was to end, simply because we had the cash, but this wasn't necessary, just more convenient for us.

ccassaday · ‎10-21-2010

I would rather just pay extra every month towards the principle and pay my mortgage off early then give the bank prepaid interest.

We bought our last house in1978. So you can imagine what the interest rates were. I know we did refinance once in the following years. Yes houses were cheap. We only paid 53k for it back in 1978.

novamc1 · ‎07-02-2015

@ccassaday

Paying down principal in advance has advantages, but so does paying points to buy down the mortgage when the loan is first taken out.

Some people look for all the tax deductions they can get, and prepaid interest is tax deductible upfront on the next due tax filing. For some folks, this deduction can be valuable. It's on top of any other deductible monthly interest paid on the mortgage during that tax year.

A major consideration, always, when deciding to prepay interest, is how long a person intends to stay in that home. People who sell and move every five years might have a different view on the thing.

..'

Mj12 · ‎03-09-2010

wrote:
wrote:
Our builder has their own mortgage company and insurance - and if you get a $50,000 or more mortgage from them they pay your closing costs for you. So we got the mortgage even though we have the money to pay cash. I'm pretty certain it was 3.25% and we are required to keep the mortgage 90 days. So we will make 2 payments then pay off the total. That gives them enough time to sell the mortgage to someone else and make a profit despite the money they gave you for the closing costs. I'm certainly not paying thousands in closing costs if I don't have to.
I don’t understand why people would pay all that prepaid interest by using a points buy down. Your payment doesn’t end up being that much lower’. We will have a mortgage. All my parents money is in investments. S their FP said to just take a monthly income instead of paying it in cash. Paying taxes on that money would of increased what we paid for the house substantially. We used our house proceeds to pay off the land. And the house we are building is 3x more.

That would be a pretty low interest rate if that’s what you got. I know interest rates can vary depending on your state. Do you live in tampa?

@ccassaday - everyone's needs and goals are different. Just because your parents financed their new home this way, doesn't make it right for everyone, in every situation. (and no one needs to know anyone's city unless they volunteer it, so probably shouldn't ask that repeatedly).

novamc1 · ‎07-02-2015

Naming a city doesn't mean much when it comes to mortgage interest rates. The cost of money in one place isn't different than the cost of money elsewhere in the U.S., generally.

The financial markets determine the cost. Banks may structure their own set of loan terms that make the cost of money (and loans) appear different, but that's about all.

I've always been amused by lenders who advertise that "they will pay all closing costs" on a loan or a refinance. Yeah, right. I guess all those back-office workers and the legal staff are working for free?

Consumers need to do some research and find out exactly where those fees are hidden in the cost of the loan, even if they think the banks aren't charging them.

ccassaday · ‎10-21-2010

wrote:
wrote:
wrote:
Our builder has their own mortgage company and insurance - and if you get a $50,000 or more mortgage from them they pay your closing costs for you. So we got the mortgage even though we have the money to pay cash. I'm pretty certain it was 3.25% and we are required to keep the mortgage 90 days. So we will make 2 payments then pay off the total. That gives them enough time to sell the mortgage to someone else and make a profit despite the money they gave you for the closing costs. I'm certainly not paying thousands in closing costs if I don't have to.
I don’t understand why people would pay all that prepaid interest by using a points buy down. Your payment doesn’t end up being that much lower’. We will have a mortgage. All my parents money is in investments. S their FP said to just take a monthly income instead of paying it in cash. Paying taxes on that money would of increased what we paid for the house substantially. We used our house proceeds to pay off the land. And the house we are building is 3x more.

That would be a pretty low interest rate if that’s what you got. I know interest rates can vary depending on your state. Do you live in tampa?
@ccassaday- everyone's needs and goals are different. Just because your parents financed their new home this way, doesn't make it right for everyone, in every situation. (and no one needs to know anyone's city unless they volunteer it, so probably shouldn't ask that repeatedly).

Woah. Where did that attitude come from. It was just a observation and making conversation. I was not asking what city because of mortgage interest. I was just curious where she lived in Florida. No need to get snotty.

Bri36 · ‎02-20-2017

wrote:
I would rather just pay extra every month towards the principle and pay my mortgage off early then give the bank prepaid interest.

We bought our last house in1978. So you can imagine what the interest rates were. I know we did refinance once in the following years. Yes houses were cheap. We only paid 53k for it back in 1978.

Giving all out all this information about your parents' financial situation is pretty tacky.

Were you involved in their financial affairs in the 70s as a toddler?

151949 · ‎03-09-2010

@novamc1 I believe they took away the mortgage interest deduction with the new 2018 tax law .

151949 · ‎03-09-2010

@homedecor1 It has been shown 5 times in this first week - some of those were realtors though.The people who looked today were here over an hour. We came back at an hour after their appt. time and the cars were still outside so we went over our neighbors, and they left shortly after that.

bonnielu · ‎03-11-2010

I have often wondered about the RENT out rule. If I had a second house I would want to rent it to help with expenses. I would also want to make sure I rented it to someone who would care for it. It just seems that both side of the story make sense. So I just stay where I am and just visit other areas when I can.