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Post by Deleted on Jul 23, 2020 7:35:33 GMT -5
Ha! Last night I was looking at the numbers... 94K - Mortgage balance 63K - Roth Contributions 12K - Child support buffer 15K - Money from mom (if I took it) 90K Close...so very, very close.
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gs11rmb
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Post by gs11rmb on Jul 23, 2020 7:46:46 GMT -5
Ha! Last night I was looking at the numbers... 94K - Mortgage balance 63K - Roth Contributions 12K - Child support buffer 15K - Money from mom (if I took it) 90K Close...so very, very close. To probably everyone else I'd say don't touch the Roth but you might be the rare exception! The mortgage causes you a great deal of stress so perhaps you should take the money and pay off the house. I know you're disciplined enough that you wouldn't fritter away the regular payment but would fully fund your Roth for this year and start stashing the rest in a taxable account. It's the wrong thing to do mathematically but it might be the right thing to do for your peace of mind. It's not your only retirement money.
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Post by Deleted on Jul 23, 2020 7:56:56 GMT -5
Except I really wouldn't have any extra money to invest. Most of the loss of the mortgage payment would be offset by the reduced income.
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Post by Deleted on Jul 23, 2020 8:34:02 GMT -5
FWIW, I know I'm being very difficult. I haven't been functioning right for a while now and decisions are really hard for some reason. Paralysis of Analysis is my life lately. Probably why I got such a shitty raise this year too. Oh great...now I need to factor in possible job loss.
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Lizard Queen
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Post by Lizard Queen on Jul 23, 2020 8:39:08 GMT -5
You know, a mortgage is a lot less stressful when it's small. Just sayin'
And I hear you on the analysis paralysis. I have to choose where to get/who to install our countertops, and I just can't pull the trigger. Normally, I'd just go with the cheapest place--its all the same kind of granite, but then you have quality of work. I just don't know! 😣
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pulmonarymd
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Post by pulmonarymd on Jul 23, 2020 8:40:58 GMT -5
FWIW, I know I'm being very difficult. I haven't been functioning right for a while now and decisions are really hard for some reason. Paralysis of Analysis is my life lately. Probably why I got such a shitty raise this year too. Oh great...now I need to factor in possible job loss. Emotionally, paying the mortgage may feel right. I know in medicine, the decision that feels right emotionally is often wrong if you take emotion out of the mix. Using a Roth to pay off a mortgage is rarely the right thing to do, and for your long term future, is not a smart move. But again, the only person who can make the decision is you
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Wisconsin Beth
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Post by Wisconsin Beth on Jul 23, 2020 8:41:29 GMT -5
You know, a mortgage is a lot less stressful when it's small. Just sayin' And I hear you on the analysis paralysis. I have to choose where to get/who to install our countertops, and I just can't pull the trigger. Normally, I'd just go with the cheapest place--its all the same kind of granite, but then you have quality of work. I just don't know! 😣 If you lived closer, I'd say you need to go with the company that hired my nephew as an apprentice counter installer! lol.
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Post by Deleted on Jul 23, 2020 8:42:26 GMT -5
You know, a mortgage is a lot less stressful when it's small. Just sayin' And I hear you on the analysis paralysis. I have to choose where to get/who to install our countertops, and I just can't pull the trigger. Normally, I'd just go with the cheapest place--its all the same kind of granite, but then you have quality of work. I just don't know! 😣 Oh God. Maybe my issue isn't recent because I just got flashbacks to building this house 20 years ago and dealing with those kinds of decisions. LOL
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Post by Deleted on Jul 23, 2020 10:08:09 GMT -5
Credit union just emailed me with better estimates of the closing costs. He said he'd hopefully get an appraisal waiver. I still don't like it much.. I also don't know why he has escrow info in there. I said I didn't want to escrow.
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Post by Deleted on Jul 23, 2020 10:09:36 GMT -5
And the committee sucks! One wants it paid off, one says the 15 and one says always go 30 and pay extra.
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Wisconsin Beth
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Post by Wisconsin Beth on Jul 23, 2020 10:30:45 GMT -5
And the committee sucks! One wants it paid off, one says the 15 and one says always go 30 and pay extra. Well, it IS a committee...
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phil5185
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Post by phil5185 on Jul 23, 2020 13:11:54 GMT -5
""Except I really wouldn't have any extra money to invest. Most of the loss of the mortgage payment would be offset by the reduced income.""
A couple things - someone said that a 'paid-for' house is 'safe'. But money is finite, if you spend an extra $1000/m to prepay a loan, that money is gone, spent. So if you lose your job, you don't have money to buy food, gas, look for work, a major emergency. But if you had kept that $100k you could make $1000/m payments for 100 months, buy gas, eat - ie, no emergency. And don't forget - $321/m of that $971/m payment stays the same regardless of the loan size (even after the loan is paid-off).
The loan specs look good - but I would double the $98k loan, and roll in the $2713 cost, and go with 30 yrs - (the $650/m would increase to about $822/m). The extra $100,000 gives you working capital for investing - or anything else that you may need over the next 30 years.
When I periodically refi'd our 4 rental houses, I always borrowed the max amount, you spend $2713 for a refi, you don't want to need to refi again. Better to retain control of the extra $100k.
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Post by Deleted on Jul 23, 2020 13:39:48 GMT -5
And don't forget - $321/m of that $971/m payment stays the same regardless of the loan size (even after the loan is paid-off). I never escrow. I don't know why he put that in there. I asked him not to.
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debthaven
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Post by debthaven on Jul 23, 2020 13:42:25 GMT -5
And the committee sucks! One wants it paid off, one says the 15 and one says always go 30 and pay extra.
I understand that your mom is the one who wants it paid off, but due to ex2, there ARE potential variables.
Do you think you could get your mom to give you the 15K, AND agree to either the cheap 10Y refi or the more expensive 15Y refi (personally I'd give her the choice, if she would still gift the 15K)?
You have VERY valid arguments ... Even if Ex2 has been stable in recent years, he IS a wild card. And even if it's highly unlikely, any of those scenarios COULD happen.
I'd present it in those terms.
OR!!! Other solution:
Tell her you accept her gift and you won't refi, BUT you reserve the right to refi in future if Ex 2 goes off the rails, without having to reimburse her.
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debthaven
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Post by debthaven on Jul 23, 2020 13:55:13 GMT -5
OTHER other thought. I think I already know the answer, but better safe than sorry.
You mentioned your aunt wanting to downsize. I'm guessing her farm is bigger than yours. But if ever it's not, could that be an option? Or could they divide it so that you could buy something slightly smalller?
Just a thought. :-)
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Post by Deleted on Jul 23, 2020 14:25:20 GMT -5
Tell her you accept her gift and you won't refi, BUT you reserve the right to refi in future if Ex 2 goes off the rails, without having to reimburse her. Well, she's as all over the map as me. She's come full circle and the committee has reached a unanimous decision that the 30 year is probably best. She apparently wasn't aware how tight my budget was until I laid it out there for her. But, she also gets why I want it gone (she paid off her 30 in 9 years), and she can see where only having to make it until January of 2023 would be very tempting. So, now she's saying she'll give me the money no matter what I decide to do and even threw in there that if I got into trouble she could give me an advance on my inheritance and have it subtracted from final estate in the will. I swear I don't know this woman anymore. She must be getting dementia.
So, now I'm back to...
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debthaven
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Post by debthaven on Jul 23, 2020 15:15:35 GMT -5
Then I'd do the cheap 10Y refi, and take the money!!!
KUDOS to your mom for finally being more flexible!!!
ETA: I think The Committee needs either cake, or beer, or a dinner invitation, or all of the above! But definitely SOMETHING!
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finnime
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Post by finnime on Jul 24, 2020 10:28:32 GMT -5
Good for you, minnesotapaintlady. The 30 year does give you the most flexibility. You can always prepay, and this way you're insulated from the storms that Ex 2.0 may ride. I know it's scary. You've done a remarkable job and have my utmost respect for what you've been able to do to date. Whatever you choose will go well.
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Post by Deleted on Jul 24, 2020 10:42:01 GMT -5
The thing that is killing me are those damn closing costs. I'm not going to do it because it defeats what I'm trying to do, but I understand why Phil says borrow as much as you can. If the closing costs are $2700, that's an additional 2.75% on the cost of the loan. That's really mentally tripping me up right now.
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pulmonarymd
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Post by pulmonarymd on Jul 24, 2020 11:05:56 GMT -5
The thing that is killing me are those damn closing costs. I'm not going to do it because it defeats what I'm trying to do, but I understand why Phil says borrow as much as you can. If the closing costs are $2700, that's an additional 2.75% on the cost of the loan. That's really mentally tripping me up right now. Think of it as insurance in case Murphy rears his ugly head
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Post by Deleted on Jul 24, 2020 11:55:50 GMT -5
Welp. I emailed "my guy" and told him to start the 30 year at 2.725% I took my 2012 mortgage amortization spreadsheet and put it side by side with the proposed 30 year but with paying the current mortgage payment and came up with this
Current loan - Payoff 3/1/2027. Interest $9587 Proposed with paying current - Payoff 7/1/2027. Interest $9538 And that's with the proposed loan being 98K to start and I don't think it will be that high as I'll only have a 93K payoff after next Saturday but he used the 95K that was in my credit report. I'm not 100% doing a happy dance here, because of the huge psychological blow of going to a 30, even if I'm planning on paying it the same, it's still giving me permission to slack and I don't like that part.
But, decision. MADE. Now I can finally shift my focus to other things!
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Blonde Granny
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Post by Blonde Granny on Jul 24, 2020 12:16:22 GMT -5
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finnime
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Post by finnime on Jul 24, 2020 12:23:53 GMT -5
You done good, MPL.
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gs11rmb
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Post by gs11rmb on Jul 24, 2020 12:32:10 GMT -5
I think it's a great decision! More than anyone you know that 'shit happens'. This gives you a serious buffer if 2.0 goes off the rails. If he doesn't it took you an extra four months to pay everything off - no big deal in the great scheme of things.
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Rukh O'Rorke
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Post by Rukh O'Rorke on Jul 24, 2020 13:42:12 GMT -5
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Post by Deleted on Jul 24, 2020 15:43:43 GMT -5
Got the appraisal waived! He also said they were swamped with refinances and it could be as much as 60 days to close, but I don't care about that.
eta: Forgot to add, he also managed to get me a lower rate than the 2.850 he originally quoted. It's 2.725
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Ava
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Post by Ava on Jul 25, 2020 10:38:34 GMT -5
So happy for you. I think you made the best decision, the option that gives you flexibility. I'm sure a few years down the road you'll pay the mortgage off.
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saveinla
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Post by saveinla on Jul 25, 2020 10:53:40 GMT -5
Congrats on making the decision. Just know this is an estimate - it may become a little lower in the final statement.
I have been waffling about this also and know how you feel. I want the 15 year, my DH wants the 30 years - I think we will accept the 20 year as a compromise.
If you don't want Escrow, tell him right away to fix it - if not it will become a hassle later on - sign off only on the one without the escrow added and have an email trail. I have had this issue before and I had to say at the last minute that I would back off on the entire process for them to remove it. It took a week of back and forth and so much stress and phone calls, that I will never ever do business with Wells Fargo again.
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Post by Deleted on Jul 25, 2020 11:06:53 GMT -5
Yep. I made sure I called out the escrow being included in the payment estimate and he said I was definitely down for no escrow, but that he includes that in there just to get an idea of the total monthly cost, and future estimates are going to have that in there as a reminder that it is an extra cost. Then he proceeded to lecture me about the need to pay taxes and insurance and having a lien put on your property. I'm like...yeah, I know I have to pay this stuff. I've been doing it for 20 years.
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oped
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Post by oped on Jul 25, 2020 11:59:09 GMT -5
The thing that is killing me are those damn closing costs. I'm not going to do it because it defeats what I'm trying to do, but I understand why Phil says borrow as much as you can. If the closing costs are $2700, that's an additional 2.75% on the cost of the loan. That's really mentally tripping me up right now. How much did you Roth make last year? The decade before? How does that compare with closing costs?
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