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Posts by idfnl

I know a guy that recently emigrated here from sw Europe. He said it used to be that mortgages didn't really exist, you waited until you had the cash saved. Mortgages became easy in his country, and everyone who has one is in the shit as mortgages caused a bubble.If you're trying to be logical, the approach would be to seek the lowest cost of living possible while saving money at the highest possible return.Many would end up in you're parents basement while saving money...
A CD at 1.5% will never net you as much as you'd get prepaying on a 4% mortgage.1m at 4% = $3333 in interest. You pay that down by $1000 and you've saved $4 in interest. A CD would net you $1.50, whose compounding is less than the carryforward in interest savings over time.It comes down to government intervention making the bad math above palatable with tax deductions. In any event, there is an inflection point where the paydown overrides the tax savings.If your...
I'm not aware of any interest bearing cds that pay more or even equal to the interest savings you'd get paying the mortgage down.I'm a bit surprised at the lack of enthusiasm at ending a mortgage early. I don't understand why that amounts to nothing. Interest saved is equivalent to interest/income earned in another way. Why anyone wants the liability associated with a mortgage 1 day more than needed is beyond me.
If liquidity is a concern then you're probably extending yourself unnecessarily. Too many people buy more house than they can really afford. There's a risk to owing money on a home, anything can happen to you so it's better to have the property in your name outright asp -way before trying to make it work better for you in an investment account.
It's clear you can spend slightly less month to month + extra principle and get the same result of a 14 yr payoff. My opinion is based on my 'why bother' threshold, and I just don't think it's worth the trouble, but that's related to what I pay monthly. To contextualize it better, to me it represents a savings of about 2.5%, just not enough. If that 1k meant 8%, that would be different.
From that perspective then the terms of the refi are also variables. IMO, it's just not worth the bother over a measly $1k a year so I made a suggestion that would have the same net effect.
Indeed, but the same net effect can be had in a shorter time span by just paying a little extra into the mortgage.
15 years or less is where to be, good work there. To save $1000 per year is minimal, paying into the mortgage a few extra bucks would net you that without the hassle and without adding another year of payments to the mix.Don't think that's the case, from what I read he's at 14 years and would reset to 15 again. Not a fan of that, anything can happen in your life and getting out from under a bank should be the priority.
Do you really save though? I have never really sat down to calculate it, but in my gut I wonder how is it savings when you start over at the year 30 countdown whereas you were in year 22 and had amortized down to the point that you were starting to build up principal payments. Now you are back to mostly interest + some principal..75 is a significant adjustment, but I also question the logic when it costs 3-8k to refinance, it will take quite a while to pay that back, and...
After about a year under water, my BABA shares are finally positive.
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