The purpose is to force you to save more without your noticing it or having

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Jan 14, 2022
12:20:36pm

Socrates Johnson Intervention Needed

The purpose is to force you to save more without your noticing it or having

To be disciplined. If you can be disciplined enough to save 10% of your income, great. Most aren’t.

Those people would be better off with a bigger house payment because on a fifteen year mortgage most of that payment winds up effectively being savings.

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Socrates Johnson

Previous username: jkccoug
Bio page: Socrates Johnson
Joined: Jul 19, 2002
Last login: Apr 23, 2024
Total posts: 30,070 (2,090 FO)

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Messages

Author

Time

Why get a 30-year fixed mortgage if you are moving within ~7 years?

NorthBayCoug

1/14/22 11:45am

We refinanced with a variable rate mortgage with 7 years fixed, 2.1% interest

1/14/22 11:47am

Why pay 4% I/O variable when you can pay 2.875% fixed in case your plans change or convert to rental property?

mulletino

1/14/22 11:49am

can you keep an owner occupied note when you convert it to an income property?

BYUFBDAD

1/14/22 12:13pm

Yes, as long as you live in the home for 12 months as agreed on the occupancy affidavit.

mulletino

1/14/22 12:21pm

If conversion is a possibility, I'd make sure that document is in the package.

BYUFBDAD

1/14/22 1:21pm

99% of all loans are Fannie Mae or Freddie Mac. You can do whatever you want after you’ve occupied the property for 12

mulletino

1/14/22 2:12pm

<< Deleted >>

NorthBayCoug

1/14/22 12:33pm

That's what I used to think, but here is why I have changed my way of thinking

NorthBayCoug

1/14/22 12:39pm

Doesn't that $367/mo go to your equity, though? So you'll get more when you

RGGeemer

1/14/22 12:45pm

It does. But does that $367/month in the bank increase at the same rate

NorthBayCoug

1/14/22 12:48pm

My current view = 15 year mortgage, most expensive home you can afford-- even

Socrates Johnson

1/14/22 11:50am

with rates this low 30 year is objectively better than 15

Gente_Boa

1/14/22 11:53am

How so?

Socrates Johnson

1/14/22 12:32pm

yes, And you tie up less cash now in your monthly payments that you can use to

Gente_Boa

1/14/22 3:00pm

If you can be that disciplined, there is no doubt that would be something.

Socrates Johnson

1/14/22 7:00pm

Risky

RGGeemer

1/14/22 11:55am

lol. This is truly terrible advice. Buy the most expensive house you can possibl

Mayor of Cougartown

1/14/22 11:59am

To be fair, we bought in 2017 with the idea that we would move to a bigger house

RGGeemer

1/14/22 12:09pm

unprecedented times. Can't make a blanket recommendation on something based on

Mayor of Cougartown

1/14/22 12:15pm

The purpose is to force you to save more without your noticing it or having

Socrates Johnson

1/14/22 12:20pm

That is fine but it is a terrible return. 15 year rates have been in the 2s

johnnybyu

1/14/22 4:23pm

If you are disciplined enough to actually do it, I agree.

Socrates Johnson

1/14/22 7:01pm

If you buy on a 15 year mortgage, more than half of your payment is savings

Socrates Johnson

1/14/22 12:16pm

ok I get what you're saying. A way to force save.

Mayor of Cougartown

1/14/22 12:37pm

I agree house poor sucks, but if you limit to what they will loan you on a 15

Socrates Johnson

1/14/22 12:40pm

4% on a home hasn't been a good rate for a long time.

IdahoCoug

1/14/22 11:52am

What if you want to pay an extra 35% toward interest instead of principal and escrows?

mulletino

1/14/22 11:58am

Isn’t the worry things could change. Rates climb and you don’t move when you

SouthernBlueBlood

1/14/22 11:53am

So you can keep the house when you move as a rental

Gente_Boa

1/14/22 11:54am

If you can afford a new house in 7 years

RGGeemer

1/14/22 11:54am

Who knows what they're going to be doing in 7 years?

fattycoug

1/14/22 12:10pm

My thoughts have always been you don't know what's going to happen.

UNLVcougar

1/14/22 12:43pm

Explain to me how you believe an interest only loan is better than a regular 30 year? You do realize any additional

kimdaddy35

1/14/22 12:57pm

Yes, but do you realize the money you put into your house, which in

NorthBayCoug

1/14/22 3:56pm

I like interest only but it all comes down to rate. The return on paying your

johnnybyu

1/14/22 4:21pm

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