Help me decide what Refinance option to go with.

[JayB]

Personally, do not get caught up in the rate..it is minimal difference...do you lay out the extra $14K in closing cost now or do you pay it back in the term of the loan? That is your real choice.

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[kae006]

Personally, do not get caught up in the rate..it is minimal difference...do you lay out the extra $14K in closing cost now or do you pay it back in the term of the loan? That is your real choice.

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What do you consider minimal? 0.375% over 12-15 years on a 612k loan is not my definition of minimal.

[Mitchell8]

Go with 15yr loan have it paid off when you move for only 1k more a month lower closing cost and interest rate. Run the numbers you’ll be surprised

[Throwin Darts]

No way in hades would I be paying the $14k in closing costs. Option b all day long

[kae006]

No way in hades would I be paying the $14k in closing costs. Option b all day long

$14k probably isn’t that unreasonable for a $612k loan but why would you go with option b if option a saves more money in the end?


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[g2outfitter]

Guess this is my biggest dilemma as if I go with option B and have 11k more money up front and comparing option A&B in year 12 on loan balance and there is only a $7358 Difference. Am I really saving money with option A because I still have my original 11k. I may be completely off base though.

Option A 12 yr Balance $427,765
Option B 12 yr Balance $ 435,123

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[Throwin Darts]

$14k probably isn’t that unreasonable for a $612k loan but why would you go with option b if option a saves more money in the end?


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I’m a banker. Buying down a rate through fees is just prepaid interest. He’s got plans for these funds. I’d take the extra proceeds in my pocket at 3.25% and use that to either save myself money somewhere else or to earn money on it vs giving it to the lender.

You also have to put some kind of return or cost savings generated by the additional proceeds in your equation vs saying one rate is lower than the other so always take the lower even if it means paying a ton of fees

[ridoskon]

Hey, some excellent suggestions on here! It's great to have some knowledgeable people who can always provide you with some valuable pieces of advice. What decision did you take in the end? I've spent the last couple of years thinking about a mortgage, but I have to spend some more time researching before making a final decision. A friend of mine who lives in the UK took a different path, asking for assistance from Mortgage Broker Leeds. Seeing how happy he is with his decision, I'm seriously considering this option myself. What's your opinion, guys? Cheers.

[gingib]

I would do 0 of those and not even think about it!

Pulling money outta a house is flat out stupid. You paid interest on that and will pay more interest on it again and start over on a higher amount

[BlackoutRam2500]

Option B all day long. #1 you are improving your property, an appreciative asset, and the improvements you can make with the extra $12k will outweigh the interest over time. Same with the coastal investment.

If you were pulling money out for a vacation, Range Rover or new boat I would say, "don't do it... or at least do option A". Lol

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[Gclyde28]

I would do 0 of those and not even think about it!

Pulling money outta a house is flat out stupid. You paid interest on that and will pay more interest on it again and start over on a higher amount

Most all of our clients (who all have wayyyyyy more money that I do) carry a mortgage when they could all easily pay cash for their homes. Why? because with how low interest rates are they want to keep their money to work for them instead of paying off a low interest debt. If the OP wants to further invest into his properties and another, I can't say I blame him at all, property rates are rising at way faster than 3.375 or whatever percent his new loan will be.

[EastTexasMan]

I would do 0 of those and not even think about it!

Pulling money outta a house is flat out stupid. You paid interest on that and will pay more interest on it again and start over on a higher amount

Not necessarily... I pulled out $70K on my house this year and took my rate from 4.125% down to 3.875%, however, I took that $70k and loan it out hard money at 12% with 2% origination fee real estate loans on 6 month notes... So I'm making money on a low interest loan from the bank.

I'll be selling this house in a year or two, paid no points (took higher rate of 3.875% so I have little to no closing costs)

[kae006]

Not necessarily... I pulled out $70K on my house this year and took my rate from 4.125% down to 3.875%, however, I took that $70k and loan it out hard money at 12% with 2% origination fee real estate loans on 6 month notes... So I'm making money on a low interest loan from the bank.

I'll be selling this house in a year or two, paid no points (took higher rate of 3.875% so I have little to no closing costs)

How would someone go about finding opportunities to loan hard money? Is it exempt from usury laws? I thought 10% interest was the maximum for Texas.

[warrington]

investments

Guess this is my biggest dilemma as if I go with option B and have 11k more money up front and comparing option A&B in year 12 on loan balance and there is only a $7358 Difference. Am I really saving money with option A because I still have my original 11k. I may be completely off base though.

Option A 12 yr Balance $427,765
Option B 12 yr Balance $ 435,123

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If you take into account the 14K that you could invest. If that made 5%+ a year, that would make the difference a little different

[gingib]

Most all of our clients (who all have wayyyyyy more money that I do) carry a mortgage when they could all easily pay cash for their homes. Why? because with how low interest rates are they want to keep their money to work for them instead of paying off a low interest debt. If the OP wants to further invest into his properties and another, I can't say I blame him at all, property rates are rising at way faster than 3.375 or whatever percent his new loan will be.

Yes! Should be able to clear 10-12% annually on investments so that makes sense to carry a 3.5% interest on your home since it appreciates.

But he is pulling out this money he already paid high interest on to improve his current property from the sounds of it