New mortgage at 45?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Can you put chunks of money toward paying it down? We can do that on ours for $150 to "reset" our mortgage each time. Same rate, only with less owed. It significantly reduces the interest paid over the life of the loan. We hope to pay it off completely in a few years.

Are you just paying an extra $150 each month? What do you mean by paying $150 to “reset” each time?

I think the PP meant to say they are recasting their mortgage, which keeps the same term and interest rate, but recalculates the monthly payment after they make a lump sum payment.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Can you put chunks of money toward paying it down? We can do that on ours for $150 to "reset" our mortgage each time. Same rate, only with less owed. It significantly reduces the interest paid over the life of the loan. We hope to pay it off completely in a few years.

Are you just paying an extra $150 each month? What do you mean by paying $150 to “reset” each time?

I think the PP meant to say they are recasting their mortgage, which keeps the same term and interest rate, but recalculates the monthly payment after they make a lump sum payment.

Recasting just keeps the mortgage just as long. Just lowers monthly payment

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Take out a 30Y and pay down extra principal every month (akin to a 20Y loan).

This gives you extra breathing room in case you ever need to pay the minimum due to job loss, a serious illness, etc. Plus you'll reduce your lifetime interest expense at these awful rates.

Good lord. Lemme guess, you're younger than 40?

Huh? I'm not the PP, but I've also heard and read this same advice from multiple sources and it makes logical sense. Get the 30, pay extra on the principal with each payment.

Sorry - I meant to bold "awful interest rates" - anyone who thinks these rates are "awful" has limited experience/historical perspective.

Not really, well aware they were very high awhile ago, but the relative cost of the home itself was also much cheaper and inventory was greater. Until housing prices fall substantially to help balance out the hit people are taking to own a home at these prices, yes, the interest rates are "awful"

[Anonymous]

i would take a mortgage out if i was 99. who cares?

If the rate is right, it's the best leverage you can make...assuming you have ample assets.

My kids will sell it and take the equity.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Take out a 30Y and pay down extra principal every month (akin to a 20Y loan).

This gives you extra breathing room in case you ever need to pay the minimum due to job loss, a serious illness, etc. Plus you'll reduce your lifetime interest expense at these awful rates.

Good lord. Lemme guess, you're younger than 40?

Huh? I'm not the PP, but I've also heard and read this same advice from multiple sources and it makes logical sense. Get the 30, pay extra on the principal with each payment.

Sorry - I meant to bold "awful interest rates" - anyone who thinks these rates are "awful" has limited experience/historical perspective.

Classic boomer phrase. Yes, rates were substantially higher in the 70s, but the cost of ownership is multiples (inflation adjusted) of what it was, even with rates 2x.

Rates aren't everything. So to the PP, I apologize on behalf of all boomers who are too stubborn to realize that even with their higher rates, their financial lives were the easiest in generations.

[Anonymous]

My grand aunt after retirement bought several investment properties in her 50s and early 70s. She died recently at 104 and all paid off.

Most amazing of all the house she was born in she inherited and kept as a vacation home. Her parents built that home in 1879. She left it to a grandchild. Even if her parents took out a 30 year mortgage in 1879 it was paid off by 1909.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Can you put chunks of money toward paying it down? We can do that on ours for $150 to "reset" our mortgage each time. Same rate, only with less owed. It significantly reduces the interest paid over the life of the loan. We hope to pay it off completely in a few years.

Are you just paying an extra $150 each month? What do you mean by paying $150 to “reset” each time?

I think the PP meant to say they are recasting their mortgage, which keeps the same term and interest rate, but recalculates the monthly payment after they make a lump sum payment.

Recasting just keeps the mortgage just as long. Just lowers monthly payment

Exactly. It’s a great option if one is able. It can be financially wiser (think various deductions)to keep a mortgage vice fully paying off, and this allows you to get the mortgage monthly lowered to a viable monthly in retirement.

Also, it’s more common now that people cannot afford SFH till in their 40s. Not abnormal at all to get a mortgage then.

[Anonymous]

Isn't it pretty common for people to trade up to a better house in their forties? Or just to move for whatever reason?

[Anonymous]

Anonymous wrote:Isn't it pretty common for people to trade up to a better house in their forties? Or just to move for whatever reason?

Yes you’re right. For some reason it stresses me out. It’s a second home and if need be, I could just rent it out, either full time or on Airbnb. But it’s quite a risk and it’s not cheap given current rates. It would make finances tight for a while. Maybe they won’t accept my offer anyway, who knows and I could find something cheaper next spring or summer.