Talking stocks, trading, and investing in general

[Piobaire]

LOL. Market up a % this morning, Twittler strikes, market down a %.

 

[RedLantern]

Not to mention people think of property as a fairly liquid investment.

The problem lies in that it's least liquid exactly when you will probably need liquidity!

 

[Piobaire]

Got my monthly interest payment from CIT Bank. Yup, not paying 2.45% anymore.

 

[jbarwick]

That 30-yr mortgage rate is getting closer to my 15-yr rate...

 

[patrickBOOTH]

I could probably do the math, but I'll just ask. Does it make sense to refinance to a 15 year mortgage 15 years into your 30 year mortgage? That would front load the interest (for those of us where it still makes sense).

 

[Piobaire]

I could probably do the math, but I'll just ask. Does it make sense to refinance to a 15 year mortgage 15 years into your 30 year mortgage? That would front load the interest (for those of us where it still makes sense).

How does it front load the interest? If that 30 year has the same interest as the 15 year your interest portion will be the exact same number that first month. In fact, if I'm thinking about this correctly, the interest portion would be smaller the second month in the 15 year because the payment will be higher and you're eroding the amount borrowed faster. Maybe @otc can comment?

 

[otc]

Yes, exactly the same...I just checked some numbers.

If you had a 4% 30-year loan of $300k, at the end of year 15, you would have $194k in principal outstanding.

The final 15 years of payments would look identical in the principal/interest split as a new 15-year loan at 4% of $194k. Interest is 45% of your first payment in year 16 either way (645 on a payment of 1432)

Now, if you could get a lower rate on that 15 year loan, it might be worth the costs of refinancing. If the 15 year is 3.5%, your payment will drop to 1384 and you'll pay about 10k less over the life of the loan.

If you instead refinance into a new 30-year loan, you'll increase the interest-share. Lets say the new loan is exactly the same at 4%...just adding another 15 years of payments. Now the interest will still be $645, but that will be 70% of your payment because your payment has dropped from 1432 to 924 (but you have to pay it for twice as long).

 

[patrickBOOTH]

Yeah, that all makes sense.

 

[brokencycle]

You guys should have bought into my triple leverage VIX fund...

 

[jbarwick]

We would refi for the optionality of paying the lower payment if cash is needed though you guys mentioned a HELOC could be the cheaper option at something <$100 per year.

 

[Piobaire]

LOL @ self-leveragers

 

[brokencycle]

We would refi for the optionality of paying the lower payment if cash is needed though you guys mentioned a HELOC could be the cheaper option at something <$100 per year.

Mine was $50 to open and no annual maintenance fee or anything. That being said, the interest rate is a fair amount higher than the mortgage.

 

[ThinkDerm]

what are the interest rates out there now on 30year fixed?

 

[imatlas]

LMGTFY

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[Piobaire]

what are the interest rates out there now on 30year fixed?

With a maximum LTV of 40%, and some other stringent underwriting requirements, I will give you a private 15 or 30 year for 18.27%.