Refinancing existing home

[tvbound]

Recognizing that a larger than normal percentage of TV homes are purchased entirely with cash, I'm sure there are still plenty that although they didn't really need to, financed at least a portion (which we've been contemplating) of their purchase. While the thought of not having a monthly mortgage is very enticing, so is the idea of having a small and easily managed mortgage, while also having a healthy extra 6 figures in the bank.

I'm just curious, given the current low mortgage interest rates, if there are any people who have been thinking of refinancing and maybe taking out some equity built up since purchasing. The idea of even giving a 70 year old a 30 year mortgage is a thread in itself.LOL I can't help but think if there are some who have found their calculations of savings & investments in retirement aren't working out to what they thought they would be (due to higher costs, extended longevity or both), are looking to refinance to make up for it.

I believe I read that most banks aren't doing HELOC's right now, so I'm thinking that refinancing (even with closing and other costs) would be the only way to access cash in the equity built up in the last number of years.

[vintageogauge]

Recognizing that a larger than normal percentage of TV homes are purchased entirely with cash, I'm sure there are still plenty that although they didn't really need to, financed at least a portion (which we've been contemplating) of their purchase. While the thought of not having a monthly mortgage is very enticing, so is the idea of having a small and easily managed mortgage, while also having a healthy extra 6 figures in the bank.

I'm just curious, given the current low mortgage interest rates, if there are any people who have been thinking of refinancing and maybe taking out some equity built up since purchasing. The idea of even giving a 70 year old a 30 year mortgage is a thread in itself.LOL I can't help but think if there are some who have found their calculations of savings & investments in retirement aren't working out to what they thought they would be (due to higher costs, extended longevity or both), are looking to refinance to make up for it.

I believe I read that most banks aren't doing HELOC's right now, so I'm thinking that refinancing (even with closing and other costs) would be the only way to access cash in the equity built up in the last number of years.

I don't know how long you have had your current mortgage but if you re-finance you'll be starting all over paying mostly interest and very little on your principal.

[tvbound]

I don't know how long you have had your current mortgage but if you re-finance you'll be starting all over paying mostly interest and very little on your principal.

Having sold my long-owned home last fall, and yet to purchase in TV, I currently have no mortgage.

As to building equity because of paying mostly interest instead of it going to principal, at this age and stage of life - I'm curious as to why some people think it matters? If someone is determined to maximize what their heirs will receive (ie: increased equity in existing home), maybe then it would be a concern I suppose. That being based on the hope that the house equity outperforms the extra 6 figures a person would have in the bank, that could be invested in a number of ways.

[bagboy]

Everyone has different circumstances and financial needs. Two points, ONE, a borrower cannot be discriminated against when applying for a mortgage due to age. If an 85 year old qualifies financially, they will get a loan. And TWO, there ARE lenders/credit unions that are currently offering home equity lines of credit

[retiredguy123]

Banks have no reason to discriminate against a borrower because of advanced age. They don't expect anyone who gets a mortgage to make 30 years of payments.

[JoMar]

Banks have no reason to discriminate against a borrower because of advanced age. They don't expect anyone who gets a mortgage to make 30 years of payments.

As a few finacial experts have told me, at this age why spend your money when you can spend someone elses. Everything is about cash flow. Now, if I was in my 50's or 60's that might be different.

[manaboutown]

If one has a use for the money why not get a 10 or 15 year mortgage? They are dirt cheap.

[vintageogauge]

Having sold my long-owned home last fall, and yet to purchase in TV, I currently have no mortgage.

As to building equity because of paying mostly interest instead of it going to principal, at this age and stage of life - I'm curious as to why some people think it matters? If someone is determined to maximize what their heirs will receive (ie: increased equity in existing home), maybe then it would be a concern I suppose. That being based on the hope that the house equity outperforms the extra 6 figures a person would have in the bank, that could be invested in a number of ways.

Got confused with the title of your post asking about re-financing existing home vs mortgage.

[tvbound]

Got confused with the title of your post asking about re-financing existing home vs mortgage.

That's why I stated - "financed at least a portion (which we've been contemplating) of their purchase."

[thelegges]

OPM ( other People’s Money). If your investment make more than the current interest rate it’s a win. Your financial advisor should be more help then here

[capecoralbill]

I'm thinking of doing this too, and I'm going to use "Citizens First" Bank, i believe it is owned by the Developer. Then when my house gets swallowed up by a SINKHOLE, I'll just be able to walk away.

[Jayhawk]

I'm thinking of doing this too, and I'm going to use "Citizens First" Bank, i believe it is owned by the Developer. Then when my house gets swallowed up by a SINKHOLE, I'll just be able to walk away.

Keep telling yourself that.

:1rotfl:

[John41]

We looked into refinancing but would have to pay $4000 in closing costs plus all the paperwork. Decided to pass it up.

[gsovas]

I personally took a very large mortgage when I moved here even though I had the moany to pay for this home. I did it for two reasons:1. as we get older, many find it is necessary to do a reverse mortgage because they are running out of cash (this is very costly) 2. It allowed me to have a substantial amount of cash if I wanted to travel, buy a new car or whatever. So using these excuses above, it allowed me to invest the money which allowed me to make between 10 & 25% in the market while my interest rate on the mortgage was only 3.25%. Also as one person said, why do I want to leave the value of this home to someone else when I can be enjoying the money while I am still alive?
So if you can refinance at a very low rate and avoid the big costs by shopping on line, I would do it!




Recognizing that a larger than normal percentage of TV homes are purchased entirely with cash, I'm sure there are still plenty that although they didn't really need to, financed at least a portion (which we've been contemplating) of their purchase. While the thought of not having a monthly mortgage is very enticing, so is the idea of having a small and easily managed mortgage, while also having a healthy extra 6 figures in the bank.

I'm just curious, given the current low mortgage interest rates, if there are any people who have been thinking of refinancing and maybe taking out some equity built up since purchasing. The idea of even giving a 70 year old a 30 year mortgage is a thread in itself.LOL I can't help but think if there are some who have found their calculations of savings & investments in retirement aren't working out to what they thought they would be (due to higher costs, extended longevity or both), are looking to refinance to make up for it.

I believe I read that most banks aren't doing HELOC's right now, so I'm thinking that refinancing (even with closing and other costs) would be the only way to access cash in the equity built up in the last number of years.

[TNLAKEPANDA]

You should look into the Pros and Cons of doing a Reverse Mortgage!

[Marathon Man]

I personally took a very large mortgage when I moved here even though I had the moany to pay for this home. I did it for two reasons:1. as we get older, many find it is necessary to do a reverse mortgage because they are running out of cash (this is very costly) 2. It allowed me to have a substantial amount of cash if I wanted to travel, buy a new car or whatever. So using these excuses above, it allowed me to invest the money which allowed me to make between 10 & 25% in the market while my interest rate on the mortgage was only 3.25%. Also as one person said, why do I want to leave the value of this home to someone else when I can be enjoying the money while I am still alive?
So if you can refinance at a very low rate and avoid the big costs by shopping on line, I would do it!

Agree with all of this. When I retired and moved here, I put down just enough of a down payment to avoid insurance on the loan. 3.3% loan is just too good to pass up.

[Skunky1]

Would you be my financial advisor? Amazing 10 to 25% wow!

[Craig Vernon]

I don't know how long you have had your current mortgage but if you re-finance you'll be starting all over paying mostly interest and very little on your principal.

In my humble opinion age doesn't matter. The lower your overall debt the better for whatever may come your way. Good Luck and Stay Healthy.

[Joeint]

We looked into refinancing but would have to pay $4000 in closing costs plus all the paperwork. Decided to pass it up.

Check with VyStar CU there is no closing cost if you keep the loan for 3 years.

[Juliebythesea]

Some lenders will forgo closing costs
Probably better to talk to a mortgage broker who can explain the options available
A broker will usually have lower costs than walking into a bank

[Jayhawk]

I don't know how long you have had your current mortgage but if you re-finance you'll be starting all over paying mostly interest and very little on your principal.

This is not correct if you refinance the remaining term. In other words, if you have 15 years to go on your current loan, refinance for 15 years and you will immediately be paying more to principal and less to interest.

Any lender who delivers to Fannie Mae can refinance any term. It doesn't have to be a traditional 15 or 30-year debt. It can be any number of years you can qualify for.

As to closing costs, if you save $300 a month and pay $5,000 in closing costs, you will break even after 17 months then be ahead from that point forward.

[Stu from NYC]

I'm thinking of doing this too, and I'm going to use "Citizens First" Bank, i believe it is owned by the Developer. Then when my house gets swallowed up by a SINKHOLE, I'll just be able to walk away.

You would probably need a very large ladder:a040:

[jacRI]

Check out the rates with Fairwinds CU in Leesburg if you are looking to refi. Great rates and easy to work with.

[joseppe]

Would you be my financial advisor? Amazing 10 to 25% wow!

Yep, not that hard to do before COVID, but you gotta know what you're doing or have a good financial advisor.

[charlieo1126@gmail.com]

Your both right , I’ve had 5 new homes in the villages . I’ve never put more then 20% down , with the low interest rates we’ve had for so long it’s a smart thing to do frees up a lot of money to do whatever you want. I got my last mortgage at 78 and I’ll be getting my next one at 82 lol . FYI and I never pay the bond off most buyers don’t care

[merrymini]

Wow, 10 and 25 percent gain in the market? Which market is that?

[rphil11ort]

I bought my house using a reverse mortgage. Put a little less than half down and will never have a principal and interest payment again. Will lose equity every month but have other things to leave.my son. Plus I have the other.half in the bank

[rphil11ort]

I am in the mortgage business and did a mortgage for.a 90 year old man with a 30 year mortgage. Guy was totally with it and the banks can not discriminate.

[bpascani]

I don't know what this HELOC (I think it is you typed) is, but, we just bought our home last Nov, over age 70, and had no problem securing a 30yr fixed. We wanted the "more than necessary down, for lower monthy note" route, as you are considering. We also went with First Citizen (I think it's called...the one here in TV), and got an extra discount on interest at veteran. Also some sort of savings for opening a checking account with them.

[NavyVet]

It all depends on one's individual circumstances. Personally, we liked the peace of mind of not owing anyone anything. We're on our third home here; we did 2 with bridge loans, 1 with traditional 15 year mortgage, paid off all 3 within a year of when previous house sold. Also, we pay off cc balance in full every month, never had a car loan more than 3 years. I guess we just really hate paying interest. For us, living debt free and finally not worrying about money all the time is a comforting feeling. We have what we need.
Have always followed basic principles of budgeting, saving/investing:
Pay yourself first.
Live beneath your means.
Dollar cost averaging.
Don't take on more than you can afford.

[Stu from NYC]

It all depends on one's individual circumstances. Personally, we liked the peace of mind of not owing anyone anything. We're on our third home here; we did 2 with bridge loans, 1 with traditional 15 year mortgage, paid off all 3 within a year of when previous house sold. Also, we pay off cc balance in full every month, never had a car loan more than 3 years. I guess we just really hate paying interest. For us, living debt free and finally not worrying about money all the time is a comforting feeling. We have what we need.
Have always followed basic principles of budgeting, saving/investing:
Pay yourself first.
Live beneath your means.
Dollar cost averaging.
Don't take on more than you can afford.

Agree 100%

[tvbound]

I don't know what this HELOC (I think it is you typed) is, but, we just bought our home last Nov, over age 70, and had no problem securing a 30yr fixed. We wanted the "more than necessary down, for lower monthy note" route, as you are considering. We also went with First Citizen (I think it's called...the one here in TV), and got an extra discount on interest at veteran. Also some sort of savings for opening a checking account with them.
HELOC = Home Equity Line Of Credit

What is a Home Equity Line of Credit and How Does it Work? (https://www.bankofamerica.com/mortgage/learn/what-is-a-home-equity-line-of-credit/)

[dewilson58]

It all depends on one's individual circumstances. Personally, we liked the peace of mind of not owing anyone anything. We're on our third home here; we did 2 with bridge loans, 1 with traditional 15 year mortgage, paid off all 3 within a year of when previous house sold. Also, we pay off cc balance in full every month, never had a car loan more than 3 years. I guess we just really hate paying interest. For us, living debt free and finally not worrying about money all the time is a comforting feeling. We have what we need.
Have always followed basic principles of budgeting, saving/investing:
Pay yourself first.
Live beneath your means.
Dollar cost averaging.
Don't take on more than you can afford.


Thank you for your service.
Thank you for your post.
:bigbow:

[joseppe]

Wow, 10 and 25 percent gain in the market? Which market is that?

This is from Barrons ....

The Dow Jones Industrial Average has risen 23% in 2019 after gaining 190.17 points, or 0.7%, to 28,645.26, this past week, while the S&P 500 index has gained 29% after rising 0.6%, to 3240.02, and the Nasdaq Composite has climbed 36% after finishing the week up 0.9%, at 9006.62.Dec 27, 2019

That is the STOCK MARKET, WALL STREET of course. Not your local grocery store.

[tvbound]

This is from Barrons ....

The Dow Jones Industrial Average has risen 23% in 2019 after gaining 190.17 points, or 0.7%, to 28,645.26, this past week, while the S&P 500 index has gained 29% after rising 0.6%, to 3240.02, and the Nasdaq Composite has climbed 36% after finishing the week up 0.9%, at 9006.62.Dec 27, 2019

That is the STOCK MARKET, WALL STREET of course. Not your local grocery store.

"The Dow Jones Industrial Average has risen 23% in 2019 after gaining 190.17 points, or 0.7%, to 28,645.26, this past week"




When was that written? Right now, the Dow is hovering around 24,500.
Cherry picking any two specific days, one could make the DOW look like it was up (or down) 50%.

[biker1]

How about calendar 2019? Here are the popular indices.

https://image.cnbcfm.com/api/v1/image/106315858-157782659923620191231_mkt_close_stock_market_perfo rmance_sp500_djia_nasdaq.png?v=1577826720&w=740&h=416

"The Dow Jones Industrial Average has risen 23% in 2019 after gaining 190.17 points, or 0.7%, to 28,645.26, this past week"




When was that written? Right now, the Dow is hovering around 24,500.
Cherry picking any two specific days, one could make the DOW look like it was up (or down) 50%.

[Challenger]

OPM ( other People’s Money). If your investment make more than the current interest rate it’s a win. Your financial advisor should be more help then here

True , but risk factor on the investment is a critical part of the decision process, also. Consider the costs associated with a new mortgage. They amount to a reduction of the balance received and can affect the cost calculation of the funds received.

[Kim Fowler]

We looked into refinancing but would have to pay $4000 in closing costs plus all the paperwork. Decided to pass it up.
Shop around with lenders not just for the new interest rate but also for closing costs. Also, some lenders let you roll the closing costs into the new mortgage, so you have no out-of-pocket costs. This plan of course means your new mortgage is a little higher than your old one, but with the extremely low rates available now, it’s still easily worth it to refinance with costs rolled in. Have a couple lenders run numbers for you.

[Buffalo Jim]

Recognizing that a larger than normal percentage of TV homes are purchased entirely with cash, I'm sure there are still plenty that although they didn't really need to, financed at least a portion (which we've been contemplating) of their purchase. While the thought of not having a monthly mortgage is very enticing, so is the idea of having a small and easily managed mortgage, while also having a healthy extra 6 figures in the bank.

I'm just curious, given the current low mortgage interest rates, if there are any people who have been thinking of refinancing and maybe taking out some equity built up since purchasing. The idea of even giving a 70 year old a 30 year mortgage is a thread in itself.LOL I can't help but think if there are some who have found their calculations of savings & investments in retirement aren't working out to what they thought they would be (due to higher costs, extended longevity or both), are looking to refinance to make up for it.

I believe I read that most banks aren't doing HELOC's right now, so I'm thinking that refinancing (even with closing and other costs) would be the only way to access cash in the equity built up in the last number of years.

For what it may be worth as a point of information : The average duration of a 30 year home mortgage has historically been about 7 years . This is why mortgage loans are priced off the 10 year Treasury .

[graciegirl]

I'm thinking of doing this too, and I'm going to use "Citizens First" Bank, i believe it is owned by the Developer. Then when my house gets swallowed up by a SINKHOLE, I'll just be able to walk away.

Just like hurricanes and earthquakes and lightning strikes, we can't blame the developer for everything. The Boy Scouts motto is good here; Be Prepared. Save your money or get insurance.

[Stu from NYC]

I'm thinking of doing this too, and I'm going to use "Citizens First" Bank, i believe it is owned by the Developer. Then when my house gets swallowed up by a SINKHOLE, I'll just be able to walk away.

Now that it is harder to itemize on tax return mortgages are not so good to have.

[JoMar]

In my humble opinion age doesn't matter. The lower your overall debt the better for whatever may come your way. Good Luck and Stay Healthy.

Actually I disagree, the older you are the less you chance of having a mortgage for 30 years. Assuming your investments return more than the interest rate the amount you pay out will be significantly less if you die within the 30 years plus the profit on the property when your kids sell it. If you're in your 50's maybe a different calculation but mid 60's and older, the financial position will be strongly in your favor.

[tvbound]

Actually I disagree, the older you are the less you chance of having a mortgage for 30 years. Assuming your investments return more than the interest rate the amount you pay out will be significantly less if you die within the 30 years plus the profit on the property when your kids sell it. If you're in your 50's maybe a different calculation but mid 60's and older, the financial position will be strongly in your favor.Agreed.

Although the market swings have been pretty volatile of late and investment returns for years may not even surpass the really low interest rates of mortgages right now, I agree it's much nicer to have the substantially extra cash in the bank from not paying all cash and just have a partial mortgage instead.

Even with a minimum return on investment income, it will take more years than we probably have left for the cash saved to even come close to being equal to paying an $800-$1,000 a month mortgage payment. And even a modest increase in housing prices in the next 15-20 years, will most likely still leave the kids with lots of equity.

[petsetc]

On Monday (6/29) I actually did this drill.

When I purchased in TV in March, 2015, I put 20% down and got a 30 yr mortgage at 3.875% through Citizens First. I have not made any additional principal payments.

Several weeks ago I received an unsolicited mailing from Valley View Home Loans offering to refinance my mortgage pointing out that with historical lower rates, now could be the time. The letter had some fairly accurate info concerning my existing mortgage (they got fm public records), so I googled them for legitimacy, called them and talked.

I told them it was a second/vacation home, that my loan to value was about 57% (don't you love the appreciation), and I was only interested in lower rate, low closing costs rolled in and a lower payment. After normal discussion, the man I spoke with said based on the LTV, I would not need to pay for an appraisal and closing costs would run about $2,000. That he thought I could get 3% which would change my payments from $1,028 to $834, a decrease of $194/month-a payback time of less than a year. Taxes and insurance would not be escrow-ed.

My only hesitation is what's going to happen with Covid-19 - will I ever return!!!