Comments on: Improving Your Financial Position Gives You More Opportunities

By: fern

fern — Wed, 24 Dec 2008 17:41:05 +0000

i have a different sort of problem that is keeping me from refinancing. My principal balance on my 6% 30-year fixed rate loan is just $68,000. (I put 45% down when i bought it. I am single but good at saving money.) I’ve been prepaying for 13 years. I started out prepaying just $100 or $200 a month but for the past few years i’ve been doing $425 a month. I’m guessing, and i wish i knew some math whiz who could make this calculation, that i’d do better to just keep prepaying on the balance, which, if i do, i’m scheduled to pay off entirely in 7 years, rather than shelling out a few thousand for a refinance closing.

By: Marci

Marci — Tue, 23 Dec 2008 21:19:21 +0000

Have you thought about taking out a personal loan for the less than 20% it would take to pay the house down to the 80% figure? Would the difference in PMI make up eventually for the savings in interest over the life of the loan? Just a thought.

Dealing in percentages, one does not know if you need a couple thousand to do that, or 10′s of thousands to do that – so hard to say if it is feasible or not. Of course, there is the additional payment required also – but sometimes it can be worth it, if the cash flow works out for you.

I did this once when I wanted to go from my ARM introductory rate to my fixed rate (within the first 3 years of the mortgage) and it worked out well for me. Just a thought.

Keep a good sense of humor on all the rest of the stuff – the comedy of errors – happening to you. Just remember, if you are getting hit with all the problems, then someone else is being left alone Thanks for doing that for the rest of us ! haha

By: Di Eats the Elephant

Di Eats the Elephant — Tue, 23 Dec 2008 19:50:33 +0000

I’m exactly where you are – maybe a year ahead. My house was 100% financed and the 20% loan is even higher than the 6% loan. It’s now rented, but since I couldn’t rent it for enough to cover 100% mortgage plus PMI, have to still make partial payments each month. I’m hoping that will catch-up over time, but wonder about paying down the 20%. Over at 7m7y.com, AJC advocates looking for what gives us the best return on our dollar and right now the 8% on the 20% loan is not the worse debt I have. Have a great time on your trip – hope everything’s fine when you return!

By: MITBeta @ Don't Feed the Alligators

MITBeta @ Don't Feed the Alligators — Tue, 23 Dec 2008 18:12:37 +0000

I know how you feel also. We put 10% down on our current home, but due to the hit on real estate in our area, our house is now worth around $100,000 less than we paid for it (or are paying for it…), so we’re upside-down. To get to 20% equity is going to take a LONG time. We’re at 6.125% on our first mortgage (fixed, 30 years) so it’s not killing us, but it sure would be nice to free up a little more cash flow. I told my wife the only thing I wanted for Christmas was to be able to take advantage of lower mortgage rates. Guess I’m all grown up now…

By: Rich

Rich — Tue, 23 Dec 2008 05:10:20 +0000

I know how you feel. I was just telling my wife how I wished we had enough to put 20% down on a new home. The combination of low interest rates AND low home prices is an opportunity that doesn’t come along often. But like you, I am working to improve my financial situation so hopefully I am prepared the next time opportunity shows itself.