jk70
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Post by jk70 on Mar 21, 2011 9:21:35 GMT -5
...into the mortgage in order to keep cash? I am not talking about paying points (avoiding that). I have ~2,500 in total closing costs I could roll or just pay.
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Deleted
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Post by Deleted on Mar 21, 2011 9:32:34 GMT -5
Always! ;D
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Nazgul Girl
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Post by Nazgul Girl on Mar 21, 2011 9:41:46 GMT -5
I've done both. It depends on how much cash we want to be out-of-pocket at any given time, and how long we plan to keep the mortgage. Usually we just pay them.
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phil5185
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Post by phil5185 on Mar 21, 2011 10:13:02 GMT -5
Always. When I refi one of our houses, my intent is to raise inexpensive long term capital to use for other investing. So I retain the use of whatever cash that I can. (In my world, today's $2500 equates to $57,000 in 2041.)
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lynnerself
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Post by lynnerself on Mar 21, 2011 10:40:34 GMT -5
Last time we did. Interest rates were very low and we needed the cash for other things. We ended up with no out of pocket expenses.
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Nazgul Girl
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Post by Nazgul Girl on Mar 21, 2011 10:41:43 GMT -5
That's an excellent way to look at closing costs, Phil. Thank you for clarifying my thinking on that. I will always roll mine in the future ( not that I want to have any, or many, more mortages ).
We are still working on finding a second rental but have to wait for the federal case that the ex-attorney nutbag brought against my husband for the umpteenth time to be resolved. We're getting close, though.
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jk70
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Post by jk70 on Mar 23, 2011 10:10:02 GMT -5
so Phil: I understand your point so if that's the case do you pay points. get even a lower rate but roll the points and closing costs into the loan? I could pay $10k to get 4.25% right now and roll it. would you? or others?
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phil5185
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Post by phil5185 on Mar 23, 2011 10:41:24 GMT -5
do you pay points. get even a lower rate but roll the points and closing costs into the loan? No, I don't buy points. 'Points' are actually a way of prepaying the extra interest that you are avoiding. So you are prepaying the interest on capital that you don't get the use of. Just like rolling the closing costs, I hang on to my capital and invest it elsewhere. Points are mostly a marketing tool to make loans more appealing and give choices to the clients - few clients do the math, they look at the rates and are happy to pay $X000 to get 4.75% instead of 5%. And that's OK, if they don't invest that 'saved' cash, the outcomes are mathematically the same. It's kinda like car dealers - you can choose either a $1000 cash back or 0% financing - they are mathematically the same but most customers feel strongly about one - so it is important to the Dealer to provide the choice. |
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