Always, always triple check these kinds of get rich quick schemes out!!

And remember, if it seems too easy or too good... It's most likely just plain crappola.

I was too excited to sleep.

I am in the middle of a refinance at 3.75% for 30 years...:thumbsup:

Nice! That refi window seems to be closing more and more each day....

Dave. Thanks..

Yes, The bottom at the bank I am at was 3.625% and it went to 3.825%, so I am going for it.. Right now it is 3.75%

No cost , and 300. fee.

Once Bernanke took the 2015 rate increase off the table and tied it to the Unemployment rate that can be manipulated, I knew it was time...He can change things now overnight.

I have a good loan now, but soon I will have a great loan...Just unbelievable ...Below 4% APR.....:thumbsup: :thumbsup:

Awesome!

We just closed on our new (to us) home with a 30 yr fixed at 3.75 too. :)

I refinanced 2nd week in December. 3.50% 30 year.

WOOT....Congrats Albert...:thumbsup: :thumbsup:

Now that is SWEET....:thumbsup:

Three weeks ago I got an offer for a 15yr @ 2.875 fixed. We are at a 3.625 fight know...for 30. My payments are really really low. Would have a nice positive cash flow if we were to rent it out, but hey, ya gotta take a crap somewhere lol

Yes, the 15 year is 2.9% but I am still going with a 30 Year.. The payments are lower and I prefer a longer loan that I can always pay down as I see fit.

But at that rate, I don't see me adding principal payments ...I will go the full term if I stay here...

At that point it is a personal choice..Either way, the deals are great...

I agree mike, with the key word being "if"....me too, if I stay, still up in the air. I like the idea of NO mortgage.

Yes, I may be moving near Family in the next several years, depending on a lot of things...Health or too high of rates in a few years.

But plan A is to secure another low fixed 30 year just in case I stay here...

I do like the idea of NO mortgage, but only if when I buy the rates are too high..Then maybe I would pay cash..Or at least 60 to 70% .
But the rates would have to be in the 8 or 9% range for me to consider paying more down...

But I cannot wait any longer about IF I am moving in a few years...Just in case I don't...

I paid all cash for a house once -- it was a huge mistake. You're losing the use of the capital to invest to make money and grow....

With interest rates this low anyone is foolish to pay off early or put too much down.

Think of it this way... I get a bit more than 4% in TAX FREE muni bonds... and a mortgage is less than that and you get to deduct the interest payments... so in actual fact you can make more money on your money than you're paying.

The 'key' to making a return - called ROI (return on investment) is to put down 20% -- say on a 500K house... so we'll call that 100K down.... if the house sells later for 600K -- you've doubled your "INVESTMENT" which was the cash you put down. Not bad... not bad at all.

If you pay all cash for the house -- 500K -- and sell for 600K -- you've only earned 20% on your money.

Greg,

You know I agree with you... It took me a while to convince the Wife a few years back. When the rates were 4.6%, I told her no paying the house off, no paying early, and no extra payments..:idea:

Now she is Investment smart and totally gets it...So I don't have to convince her anymore..

Only if the rates were like in the 1990's would I consider a Paid for home...Rates in the double digits..But now ? It is a no brainer...

A new 30 year fixed at 3.75%....My Wife is totally on board with going full term..:thumbsup:

My Sister ? The opposite...She paid it off and then could not cash out money to invest when the rates went down...She is stuck ...No Liquidity.:sieg:

High Credit card debt, and Student Loans...I gave up giving advise that she won't listen to and tells me she knows what she is doing..:bang:

Did I mention her Investment advisor is Chase at 1.4% with all Chase Investments ?:bang:

I think the problem with money management "in general" is that we grow up with ideas and thoughts from our past/parents/etc. EVERYONE wants a paid off house... Well YEAH! But it doesn't make FINANCIAL sense if you have adequate cash flow and adequate assets to retire on. It's simple math rather than simple thinking.

The key to "retirement" --- is not about how much money is coming in -- it's about how much money is going OUT... if you don't have much going out you can make it with not that big of a nest egg. The problem with most people is that they don't have ANY plan. So til the day they retire - they're spending like the pay check will never change... If you're 35 and have a 30 year mortgage and you pay it off the month you retire... then you don't need "X" coming in to pay the mortgage. This is all a manor of actually sitting down with pad and pencil and doing a simple spread sheet. How old you are - when you plan to retire - what you owe MONTHLY when will things be paid off - and make sure you don't owe a ton of dough come retirement time. The thing with a fixed rate mortgage was that you should be making double in 20 years and still have that cheap mortgage payment. Now days people are buying bigger more expensive houses and they're like 55 years old - and they have a 10 year variable rate mortgage that's set to go UP at the same time they're set to retire. That's just DUMB. Sorry. DUMB DUMB DUMB. Do ya really want to be 70 years old and a greeter at Wal Mart to make ends meet? :popcorn2:


Make a plan -- realistic -- and stick to it and don't fudge the numbers. Do so at your own peril. Retirement is what you were SUPPOSED to be working for. You can have a nice relaxed retirement - or you can struggle to keep the lights on and watch as everything around you is falling apart.

So here's what you really HOPE FOR! You have a fixed rate 30 year mortgage at 4% --- and INTEREST RATES go to 10%... I LOVE inflation. I can make a killing in income in an inflationary environment. If you already own your house on or near retirement and your savings are earning TWICE what you're paying out --- PERECT! I'd love to be able to park money is a CD at 9 or 10%! I'd double my income! :G-Dub:

Ya Greg, Planning is critical..

Take me for instance..I was forced into retirement 3 years ago due to two Strokes, A Brain lesion that turned into Seizures, and a major Heart infection and a Bad Heart valve.. I know, When I do things, I go BIG.

But I will be OK due to long term planning.. I had planned to work until I was at least 57 , But I had to retire at 50.

But like you said, it is how much is going out..I keep my monthly nutt going out reasonable , so I will make it. My Investments will generate enough for me. And like you said, this is the slow time...When Inflation hits ? I know my income will double with lower risk, a.k.a. CD ladders, ect... So if I can make it now, I will make it then.

I have no problem taking a 30 year loan at 53. Also I have plenty of equity. And locking in at 3.75% is just incredible.

Lucky I was living consumer debt free and had my Taxable account 90% of my Investments. So when tragedy struck, i was as ready as I could be...

We have to plan for the unknown sometimes...

Mike that's the key!

A mortgage of any kind is a no biggie IF you have adequate income.... Then it's smart to use cheap mortgage money! But you and I know that you have to have the assets etc to back it up.

What I'm saying is that people who DON'T have adequate assets and retirement income - looking at a mortgage for a bigger house etc -- and retirement is right around the corner. That's a plan alright -- a plan for disaster!

I have a mortgage on my main house and this new Sun Valley house -- but it's peanuts on a monthly basis compared to my income and assets - so I don't even think about it. But I certainly know that most aren't quiet as lucky as I have been. Retirement income is precious and ya just gotta plan for it is all. :thumbsup:

AMEN Greg..

I had to train the Wife...She wanted to move up, ect... and I said no..We stay within our means and if things go well, we increase our spending later.
I would rather die with assets left than have to be a Walmart greeter..

And I could never have written the script for what happened to me...I almost didn't make it... I Had the Notary and the Attorney writing my Trust on my deathbed.

For you readers...WRITE A WILL AND A TRUST NOW.. Do not wait...

So that is why you haven't seen me at any events yet..Still recovering..

But like you said, Inflation will come, and that will be good for guys like you and me...Low Debt and Liquidity to Invest both no risk, and still Invest in the Market..:G-Dub:

At&t
 

If you check your accounts -- AT&T (T) paid you a nice dividend after the market closed on Friday.... AND it went up in price too!

Gotta love that!!


EEEEEEEEHHHHHHAAAAAAA

Greg and mike, the key the readers need to know here is PLANNING.

I committed the investment sin from 98 to 08 of invest and forget, 1100 a month from age 31 to 41. I now have 3k a month to "play with". I am still getting started and learning. I don't have much knowledge to contribute here and am taking in much more than I'm putting out....

Have a plan
Manage your debt, keep it at an absolute minimum.

I like the idea of being "homestead" in case sh$t really hit the fan, both in our market and the global market. Why do I feel this? Don't know, been in other countries where 90% of the populas has absolutely nothing. It's hard to watch as I look at my own belly. My wife and I are also fairly charitable ...

I would like to be out in 10 or so years, puts me at 55 ish.

No/ low overhead, just like you said greg....

Hey guys,

I'm no macro economist, but shouldn't the opportunity cost of borrowing in a low rate environment be the same as a high rate environment? That is, if inflation does correspond to market cycles, which I'm guessing aren't tied at the hip.

Granted, a mortgage is 30 years, and market cycles are much shorter than that, so I definitely see the appeal of locking in a cheap mortgage now....when the inflation pendulum swings hard the other way, I will be quite off-put to buy a house at over double the rates my peers are locking in now. I suspect so will a lot of people, and it will hurt house prices, maybe enough to compensate for the crappy loan rate I'll be offered.

Am I sounding like a :lostmarbles: ? These supposedly low housing prices AND low rates just doesn't make supply and demand sense... When one goes up the other should come down, no?

Steven --

Here's the problem with that thinking.

Interest compounds at the payback total will be HUGE compared to the lower interest rate - not to mention the monthly payment will also be far higher.

The housing prices might not rise as much - as demand dampens - but they still tend to rise... so by waiting - you not only pay a higher first cost - your monthly outlay is higher and your total outlay is also.


EXAMPLE:

You buy a house at 300K with 50K down - and finance 250K at 8%

Monthly payment is - 2,146.91
Total payback is - 772,888.12


Same house same down payment but at 4%


Monthly payment is - 1,506.04
Total payback is - 542,173.77

I totally get the compound interest part, but why would that house sell for the same price at 8% as 4%. Since payment affordability is based off a ratio of monthly income, the house should be cheaper.

I'm simply trying to justify to myself that I won't be screwed over when I go to buy a house in 5 or so years when these dream rates are gone. :rolleyes:

I know it was an example, but if rates go to 8% (not even terrible on a long term scale) anytime in the next few years housing would be in for a world of hurt re pricing.

Yes, that same house should be able to be bought for less because affordability for qualification purposes (DTI) would be reduced dramatically in that environment.

Depends also what income growth was over that period that arrived at an 8% interest rate environment. Inflation out of control most likely?

You guys are some smart dudes. Me ? More lucky than smart , but I was always told to hang out with smarter people to accelerate my Learning.

I have the obvious money management skills which go a long way in life, Investing 101, but my Investing 102 skills need work, and this thread helps alot.

There is a truth with the correlation of Prices being higher as rates are lower. On paper , as the rates dropped 1%, my Home went up 100K in "Value". So the Guy buying 2 years ago was getting a home for 280,000 @ 5%. Now he will pay 380,000 @ 3.75%. So when rates rise again, prices should drop...

Mike, you got it right planning and studying and keeping debt low. No matter what, it will all pay off.

And I am just trying to keep up with Dave, and Greg and some of you other guys, and trying to absorb all the knowledge I can...

Mike, stop it. You know very well what you are doing over there. :unibrow:

Dave...

Haha..Yes, I do my best...But you guys do teach this old Dog new tricks...

I just need to get healthy so I can chase you guys around the track...

But thanks to this thread, I am smarter now than I was before..:D

I totally disagree with the "hypothetical" discussion of houses going DOWN when rates rise. The historic "norm" proves that to be incorrect assumption. They won't go rising to the stratosphere like they did with the artificially low rates we have now... and most like what you'll see (which I've seen in my own personal history) is that as the rates go higher --- you'll just adjust your dream house DOWN the scale -- so your monthly will be higher for a less desirable home.

What the low rates have allowed folks to do is to buy way more house than they would have "ordinarily" been able to afford on a monthly basis.

Rates creep up slowly -- and people just make the adjustment.

Now -- if rates SUDDENLY went sky high in a 6 month or 1 year period that would be a different story - but that isn't the norm and if it did rock this way - the WORLD will be in a depression so nobody will be buying anything! :lol:

My Wife just said what you said....:poke: Damn....

That is a nice anecdotal piece and I don't disagree, however, interest rates and home prices are for the most part inversely connected over time. It's not perfect, but it does largely follow that "hypothetical."

http://i236.photobucket.com/albums/f...psf85fd8c6.png

There's no question that they are linked..... but what the reality is is that prices don't go UP --- and buyers are forced to buy down to what they can afford on a monthly basis as rates rise... so while the two are related - the rise in rates doesn't mean that suddenly houses are going to go down 25%. It just doesn't happen. What you really see is that houses go UP quickly (too fast) as the rates are low.

What I was trying to show with my rate example is that while you might get a house a smidgen lower -- you'll more than make up for your "deal" in interest.

The perfect storm to buy has been the last two or three years --- falling house prices with the lowest rates in 50 years. Not likely to repeat that scenario --- as houses are already getting multi bids - prices inching up -- and it's almost a given that rates will climb from these historic lows.

Let's also examine that chart a bit closer -- as we all know that the super low rates caused the spike in purchasing power and home values ---- which is also the PLUNGE in that nice spike up. Painful for many and a historic aberration.

A report just came out and said that home prices ROSE 8.3% in all but four states. That's the largest gain since 2006.


THAT is why interest rates will start to creep up --- IF --- IF --- that continues. Money is a market. More demand to borrow - causes the rates to go up. Money is no different than anything else -- if there is demand then things go UP.

So back to the house/interest rate question. Those that haven't already jumped in with both feet are already seeing that once in a lifetime opportunity (Low house prices - lower interest rates) slip away.

The FED is still artificially holding rates down. Once they see the employment picture brighten and the housing sales start jumping up... they'll ease off the brake and let the rates rise.


FOR INVESTING 102

One of the oldest sayings is ---- "when interest rates fly - stocks will die"

We have a long way to go for the interest rate (treasuries and CD's and Money Market funds) to start to be attractive enough to pull money out of stocks and into interest bearing investments. But for 102 -- you need to learn to be aware of these interactions and trends.

This is interesting! Shows a complete lack of planning and understanding of money.... Or even "life" as in. Your future?!?!?


http://m.cnbc.com//id/100434965

Ameriprise tried to sell me annuities..:confused59: Before the crash in 2006/2007...I stayed in Cash after selling a home....That way I was in control of the money in 2009...

Also people need to do the research..One study says you need 11 times your yearly spending to survive retirement...

I say you need 14 to 17 times your yearly spending in funds to survive...And it must be invested for dividends , ect.... And not in cash.



Filling out the paperwork now for the 3.75% 30 year fixed right now...

I think that holds true if your expenses/lifestyle stays the same, at least from what I've heard... I am planning on 1.2 to 1.5 with the hopes of 5% ish for my return, bout yrs 10 to go, hopefully no more....we'll see...and that's a little under what I make now. Mike

I'm just not going to stop working :lol:

Seriously, my second life will be doing something that still generates income but is on my own terms so I can "enjoy" retirement. In all honesty, the idea of just lounging around while traveling around bores me. I'd have to do something to keep me going. Might as well make some money at it if I can.

Once the govt gives its blessing, and finds a way to tax pot, its going to be a VERY lucrative industry...

5 Marijuana Stocks Going Crazy (And This Could Be Just The Beginning)
http://seekingalpha.com/article/1156...g?source=yahoo

The thing is - we all know that "expenses" are allowed to grow to match or overtake income. Usually without corresponding savings/investment.

I can tell you that you WILL spend MORE in retirement than when you're working. You just don't have time to spend when you're working all day. Wait til ya got nothing to do all day - every day - and someone says "hey! Let's all go to X...." You're in! :lol:

You don't spend on the same stuff.... but you'll spend it on hobbies - trips - dinning/entertaining - and MEDICAL. Ya get older - insurance goes up - trips to the doc increase - meds you didn't use to need are now required etc.

The problem with retirement "lately" has been the utter lack of returns. If the returns get better -- your investments grow quicker (compounding) and when you retire -- getting 8% on a million is WAY better than getting a lousy 4%!!

The keys to this ---- by retirement have your expenses down to basics ---- and investing EARLY so it has time to compound.... One has to go UP and the other must go down. Or -- you live for 25 or 30 years wish'n' you'd have done a better job on something you had plenty of time to prepare for.

It used to be you inherited a little from your folks.... but I'm telling ya that about the only thing most will inherit any more is the debt from taking care of them in their final years. You/they will have blown thru the house - savings - and anything else not nailed down if they stroke - or get cancer - or require assisted living. I can tell you this via my own personal experience with my parents. 4 years of assisted care --- ya got nothing left. And these days people live longer but then they seem to need more care in the end.

Greg..

I call it the "Burn Rate"...How much you are burning through your money..

My big things for 2013 was to make sure we stay Insured ,YES, and second was to refinance the Home loan...YES, just locked in a 30 year 3.75% fixed this morning ..:thumbsup: :thumbsup:

We have also stopped the rate of going through money, so we have enough to last..