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I have all the refi paperwork right in front of me and I'm still not sure how much we actually paid in closing costs at the end. That's how much of a mess this all is. If it's any indication, the 3 checks we wrote totaled less than $5500. Other banks like Bethpage CU quoted $7-8k. Staying with the same bank (Wells Fargo) allowed us to save the recording fee as mentioned above.
I have all the refi paperwork right in front of me and I'm still not sure how much we actually paid in closing costs at the end. That's how much of a mess this all is. If it's any indication, the 3 checks we wrote totaled less than $5500. Other banks like Bethpage CU quoted $7-8k. Staying with the same bank (Wells Fargo) allowed us to save the recording fee as mentioned above.
I spoke to my lawyer, with his fee and all the BS it will be closer to 6k. Fortunately we are in a good place financially and have the ability to make a massive principal payment. My lawyer is right, it's cheaper for me to make the principal payment over the refi and my mortgage will now be done in 14.2 years on a 30 and the total interest paid will only be a few thousand more than a 15yr refi. NY makes it challenging with all the damn fees and taxes on these loans.
I spoke to my lawyer, with his fee and all the BS it will be closer to 6k. Fortunately we are in a good place financially and have the ability to make a massive principal payment. My lawyer is right, it's cheaper for me to make the principal payment over the refi and my mortgage will now be done in 14.2 years on a 30 and the total interest paid will only be a few thousand more than a 15yr refi. NY makes it challenging with all the damn fees and taxes on these loans.
I'm in exactly your position and that's exactly what I am doing. Of course, the counterargument is that you could just keep yourself on a 30 year pace and invest the difference and as long as your rate of return exceeds your mortgage interest rate, you are coming out ahead. I think that's a fair argument, but I do both - invest and pay mortgage ahead, and think of it as a form of diversification.
Same reason why I didn't refi. Just not cost efficient when you plug in the numbers in the refi calculator.
Why are you going to dump all that $ into your low interest mortgage rather than into a retirement fund?
In my case its not a fortune that I'm paying ahead; I view it as a guaranteed 3.75% after tax return. It's reasonable from my perspective to devote a little bit of money to this. I'm investing much more money than I'm using to prepay the mortgage. It's also perfectly reasonable to not do this and instead throw it all into the market, as you suggest.
In my case its not a fortune that I'm paying ahead; I view it as a guaranteed 3.75% after tax return. It's reasonable from my perspective to devote a little bit of money to this. I'm investing much more money than I'm using to prepay the mortgage. It's also perfectly reasonable to not do this and instead throw it all into the market, as you suggest.
Depends on Where you are at in the mortgage. I'm only in year 2. I would need to get 8% return factoring capital gains just to break even over 12yrs. My aggressive payoff will save me nearly 90k with no 15% capital gains.
Depends on Where you are at in the mortgage. I'm only in year 2. I would need to get 8% return factoring capital gains just to break even over 12yrs. My aggressive payoff will save me nearly 90k with no 15% capital gains.
Same reason why I didn't refi. Just not cost efficient when you plug in the numbers in the refi calculator.
Why are you going to dump all that $ into your low interest mortgage rather than into a retirement fund?
It's not a huge sum in the grand scheme but after refi and paying extra into principal we will be saving about $25k and hopefully done in 4 years. Feels much better than re-investing it and waiting a couple decades to clear this cloud over our heads. The kind of money we can pocket soon is very enticing. Sooooooooooon. Anyway, we have been doing 401k - I don't know about you, but ROR hasn't been anywhere close to the 8% in previous years...
Do not be fooled by the lure of saving a few $$$ per month during the refinance to fall for their crap. A lot of companies roll the closing cost back into the Mortgage and NY is a very expensive state to write a mortgage so you must consider that before you make the jump.
You can specify that you'll bring the closing costs in cash to the closing.
Of course, the banks would like to ball it all together. It's also tempting to take the money and run. However, if you have the money, pay the closing costs up front.
Though your aggressive payment is admirable, think of how that money might be put to better use. If your home is financed at 4%, could you earn better with that money in a 401K or a Roth? You probably would be better off investing it, especially when you weigh in the tax advantages.
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That's silly
