SuperSpreader Posted September 25, 2021 Share Posted September 25, 2021 1 hour ago, Ominous said: We saw an increase yesterday. I did 30 year 2.5 no costs last year. I literally closed yesterday. Quote Link to comment Share on other sites More sharing options...
Air_Delivery Posted September 25, 2021 Share Posted September 25, 2021 No point paying more if you can invest. 1 Quote Link to comment Share on other sites More sharing options...
Ominous Posted September 25, 2021 Share Posted September 25, 2021 11 minutes ago, CayceG said: I'm interested in why here. I'm not going anywhere any time soon, and I figure the 15 year at the lower rate is going to let me pay off sooner and save more. It gives you more cash flow options. You can always pay more if you want, or you could invest the lower payment into something that will return much more in gains than you would spend in interest. Quote Link to comment Share on other sites More sharing options...
SuperSpreader Posted September 25, 2021 Share Posted September 25, 2021 4 minutes ago, Ominous said: It gives you more cash flow options. You can always pay more if you want, or you could invest the lower payment into something that will return much more in gains than you would spend in interest. We had enough to buy our place outright and our financial advisor talked us out of it. She had us put 20% down and invest the rest. Basically I could invest everything if I bought it outright and after 5 years it wouldn't be as much as doing the 80% I invested. The growth of that 80% should be higher than the interest and average property value growth over time. 1 Quote Link to comment Share on other sites More sharing options...
Ominous Posted September 25, 2021 Share Posted September 25, 2021 9 minutes ago, SuperSpreader said: We had enough to buy our place outright and our financial advisor talked us out of it. She had us put 20% down and invest the rest. Basically I could invest everything if I bought it outright and after 5 years it wouldn't be as much as doing the 80% I invested. The growth of that 80% should be higher than the interest and average property value growth over time. We worh with Charles Schwab and they often recommend people with tens (hundreds) of millions of dollars get mortgages so they can keep as much of their assets invested. Make your money work for you and you won't need to work as hard for it. Quote Link to comment Share on other sites More sharing options...
mclumber1 Posted September 25, 2021 Share Posted September 25, 2021 42 minutes ago, CayceG said: I'm interested in why here. I'm not going anywhere any time soon, and I figure the 15 year at the lower rate is going to let me pay off sooner and save more. A 30 year would potentially have less risk though? If you lose your job or have to take a pay cut, it will be easier to absorb the blow from a lower monthly payment compared to the higher minimum payment on a 15 year. Quote Link to comment Share on other sites More sharing options...
CayceG Posted September 25, 2021 Share Posted September 25, 2021 All these are fair considerations. And I'm still not decided on what to do just yet. I'll think it over through the weekend, look at my brokerage accounts and savings, then see what next week brings. Maybe the Chinese markets will fall and bring our interest rates lower Quote Link to comment Share on other sites More sharing options...
Joe Posted September 25, 2021 Share Posted September 25, 2021 I didn’t love my job as a financial advisor, but the biggest takeaway I took from it is that 15 year mortgages are a scam. Quote Link to comment Share on other sites More sharing options...
CayceG Posted September 25, 2021 Share Posted September 25, 2021 3 minutes ago, Joe said: I didn’t love my job as a financial advisor, but the biggest takeaway I took from it is that 15 year mortgages are a scam. Oh? I got snookered by the whole life insurance thing a while back. (I got out quick though) Tell me more about this. Quote Link to comment Share on other sites More sharing options...
Joe Posted September 25, 2021 Share Posted September 25, 2021 13 minutes ago, CayceG said: Oh? I got snookered by the whole life insurance thing a while back. (I got out quick though) Tell me more about this. Basically, get your 15 year quote and 30 year quote. Take the 30 year. With the money you are saving, open a Vanguard account and put that money in an S&P ETF. After 15 years, you would have enough to pay off the rest of your mortgage with that account and plenty of change. Plus, you would have the flexibility to use that money elsewhere should an emergency arise. 1 Quote Link to comment Share on other sites More sharing options...
Ominous Posted September 25, 2021 Share Posted September 25, 2021 Also remember that Fannie and Freddie are risk based in terms of their pricing. They have loan level adjustments based on your LTV and FICO that play into how much you pay, or don't pay, for a rate. So sometimes people will want to put more down to get a lower rate without having to pay as much in points, but I still think it's dumb to put more money down then is needed. The best way to save money is having a FICO over 740, or even 720. Nerd stuff https://singlefamily.fanniemae.com/media/9391/display Cure for insomnia. https://singlefamily.fanniemae.com/media/28871/display Quote Link to comment Share on other sites More sharing options...
Joe Posted September 25, 2021 Share Posted September 25, 2021 Effectiveness of "Borrow 30-Year and Invest The Difference" THEFINANCEBUFF.COM A 30-year loan has lower monthly payments than a 15-year loan. See why investing the difference in monthly payments doesn't pay off for a long time. Here’s an example of what I was talking about. This example uses a 5% side fund, which is pretty conservative. S&P historically does 8% I believe. So it doesn’t quite get to paying off the mortgage in 15 years, but it gets pretty close and you have way more flexibility. Of course you have to be disciplined to maintain the side fund/investment account. Note: the conclusion of the article is the opposite of what I’m saying lol, but it’s important to consider that 5% is a lowball number assuming you are a disciplined investor and won’t get scared and withdraw at first sign of a dip. Quote Link to comment Share on other sites More sharing options...
Ominous Posted September 25, 2021 Share Posted September 25, 2021 4 minutes ago, Joe said: Effectiveness of "Borrow 30-Year and Invest The Difference" THEFINANCEBUFF.COM A 30-year loan has lower monthly payments than a 15-year loan. See why investing the difference in monthly payments doesn't pay off for a long time. Here’s an example of what I was talking about. This example uses a 5% side fund, which is pretty conservative. S&P historically does 8% I believe. So it doesn’t quite get to paying off the mortgage in 15 years, but it gets pretty close and you have way more flexibility. Of course you have to be disciplined to maintain the side fund/investment account. They also use 3.5 percent in their example, which in 2020 / 2021 is a pretty terrible rate for a rate and term loan. Quote Link to comment Share on other sites More sharing options...
b_m_b_m_b_m Posted September 25, 2021 Share Posted September 25, 2021 34 minutes ago, CayceG said: Oh? I got snookered by the whole life insurance thing a while back. (I got out quick though) Tell me more about this. Oh man yeah almost never go whole life, term is where to go for almost everyone Quote Link to comment Share on other sites More sharing options...
CayceG Posted September 25, 2021 Share Posted September 25, 2021 @Ominous @Joe I've tinkered around with some amortization tables on what I currently owe, vs. what a potential 15 year would be vs. what I could invest in the difference (yay Vanguard ETFs). The mortgage brokers I've spoken to have also offered 20 year loans. I've not heard of those. But I've gotten a quote or two. I don't know if 20 years are weird refinancing scams or if they're just splitting the difference between 15 and 30 year. I'm being pretty conservative with estimated return rates, so it looks like the "invest the difference" would work out well on a 20 year. If the market beats 3% over the next 15 years, then I'm even better off. Quote Link to comment Share on other sites More sharing options...
Guest Posted September 25, 2021 Share Posted September 25, 2021 There are reasons to pay down debt more rapidly, but a lot of it is more psychological, like studies about people being more likely to stay in the same job when they have debt for stability reasons versus taking a chance on a new job. If you can get terms low enough that inflation pretty much wipes out the rate, pay it off as slow as possible and use that cash flow for whatever else you’d rather use it for. Quote Link to comment Share on other sites More sharing options...
Commissar SFLUFAN Posted September 30, 2021 Author Share Posted September 30, 2021 Guess who missed a second interest payment deadline? Evergrande: Chinese property giant 'misses another payment deadline' WWW.BBC.COM The indebted Chinese property giant is said to have missed more payments to overseas investors. 1 Quote Link to comment Share on other sites More sharing options...
CayceG Posted September 30, 2021 Share Posted September 30, 2021 Oof... that's not great! When do the execs get put in front of a 57mm anti-aircraft cannon? Quote Link to comment Share on other sites More sharing options...
Uaarkson Posted September 30, 2021 Share Posted September 30, 2021 China is going to throw the entire developed world into a depression. 1 Quote Link to comment Share on other sites More sharing options...
b_m_b_m_b_m Posted September 30, 2021 Share Posted September 30, 2021 15 minutes ago, Uaarkson said: China is going to throw the entire developed world into a depression. Not if we do it first! Quote Link to comment Share on other sites More sharing options...
Commissar SFLUFAN Posted October 21, 2021 Author Share Posted October 21, 2021 China Evergrande shares fall sharply after $2.6bn asset sale collapses | Evergrande | The Guardian WWW.THEGUARDIAN.COM ‘No guarantee’ Chinese property giant can meet its $305bn debts, starting with a deadline on Monday that could trigger default Quote Shares in the struggling property giant China Evergrande have fallen sharply after plans to offload a stake in one of its units for $2.6bn fell through, casting further doubt over whether it can avert the country’s biggest ever corporate failure. China Evergrande Group, the parent company for the sprawling empire built by former steel industry executive Xu Jiayin, closed down 12.54% in Hong Kong on Thursday. Evergrande announced on Wednesday that it had formally abandoned plans to sell a 50.1% slice of Evergrande Property Services, one of its most profitable units, and said there was “no guarantee” it could meet its financial obligations in order to stay afloat. Quote Link to comment Share on other sites More sharing options...
Commissar SFLUFAN Posted August 17, 2023 Author Share Posted August 17, 2023 Guess who finally filed for bankruptcy? China Evergrande seeks Chapter 15 protection in Manhattan bankruptcy court | Reuters WWW.REUTERS.COM China Evergrande , which is the world's most heavily indebted property developer and became the poster child for China's property crisis, on Thursday filed for protection from creditors in a U.S. bankruptcy court. Quote China Evergrande (3333.HK), which is the world's most heavily indebted property developer and became the poster child for China's property crisis, on Thursday filed for protection from creditors in a U.S. bankruptcy court. The company sought protection under Chapter 15 of the U.S. bankruptcy code, which shields non-U.S. companies that are undergoing restructurings from creditors that hope to sue them or tie up assets in the United States. Quote Link to comment Share on other sites More sharing options...
elbobo Posted August 17, 2023 Share Posted August 17, 2023 Oh that is not good Quote Link to comment Share on other sites More sharing options...
Commissar SFLUFAN Posted August 17, 2023 Author Share Posted August 17, 2023 2 minutes ago, elbobo said: Oh that is not good While this bankruptcy filing only impacts US-based creditors, it doesn't exactly instill confidence in the ability of the Evergrande to meet its debt obligations to domestic Chinese creditors. And by extension, that would have a less-than-desirable impact on the Chinese banking system. Quote Link to comment Share on other sites More sharing options...
CitizenVectron Posted August 18, 2023 Share Posted August 18, 2023 Things in China are shaky. The government has stopped recording unemployment figures for young people after they rose above 20%. Bad economy combined with young men out of work can equal political trouble. Quote Link to comment Share on other sites More sharing options...
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