For the Real Estate Drop in sales and price Naysayers HOLD ONTO YOUR HATS

[DWC]

They banned short term rentals here and now small condos are on the brink of collapsing: https://www.msn.com/en-ca/money/fin...p&cvid=2b5c1317af7248e68035db0e12dc42cc&ei=17

That’s a quick way to resolve the housing affordability issue in quite a bit of the Southwest. Next couple years will be interesting

 

[angiebaby]

That’s a quick way to resolve the housing affordability issue in quite a bit of the Southwest. Next couple years will be interesting

and the Mountain West.

 

[nameisbond]

Is that rule for the entire province?

Pretty close to being the entire province: https://www2.gov.bc.ca/gov/content/...-term-rentals/principal-residence-requirement

 

[nameisbond]

It is turning the tide on our overpriced condos and townhomes. The federal government is also giving our version of counties hundreds of millions to build more affordable housing. Mix in our rising interest rates. Real estate is in trouble here.

 

[cofooter]

Not a great time to be a condo owner when you also add in big jumps in HOA dues due to insurance increases and inflation and you can't rent it.........

 

[DC-88]

Paying off that mortgage and the 1800 can also mean financial independence and retiring early. At some point one might just get tired of financing other peoples lifestyle!

This . But every now and then you'll still get called an idiot for "Not being able to write off all of that interest " .The goal is to be making interest not paying it.

 

[mesquito_creek]

This . But every now and then you'll still get called an idiot for "Not being able to write off all of that interest " .The goal is to be making interest not paying it.

Since the Trump tax cuts I laugh when anyone says that. Definitely not anyone who says that should be consulted on the tax code!

 

[Orange Juice]

You just described the self inflicted problem. You don’t “need” a remodel every 10 years. You’ve just been conditioned to want one.

Wife likes clean grout in the shower. I’m lucky I get to push it 10 years.

 

[ChumpChange]

Wife likes clean grout in the shower. I’m lucky I get to push it 10 years.

Buy her some knee pads and then she can have clean grout whenever she wants.

 

[OldSchoolBoats]

2-3% of principal is the avg cost to refi if you google it. So 12k isn’t far off on some loan sizes. It was always about 18 months to break even when I was part of the refi crowd.

Google is wrong. Did plenty of no cost refinances during the boom. 2%-3% cost to refinance is insane. If you or anyone you know paid that, you need a new mortgage guy or gal.

 

[ahavasu]

The thing with paying off the house in CA is that I still have to pay property taxes and insurance. Last year, my property taxes were almost 19K, and my insurance was 3K. My house will be paid off in 15 years; at the rate the taxes have been climbing over the last ten years, I will be pushing 28-30K in taxes and 5K for insurance. 3k a month to live in my paid-off home lol, crazy to me. I will have to seriously consider the states with low property taxes in the future. I was considering Texas, where my son lives, but one look there, and I realized I have it pretty good, comparatively speaking. As an example, 1Mil on the lake equals 32-38K property taxes in Montgomery County. We are being taxed to death in this country, ugh.

 

[prorider]

That’s outrageous. Texas is definitely not place to retire because property taxes are so high. They brag about no state income taxes for working people.

 

[LargeOrangeFont]

Google is wrong. Did plenty of no cost refinances during the boom. 2%-3% cost to refinance is insane. If you or anyone you know paid that, you need a new mortgage guy or gal.

Truth.

 

[DWC]

The thing with paying off the house in CA is that I still have to pay property taxes and insurance. Last year, my property taxes were almost 19K, and my insurance was 3K. My house will be paid off in 15 years; at the rate the taxes have been climbing over the last ten years, I will be pushing 28-30K in taxes and 5K for insurance. 3k a month to live in my paid-off home lol, crazy to me. I will have to seriously consider the states with low property taxes in the future. I was considering Texas, where my son lives, but one look there, and I realized I have it pretty good, comparatively speaking. As an example, 1Mil on the lake equals 32-38K property taxes in Montgomery County. We are being taxed to death in this country, ugh.

It’s brutal. Our original plan in retirement was to sell our current home and buy something in a similar price range near the beach. The prices are insane, the property tax jump is brutal, the fees on a condo are off the charts. What a bummer.

 

[mesquito_creek]

Google is wrong. Did plenty of no cost refinances during the boom. 2%-3% cost to refinance is insane. If you or anyone you know paid that, you need a new mortgage guy or gal.

I also did no cost during the boom… but I haven’t seen it for a long time including some brokers here on RDP who I shopped. I was quoted 2% last time I checked when I had a BofA mortgage trying to refi directly with them.

Just point us to no cost now and I am sure everyone will appreciate it. I might use your reference if I ever decide to have a mortgage again.

 

[LargeOrangeFont]

It’s brutal. Our original plan in retirement was to sell our current home and buy something in a similar price range near the beach. The prices are insane, the property tax jump is brutal, the fees on a condo are off the charts. What a bummer.

We disabused ourselves of that idea very quickly before moving. I could have afforded something small near the beach after selling.. I couldn't afford the tax and fees.

 

[OldSchoolBoats]

Truth.

Some people see a super low rate and don't realize how much it costs to obtain that rate. It's like tunnel vision. Next thing you know you paid 2 points for that rate

I also did no cost during the boom… but I haven’t seen it for a long time including some brokers here on RDP who I shopped. I was quoted 2% last time I checked when I had a BofA mortgage trying to refi directly with them.

Just point us to no cost now and I am sure everyone will appreciate it. I might use your reference if I ever decide to have a mortgage again.

I am personally licensed in AZ, CA and TN but company can loan in 32 states so my reference is me. I have done a ton of deals for RDP members. As a wholesale broker, I have more flexibility with pricing and compensation then a lot of competitors.

 

[mesquito_creek]

Truth.

Just to be sure we are saying the same thing “no cost” doesn’t mean we roll all the cost into the new mortgage… no cost means no cost.

Some people see a super low rate and don't realize how much it costs to obtain that rate. It's like tunnel vision. Next thing you know you paid 2 points for that rate

I am personally licensed in AZ, CA and TN but company can loan in 32 states so my reference is me. I have done a ton of deals for RDP members. As a wholesale broker, I have more flexibility with pricing and compensation then a lot of competitors.

No cost doesn’t mean we roll all the cost into your new mortgage and it’s no out of pocket to the barrower. No cost means no cost correct?

 

[LargeOrangeFont]

Just to be sure we are saying the same thing “no cost” doesn’t mean we roll all the cost into the new mortgage… no cost means no cost.

No cost doesn’t mean we roll all the cost into your new mortgage and it’s no out of pocket to the barrower. No cost means no cost correct?

There is always a cost, it gets rolled in. You might not see a line item for it, but it is in there.

 

[mesquito_creek]

There is always a cost, it gets rolled in. You might not see a line item for it, but it is in there.

That why I stopped talking to Mortgage refi professionals. They call something no cost and somehow 4-5 grand was being rolled into the new mortgage. So it would take 16-18 month of the new payment “saving” to break even on the costs being rolled in the new mortgage.

In the early 2000s I refinanced with BofA conventional into a new lower rate BofA conventional and the total cost and fees was like 200 bucks. That was close enough for me to consider it no cost.

Last time I checked with them it’s was going to be like 3800 … so I didn’t bother

 

[regor]

The thing with paying off the house in CA is that I still have to pay property taxes and insurance. Last year, my property taxes were almost 19K, and my insurance was 3K. My house will be paid off in 15 years; at the rate the taxes have been climbing over the last ten years, I will be pushing 28-30K in taxes and 5K for insurance. 3k a month to live in my paid-off home lol, crazy to me. I will have to seriously consider the states with low property taxes in the future. I was considering Texas, where my son lives, but one look there, and I realized I have it pretty good, comparatively speaking. As an example, 1Mil on the lake equals 32-38K property taxes in Montgomery County. We are being taxed to death in this country, ugh.

Pretty sure it's about damn time to do something about them................

 

[OldSchoolBoats]

Just to be sure we are saying the same thing “no cost” doesn’t mean we roll all the cost into the new mortgage… no cost means no cost.

No cost doesn’t mean we roll all the cost into your new mortgage and it’s no out of pocket to the barrower. No cost means no cost correct?

When refinancing or purchasing, there are 2 types of closing costs. Recurring and Non Recurring. The cost of the loan and what you would determine your break even point on is the non Recurring costs (appraisal, title, escrow, compensation, points...etc). Those costs can easily be covered with lender credit to make it a no cost loan. Recurring costs are pre paid interest and escrow reserves for taxes and insurance. Those don't get covered, but if you refinance servicer to servicer, the current escrow account balance can be applied to your payoff. If not servicer to servicer, you get that account refunded so simply make a principal payment with that money or don't.

 

[OldSchoolBoats]

That why I stopped talking to Mortgage refi professionals. They call something no cost and somehow 4-5 grand was being rolled into the new mortgage. So it would take 16-18 month of the new payment “saving” to break even on the costs being rolled in the new mortgage.

In the early 2000s I refinanced with BofA conventional into a new lower rate BofA conventional and the total cost and fees was like 200 bucks. That was close enough for me to consider it no cost.

Last time I checked with them it’s was going to be like 3800 … so I didn’t bother

So you consider a break even point of 16-18 months a bad deal??

 

[mesquito_creek]

When refinancing or purchasing, there are 2 types of closing costs. Recurring and Non Recurring. The cost of the loan and what you would determine your break even point on is the non Recurring costs (appraisal, title, escrow, compensation, points...etc). Those costs can easily be covered with lender credit to make it a no cost loan. Recurring costs are pre paid interest and escrow reserves for taxes and insurance. Those don't get covered, but if you refinance servicer to servicer, the current escrow account balance can be applied to your payoff. If not servicer to servicer, you get that account refunded so simply make a principal payment with that money or don't.

So when we are done with all that… is my principal loan balance higher or lower or the same on the day we close to new loan?

 

[mesquito_creek]

So you consider a break even point of 16-18 months a bad deal??

Neither bad nor good… just what it’s costing me.

I also have repeatedly said I am to dumb for most of this type of math, so I just don’t have mortgages. I just use cash because I understand that.

But you never know, if the Trump tax cuts expire in 2025 like they are set too I might take out a mortgage again.

 

[LargeOrangeFont]

So when we are done with all that… is my principal loan balance higher or lower or the same on the day we close to new loan?

The vast majority of the country does not care about that. They just care that they are saving a couple hundred bucks every month for decades. That generally outweighs a few grand tacked onto the principle of a loan, and pays for itself pretty quickly.

 

[OldSchoolBoats]

So when we are done with all that… is my principal loan balance higher or lower or the same on the day we close to new loan?

Your principal balance is always higher as your current lender will have fees included in your payoff. If you choose to roll your escrow account in, then it is higher but some people just cut that check at closing or don't have an escrow account at all.

 

[Orange Juice]

So you consider a break even point of 16-18 months a bad deal??

If you’re trying to pay the debt off yes. If you’re trying to cash out…no.

 

[OldSchoolBoats]

The vast majority of the country does not care about that. They just care that they are saving a couple hundred bucks every month for decades. That generally outweighs a few grand tacked onto the principle of a loan, and pays for itself pretty quickly.

So true. It's tunnel vision. All about the rate and payment. Have seen some wild stuff man.

 

[mesquito_creek]

Your principal balance is always higher as your current lender will have fees included in your payoff. If you choose to roll your escrow account in, then it is higher but some people just cut that check at closing or don't have an escrow account at all.

Ok. Fees to me are cost and if my principal balance goes up, also cost. I never really cared about the payment going up or down a few hundred bucks I just cared about what I was going to pay in interest over the life of the loan.

So whatever my old principal balance was compared to the new principal balance would yield a percentage and that’s what I would use when determining what the cost of refinancing is. (Plus out of pocket cost)

 

[OldSchoolBoats]

Ok. Fees to me are cost and if my principal balance goes up, also cost. I never really cared about the payment going up or down a few hundred bucks I just cared about what I was going to pay in interest over the life of the loan.

So whatever my old principal balance was compared to the new principal balance would yield a percentage and that’s what I would use when determining what the cost of refinancing is. (Plus out of pocket cost)

Reserves for taxes / insurance and pre paid interest are not fee's.

 

[mesquito_creek]

Reserves for taxes / insurance and pre paid interest are not fee's.

Fair enough but are they included in the principal balance? I don’t have a current mortgage to look. If I recall they are not included in the principal balance, they are in a separate escrow acct. So if my memory is correct, My math is still correct. Old principal / new principal + fees (excluding prepaid tax/ins) is what I would consider the cost to refi.

 

[LargeOrangeFont]

Ok. Fees to me are cost and if my principal balance goes up, also cost. I never really cared about the payment going up or down a few hundred bucks I just cared about what I was going to pay in interest over the life of the loan.

So whatever my old principal balance was compared to the new principal balance would yield a percentage and that’s what I would use when determining what the cost of refinancing is. (Plus out of pocket cost)

If you are paying 10 thousand less in interest over the life of the loan and adding a couple thousand to the principle, isn't that a mathematical win and no brainer?

Now continue paying the old higher payment and pay down the principle faster.

 

[mesquito_creek]

If you are paying 10 thousand less in interest over the life of the loan and adding a couple thousand to the principle, isn't that a mathematical win and no brainer?

Now continue paying the old higher payment and pay down the principle faster.

or take the "couple thousand" and apply it directly to the old/existing loan?.... It depends on each situation, you just have to do the math. I am not anti refi, I just don't understand "no cost" re fi marketing that has thousands in "cost". All this over the google results from lots of sources that say expect 2-3%. Followed by refi brokers who debate that figure.

If you can't explain "cost" 6th grader then I won't understand it... which how this conversation goes each time I bought investment properties, shopped mortgages, then cut a check instead.

 

[LargeOrangeFont]

or take the "couple thousand" and apply it directly to the old/existing loan?.... It depends on each situation, you just have to do the math. I am not anti refi, I just don't understand "no cost" re fi marketing that has thousands in "cost". All this over the google results from lots of sources that say expect 2-3%. Followed by refi brokers who debate that figure.

If you can't explain "cost" 6th grader then I won't understand it...

The “couple thousand” in that instance would come out of your pocket. A Refi costs you nothing out of pocket. Savings in interest over the life of the loan you would feel every month, and in the total interest paid (less). If you were going to keep your house long term, there is no reason not to do it.

6th grade explanation -

I’m going to take $5 from you every week for 12 months.

OR

I’m going to take $4 from you every week for 13 months.

Which one takes less money from you?

 

[ahavasu]

It’s brutal. Our original plan in retirement was to sell our current home and buy something in a similar price range near the beach. The prices are insane, the property tax jump is brutal, the fees on a condo are off the charts. What a bummer.

We had the same plan and hoped for an ocean view (partial even). Five years ago, this was not an impossible dream; today, even with a huge down payment, we won't be able to see the ocean. I'm not ready for a condo as I love being outside, and I am unwilling to stand on my tiptoes, and squint while looking between two bushes on a clear day just to see big blue for 2.5 million. I surrender, we are staying put for now and will re-analyze in a few years. Sucks

 

[78Southwind]

The “couple thousand” in that instance would come out of your pocket. A Refi costs you nothing out of pocket. Savings in interest over the life of the loan you would feel every month, and in the total interest paid (less). If you were going to keep your house long term, there is no reason not to do it.

6th grade explanation -

I’m going to take $5 from you every week for 12 months.

OR

I’m going to take $4 from you every week for 13 months.

Which one takes less money from you?

I have always looked at it this way. How do you want to pay the fees, upfront, over time, or both. There is no such thing as a no cost loan, well, unless you are a Biden. (But then its not really a loan). Let's assume all fees are the loan fees. Here are some examples:

The fees for the loan are $10,000, but your interest rate is 6%.

The fees for the loan are $5,000, but your interest rate is 7%.

The fees for the loan are $0, but your interest rate is 8%.

So it appears that there is no cost, but in actuality, the cost is in your interest rate that you pay overtime.

 

[shintoooo]

We had the same plan and hoped for an ocean view (partial even). Five years ago, this was not an impossible dream; today, even with a huge down payment, we won't be able to see the ocean. I'm not ready for a condo as I love being outside, and I am unwilling to stand on my tiptoes, and squint while looking between two bushes on a clear day just to see big blue for 2.5 million. I surrender, we are staying put for now and will re-analyze in a few years. Sucks

What areas are you looking for beach properties?

 

[LargeOrangeFont]

What areas are you looking for beach properties?

Not Barbados it sounds like.

 

[Havasu blue label]

I have always looked at it this way. How do you want to pay the fees, upfront, over time, or both. There is no such thing as a no cost loan, well, unless you are a Biden. (But then its not really a loan). Let's assume all fees are the loan fees. Here are some examples:

The fees for the loan are $10,000, but your interest rate is 6%.

The fees for the loan are $5,000, but your interest rate is 7%.

The fees for the loan are $0, but your interest rate is 8%.

So it appears that there is no cost, but in actuality, the cost is in your interest rate that you pay overtime.

Thank you

 

[Havasu blue label]

The “couple thousand” in that instance would come out of your pocket. A Refi costs you nothing out of pocket. Savings in interest over the life of the loan you would feel every month, and in the total interest paid (less). If you were going to keep your house long term, there is no reason not to do it.

6th grade explanation -

I’m going to take $5 from you every week for 12 months.

OR

I’m going to take $4 from you every week for 13 months.

Which one takes less money from you?

you are a financial wizard very smart

 

[Havasu blue label]

The vast majority of the country does not care about that. They just care that they are saving a couple hundred bucks every month for decades. That generally outweighs a few grand tacked onto the principle of a loan, and pays for itself pretty quickly.

The smart money cares about

 

[LargeOrangeFont]

The smart money cares about

Can the smart money tell me what they care about?

Or are they too busy holding their hats?

 

[Havasu blue label]

Can the smart money tell me what they care about?

Or are they too busy holding their hats?

Having liquid cash that was earned from working not taking out equity lines on our properties

 

[angiebaby]

Google is wrong. Did plenty of no cost refinances during the boom. 2%-3% cost to refinance is insane. If you or anyone you know paid that, you need a new mortgage guy or gal.

So no points? No loan origination fees? No appraisal costs? Please define no cost.

 

[LargeOrangeFont]

Having liquid cash that was earned from working not taking out equity lines on our properties

No one was talking about taking equity lines. We are taking about straight refis to lower monthly payments.

 

[LargeOrangeFont]

So no points? No loan origination fees? No appraisal costs? Please define no cost.

No cost is actually paying less at the end of the loan term. There is always a cost for everything, if you see it or not.

But if you actually pay less, is it really a cost?

 

[Havasu blue label]

No cost is actually paying less at the end of the loan term. There is always a cost for everything, if you see it or not.

But if you actually pay less, is it really a cost?

Don’t tell us that

 

[LargeOrangeFont]

Don’t tell us that

Math is inconvenient sometimes .

 

[Havasu blue label]

Math is inconvenient sometimes .

It sure is when you refinance for a lower rate when you can just send extra cash every month . And get to skip 2 payments.