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Mortgage Rates (4 Viewers)

culdeus said:
This appraisal thing is such a scam in our area.  I mean the tax appraisal value is up over the purchase price.  Equity wise at this point would be financing like half the tax appraised value.  So you need someone to come out to look at that for 500 bucks?   An empty lot with nothing but dog poop and dead grass goes for more than what my loan would be.  #### you.
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It’s a scam everywhere. Guy in February came out to appraise our new house, spent 15 minutes here and appraised it exactly to the value we were buying it for, to the dollar. What a racket. 

 
-OZ- said:
If home prices drop and mortgage rates decrease, I'll feel like an idiot for not having more cash for a down payment on rentals. 

Time to start hiding cash?
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Real estate typically does well during recessions because of low rates so I wouldn't expect major price drops but the low rates will certainly help cash flow.

 
We just closed on a 20 year refinance @ 3.5. We were 9 years in on a 30 year @ 4.5. We knocked a year off our mortgage and we are saving about $175 per month. We don’t have to make a mortgage payment until November 1st, which is nice. We plan on using the savings over the next two months to pay off the rest of my wife’s student loan. So come November we’ll be saving about $400 a month. I’ll take it. 

 
Man In The Box said:
We just closed on a 20 year refinance @ 3.5. We were 9 years in on a 30 year @ 4.5. We knocked a year off our mortgage and we are saving about $175 per month. We don’t have to make a mortgage payment until November 1st, which is nice. We plan on using the savings over the next two months to pay off the rest of my wife’s student loan. So come November we’ll be saving about $400 a month. I’ll take it. 
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Gave this a like because that’s awesome but just as much because I’m a huge AiC fan.  

 
This might be a dumb question....but if you pay extra monthly on your mortgage, does it impact the mix of Principle/Interest?  We've been paying extra each month, and now that I look at my current statement... I'm paying less interest each month in my current payments than what is indicated by an amortization schedule based on my original loan.

I want to look at my amortization schedule on my current loan and compare to a re-fi scenario to help decide if I should re-fi. 

 
Fruitbat said:
This might be a dumb question....but if you pay extra monthly on your mortgage, does it impact the mix of Principle/Interest?  We've been paying extra each month, and now that I look at my current statement... I'm paying less interest each month in my current payments than what is indicated by an amortization schedule based on my original loan.

I want to look at my amortization schedule on my current loan and compare to a re-fi scenario to help decide if I should re-fi. 
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Yes, the extra should go to principal slightly reducing interest in subsequent months.  Interest for most mortgages is calculated by dividing annual interest rate by 12 (12 months) and multiplying that by the principal balance.  

 
Fruitbat said:
This might be a dumb question....but if you pay extra monthly on your mortgage, does it impact the mix of Principle/Interest?  We've been paying extra each month, and now that I look at my current statement... I'm paying less interest each month in my current payments than what is indicated by an amortization schedule based on my original loan.

I want to look at my amortization schedule on my current loan and compare to a re-fi scenario to help decide if I should re-fi. 
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You've changed the table, it no longer applies directly. If you look at the amount owed, reference the table using that instead of the calendar. That should line up. 

 
-OZ- said:
You've changed the table, it no longer applies directly. If you look at the amount owed, reference the table using that instead of the calendar. That should line up. 
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Ahhh-yep.  move down the table to my actual current amount owed and the split lines up with my current payments. 

So another way to look at it is....by paying extra you are moving forward in time in the loan schedule, getting to the end of the table quicker.

Thanks!

(and thanks, Juxtatarot!)

 
Capella said:
It’s a scam everywhere. Guy in February came out to appraise our new house, spent 15 minutes here and appraised it exactly to the value we were buying it for, to the dollar. What a racket. 
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It’s worth whatever someone will pay for it. 

 
Otis said:
It’s worth whatever someone will pay for it. 
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I pay people every year to try to lower my appraisal for taxes.  It is defended by volunteers.  Can I hire one of them since they seem invested in keeping my valuations high?

 
Getzlaf15 said:
Pro tip -   Refi/buy a property at the end of the first week of the month.  Don't have to make last payment on current home (most loans have grace until 15th) and then next payment is 7 weeks away.    Interest only will be part of your closing costs, but I add that to the loan.
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If you take advantage of the grace period, does that hurt your credit score?

 
Speaking of the HELOCs at the higher rates than a  normal mortgage, I was watching a youtube video about using a HELOC from either primary residence or another rental.........to buy another rental property, then getting a new conventional mortgage on that new property, then using that money to just pay off the HELOC balance.

So I guess the question is, once you own a property outright, you can basically just refinance and put a whole new mortgage on the property right after you bought it with the HELOC money?

Sorry if this sounds dumb, but I have never refinanced anything or used a HELOC ever.

 
ghostguy123 said:
Speaking of the HELOCs at the higher rates than a  normal mortgage, I was watching a youtube video about using a HELOC from either primary residence or another rental.........to buy another rental property, then getting a new conventional mortgage on that new property, then using that money to just pay off the HELOC balance.

So I guess the question is, once you own a property outright, you can basically just refinance and put a whole new mortgage on the property right after you bought it with the HELOC money?

Sorry if this sounds dumb, but I have never refinanced anything or used a HELOC ever.
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How is that better than getting the mortgage on the rental property initially?

 
Steeler said:
How is that better than getting the mortgage on the rental property initially?
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It's a way to not have to put down a significant down payment, which is usually like 20% from what I can gather.   Then get a conventional mortgage once you own the property, then use that money to pay off the HELOC.  

Edit....if you have a time, a quick 5 minute video on this. 

https://www.youtube.com/watch?v=YaF-Uu9T0xw

It seems like it simplifies a lot of things, little to no money out of pocket, and maybe even better rates saving you money.

 
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Also, the HELOC is like buying a property "cash".

The first rental I bought a few years ago was only accepting cash offers, and I happened to actually have the cash for it.  I bought the property several thousand dollars cheaper that way.  It immediately would have appraised to the point where 80% of its value would have pretty much paid off what I would have bought it for with a HELOC

The other property I bought a couple years ago I actually did purchase it with a conventional loan.  I had to put down about 15k of my savings though.  

 
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And I hope I dont sound like I am trying to be some expert, lol.  I dont know this stuff well, just trying to talk out loud about it amongst others who probably know this stuff 100x better than I do.

I do like the idea of acquiring money making real estate without actually using any of my own out of pocket money.

 
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culdeus said:
This appraisal thing is such a scam in our area.  I mean the tax appraisal value is up over the purchase price.  Equity wise at this point would be financing like half the tax appraised value.  So you need someone to come out to look at that for 500 bucks?   An empty lot with nothing but dog poop and dead grass goes for more than what my loan would be.  #### you.
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I think it depends if the appraisal is being done for the purchase of the house or other. When I bought my house, naturally the market was red hot and not surprisingly the appraisal came back to match the loan amount. Yes, a complete money grab.

As I’ve mentioned, I’m coming up on 15 years on my 30 year fixed at 4.5% and looking to convert it over to a 15 year fixed for at least 1% less. Not interested in taking any equity. Had an appraiser provide me with a thorough appraisal with nothing more than the comps in the area. He came out and went through the entire house room by room. I think it cost around $500. Appraisal came back well over what we expected based on neighborhood comps. Worth every penny imo.

From what I understand, there are levels of appraisals from Google Maps to fine detailed walk throughs. Mine was closer to fine detail. Not all appraisals are equal.

 
ghostguy123 said:
So how do lenders make money?

What's the "catch"?  Do they just want people in homes because property taxes are through the roof?
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That’s before fees. They obviously are making some money or they’d be better off just keeping cash.

It might also be a bit of clever marketing. I assume everyone wouldn’t qualify for that negative rate.

Frankly, though, it worries me as a sign of poor, global growth rates.

 
Juxtatarot said:
That’s before fees. They obviously are making some money or they’d be better off just keeping cash.

It might also be a bit of clever marketing. I assume everyone wouldn’t qualify for that negative rate.

Frankly, though, it worries me as a sign of poor, global growth rates.
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If it makes you feel better, Nigeria and South Africa have higher rates.

 
I’m thinking of buying house where my preschool currently operates.  Assuming business mortgages are more expensive, could I say there’s an apartment in house with my daughter living there to secure lower rate?

 
great thread - thanks for all the info - 

currently $457K for 22 yrs left on my 30 yr 4.625% loan - kids going to college soon.....would really like to move to a 15 yr and build more equity...house could appraise anywhere from $530K-580K so a bit of a crap shoot.....does it make sense to wait until rates (hopefully) go lower and I get the equity a bit higher to ensure I hit the 80% mark?  if it ends up at 85% or so would i need pts or mortgage insurance?  also didnt calculate closing fees/costs - do those get rolled into the loan if any?  

converting to a 15 yr would add $500 per month to payment (not easy but doable) but cut 7 yrs and increase principal by $1,000 per month 

any thoughts?   thx!   

 
Capella said:
It’s a scam everywhere. Guy in February came out to appraise our new house, spent 15 minutes here and appraised it exactly to the value we were buying it for, to the dollar. What a racket. 
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If there's an accepted offer on the house, what better indicator of value is possible? These guys get a couple hundred bucks to produce a report. They're not going to stick their necks out based on some comps or a tax value.

 
CletiusMaximus said:
If there's an accepted offer on the house, what better indicator of value is possible? These guys get a couple hundred bucks to produce a report. They're not going to stick their necks out based on some comps or a tax value.
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are you kidding me? He got 600 freaking dollars for an hour of work.

 
Hedgehog said:
great thread - thanks for all the info - 

currently $457K for 22 yrs left on my 30 yr 4.625% loan - kids going to college soon.....would really like to move to a 15 yr and build more equity...house could appraise anywhere from $530K-580K so a bit of a crap shoot.....does it make sense to wait until rates (hopefully) go lower and I get the equity a bit higher to ensure I hit the 80% mark?  if it ends up at 85% or so would i need pts or mortgage insurance?  also didnt calculate closing fees/costs - do those get rolled into the loan if any?  

converting to a 15 yr would add $500 per month to payment (not easy but doable) but cut 7 yrs and increase principal by $1,000 per month 

any thoughts?   thx!   
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I would refinance, stat.  You should be able to shed about a point off of your current mortgage rate.  Which should be a good couple-few hundred a month at those levels.  

In Indiana, we have a very favorable tax benefit on our 529 plan. You get 20% of every dollar invested in a 529 plan back right off the top in state taxes up to $5k.  It sounds like you are planning to pay for part of the kid's college at least, I would check to see if your state has a similar benefit.  They vary by state.  This is in effect a 20% discount on college.  You can even choose your investment and choose a money market fund given that the kid is going to college soon or if you don't want to expose those funds to the volatility of the market.  

The rest depends on personal preference...are you maxing out retirement vehicles like employer 401k and Roth IRA?  The tax benefits on those alone outweigh the benefit of paying down the loan. 

All that being said, I'm not a financial planner by trade so take the above with a grain of salt and tailor to personal preference, but for sure shop that loan at least. 

Good luck!

 
ghostguy123 said:
Speaking of the HELOCs at the higher rates than a  normal mortgage, I was watching a youtube video about using a HELOC from either primary residence or another rental.........to buy another rental property, then getting a new conventional mortgage on that new property, then using that money to just pay off the HELOC balance.

So I guess the question is, once you own a property outright, you can basically just refinance and put a whole new mortgage on the property right after you bought it with the HELOC money?

Sorry if this sounds dumb, but I have never refinanced anything or used a HELOC ever.
Click to expand...
Not an expert, but most traditional lenders will make you wait 6 months for a "seasoning" period before putting on a new loan. So you'd have to be able to buy the new property outright with the HELOC cash otherwise you have to wait to refi 6 months later. They will usually only refi up to 75% of the appraised value so this strategy is usually more viable if its a fixer upper where you buy it at a depressed value, make improvements, and then refi later and try to recapture as much of your initial investment as possible. That's an extremely popular strategy all over the internet these days called BRRRR: "Buy, Rehab, Rent, Refinance, and Repeat."

There's also a lending product called Delayed Financing, but I think they will only lend on original purchase price plus improvements (never used it myself.) Would need a flexible lender to refinance right away but they aren't that hard to find right now. Just generally not at the huge banks: BofA, Chase, etc.

 
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Turk said:
I would refinance, stat.  You should be able to shed about a point off of your current mortgage rate.  Which should be a good couple-few hundred a month at those levels.  

In Indiana, we have a very favorable tax benefit on our 529 plan. You get 20% of every dollar invested in a 529 plan back right off the top in state taxes up to $5k.  It sounds like you are planning to pay for part of the kid's college at least, I would check to see if your state has a similar benefit.  They vary by state.  This is in effect a 20% discount on college.  You can even choose your investment and choose a money market fund given that the kid is going to college soon or if you don't want to expose those funds to the volatility of the market.  

The rest depends on personal preference...are you maxing out retirement vehicles like employer 401k and Roth IRA?  The tax benefits on those alone outweigh the benefit of paying down the loan. 

All that being said, I'm not a financial planner by trade so take the above with a grain of salt and tailor to personal preference, but for sure shop that loan at least. 

Good luck!
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Aren’t rates more likely to go down than up at this point in the near term, though?

 
Capella said:
are you kidding me? He got 600 freaking dollars for an hour of work.
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there's actually a lot of work and research after they visit the home.  I get calls all the time from appraisers asking me questions about homes I've recently had buyers purchase that they are now using as a comp.   They want to get the comps as accurate as possible.

 
Walking Boot said:
Due to a screwup by my lender, they needed a quickie appraisal signed off on. The sellers weren't around to open the house up and no one could get the key there in time. So he did a "drive by appraisal", just took a look at the house from the outside and peeked in as many windows as he could and landed on exactly the purchase price in 10 minutes. Amazing!
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What luck! 

Yea our realtor said this guy may do a drive-but appraisal as well but fortunately he was able to carve dozens of minutes out of his day for us. 

 
Getzlaf15 said:
there's actually a lot of work and research after they visit the home.  I get calls all the time from appraisers asking me questions about homes I've recently had buyers purchase that they are now using as a comp.   They want to get the comps as accurate as possible.
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Like anything I am sure there are extremely good people involved. 

 
Capella said:
Like anything I am sure there are extremely good people involved. 
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Most are really good.    Seems like 1 in 40 of them is very anal and has to do everything by the book and more.  These guys won't appraise well when the market is rising.  

 
Buckna said:
Not an expert, but most traditional lenders will make you wait 6 months for a "seasoning" period before putting on a new loan. So you'd have to be able to buy the new property outright with the HELOC cash otherwise you have to wait to refi 6 months later. They will usually only refi up to 75% of the appraised value so this strategy is usually more viable if its a fixer upper where you buy it at a depressed value, make improvements, and then refi later and try to recapture as much of your initial investment as possible. That's an extremely popular strategy all over the internet these days called BRRRR: "Buy, Rehab, Rent, Refinance, and Repeat."

There's also a lending product called Delayed Financing, but I think they will only lend on original purchase price plus improvements (never used it myself.) Would need a flexible lender to refinance right away but they aren't that hard to find right now. Just generally not at the huge banks: BofA, Chase, etc.
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Right.  Waiting 6 months or longer to refinance is no problem unless your plan is to just keep buying and buying as quickly as possible. 

A year or so later and the value could easily increase while the amount you need to borrow goes down.  

 
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Capella said:
It’s a scam everywhere. Guy in February came out to appraise our new house, spent 15 minutes here and appraised it exactly to the value we were buying it for, to the dollar. What a racket. 
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:lmao: :lmao:

A radio personality I podcast likes to rant on these guys but a lot of shtick.   "What's the Zillow estimate to house on the left? Oh $300k?  The house to the right? $310k?  Let's say your house is $305k!  LUNCH!!!!!"

 
Appraisals! I get it. They’re conservative. There’s nuances. Local expertise. Based on actual sales.

I have a question. If a subject property of 40 acres on water, of which 10 acres and house compare favorably to other comps with say 1-2 acres and house on water, can an adjustment be made to account for the “extra” land value? I believe my appraiser was afraid to have such a large adjustment +200k for the extra 30 acres of land, based on sold land comp. 

Point is there are no true comps so it’s very subjective. But the above are facts. I believe if my house had only 10 acres it would’ve appraised about the same. Give me the value of my full acreage! 😡 

 
Anyone ever use BNC National Bank?  Getting one of my better offers from them via internet...I think from a Zillow form I filled out.

 
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