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Old 04-17-2014, 02:30 PM
 
Location: Mount Laurel
4,182 posts, read 10,131,426 times
Reputation: 3488

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Quote:
Originally Posted by Thinking-man View Post
Ok, i called to confirm things with them....

here are the details:

2.24% for 3 years fixed. 4th year it'll be Prime + 0 but no more than 2 points increase in a year (so...max 4.24% the fourth year)
$300 includes everything. ALL costs. The title company will be local.


I'm trying to Justify NOT doing it....lol





I misspoke....it's not "over 4 years". it's amortized over 10 years.


It doesn't really matter. 10 years amortization versus 30 years is that your min monthly is much higher. In your case, it's not really part of the equation. The bottom line is your plan is to keep this loan for about 18 months. You are going to end up paying about $2500 in interests.
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Old 04-17-2014, 02:33 PM
 
3,937 posts, read 5,359,753 times
Reputation: 2647
Quote:
Originally Posted by Thinking-man View Post
Ok, i called to confirm things with them....

here are the details:

2.24% for 3 years fixed. 4th year it'll be Prime + 0 but no more than 2 points increase in a year (so...max 4.24% the fourth year)
$300 includes everything. ALL costs. The title company will be local.
I misspoke....it's not "over 4 years". it's amortized over 10 years.

I'm trying to Justify NOT doing it....lol
Quote:
Originally Posted by Malloric View Post
Normally I'd say absolutely not, but if it's only going to cost $300 in closing costs and no points, maybe. You'd save $900 or so if your calculations are correct. I didn't check them. That's probably worth it. On the other hand, you have flexibility now. Since my income is variable, I would not do it.

ok....your number is pretty much spot on.....(nice job )
I just did the detailed calculations......

Current path......with the 3.25% rate, i'd be paying 3681 in interest over the life of the loan at the rate we're going......
with the 2.24%, i'd be paying 2512.

Difference: $1168. subtract 300: $868


Cons: hassle. Unknowns. Changing the routine i'm in. If something was to happen to my job, my rate/payment will be higher by about 400.

Pros: $868 bucks saved over a year and half assuming i'm able to pay the same amount (ie. 9200) each month for the next 18 months.


I'm beginning to think/realize this may not be worth it....
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Old 04-17-2014, 02:50 PM
 
Location: Mount Laurel
4,182 posts, read 10,131,426 times
Reputation: 3488
Quote:
Originally Posted by Thinking-man View Post
ok....your number is pretty much spot on.....(nice job )
I just did the detailed calculations......

Current path......with the 3.25% rate, i'd be paying 3681 in interest over the life of the loan at the rate we're going......
with the 2.24%, i'd be paying 2512.

Difference: $1168. subtract 300: $868


Cons: hassle. Unknowns. Changing the routine i'm in. If something was to happen to my job, my rate/payment will be higher by about 400.

Pros: $868 bucks saved over a year and half assuming i'm able to pay the same amount (ie. 9200) each month for the next 18 months.


I'm beginning to think/realize this may not be worth it....
Sorry.. I just don't see how "Current path" amount to only $3681 in interests over the next 18 months. The difference between jumping to the new 2.24% and paying it off in 18 months is much more significant than $900. You don't just compare how much interests you will be paying over the next 18 months @ a rate of 3.25% versus 2.24%

The $3681 in interests would be about right if you were to take out the new loan at 3.25% versus 2.24%

Last edited by sj08054; 04-17-2014 at 02:53 PM.. Reason: correction
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Old 04-17-2014, 03:15 PM
 
Location: N/A
849 posts, read 1,680,467 times
Reputation: 930
Quote:
Originally Posted by sj08054 View Post
Sorry.. I just don't see how "Current path" amount to only $3681 in interests over the next 18 months. The difference between jumping to the new 2.24% and paying it off in 18 months is much more significant than $900. You don't just compare how much interests you will be paying over the next 18 months @ a rate of 3.25% versus 2.24%

The $3681 in interests would be about right if you were to take out the new loan at 3.25% versus 2.24%
I would agree here after I did the math...refinancing would save you over $3k...the difference is currently you are paying an additional $6100/month in principal...on the new loan you would be paying an additional $8k in principal (because the principal on your original was...$317k? and the new loan would be $134k)....maybe this is worth your time.
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Old 04-17-2014, 03:32 PM
 
2,288 posts, read 2,804,910 times
Reputation: 7029
I have no opinion on your question, I just want your job/pay! Good job on paying off the house so early.
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Old 04-18-2014, 08:20 AM
 
3,937 posts, read 5,359,753 times
Reputation: 2647
Quote:
Originally Posted by sj08054 View Post
Sorry.. I just don't see how "Current path" amount to only $3681 in interests over the next 18 months. The difference between jumping to the new 2.24% and paying it off in 18 months is much more significant than $900. You don't just compare how much interests you will be paying over the next 18 months @ a rate of 3.25% versus 2.24%

The $3681 in interests would be about right if you were to take out the new loan at 3.25% versus 2.24%
Quote:
Originally Posted by midwestlaxer View Post
I would agree here after I did the math...refinancing would save you over $3k...the difference is currently you are paying an additional $6100/month in principal...on the new loan you would be paying an additional $8k in principal (because the principal on your original was...$317k? and the new loan would be $134k)....maybe this is worth your time.
Here's how the math works:

With the rate 3.25%, total interest: 3681

balance - interest - principle - taxes - insurance - total payment

1 -- 147,137.16 -- 398.50 -- 8304.78 -- 430.78 -- 65.94 -- 9200
2 -- 138,832.38 -- 376.00 -- 8327.28 -- 430.78 -- 65.94 -- 9200
copy down to month 18



With the rate 2.24%, total interest: 2512


1 -- 147,137.16 -- 274.66 -- 8428.62 -- 430.78 -- 65.94 -- 9200
2 -- 138,708.54 -- 258.92 -- 8444.36 -- 430.78 -- 65.94 -- 9200


notice that i'm assuming i'll pay 9200 each month regardless.....
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Old 04-18-2014, 10:24 AM
 
Location: West Orange, NJ
12,545 posts, read 19,394,685 times
Reputation: 3711
I'm skeptical that you'll only pay $300 in costs. but, if you're 100% certain that all you're paying is $300, then it's a no brainer.


a question though - can you make the minimum payment for the next 3 years if something happened? even better question - could you still pay it off within 1.5 years if something happened?
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Old 04-18-2014, 10:31 AM
 
3,937 posts, read 5,359,753 times
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Quote:
Originally Posted by bradykp View Post
I'm skeptical that you'll only pay $300 in costs. but, if you're 100% certain that all you're paying is $300, then it's a no brainer.


a question though - can you make the minimum payment for the next 3 years if something happened? even better question - could you still pay it off within 1.5 years if something happened?
I was skeptical too....but i double and triple checked with her....what i have NOT done yet is check them online to make sure they're not crooks!!!

the answer to your questions is Yes as we've got decent emergency funds available.
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Old 05-15-2014, 10:58 AM
 
3,491 posts, read 5,317,512 times
Reputation: 5398
Hidden fees. Won't show up til closing. Waste of time.
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Old 05-15-2014, 11:19 AM
 
3,937 posts, read 5,359,753 times
Reputation: 2647
Quote:
Originally Posted by lurtsman View Post
Hidden fees. Won't show up til closing. Waste of time.
you may be right....(although again, i checked with them more than 3 times and they said there's absolutely no other costs that'll show up at closing....)

anyway, long story short, seeing that it would save me a total of 800-900 bucks (assuming the above is true), i decided against it....i'm instead paying extra to have it paid off by the end of the year. the refi would have been sort of pointless...
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