|
06-09-2014, 07:57 AM
|
#1
|
Recycles dryer sheets
Join Date: Dec 2012
Posts: 59
|
House sold quickly
So I just purchased a new home before selling the old one. I got a 3.5% ARM loan to finance the purchase. Now the old home has quickly sold and will close in 3 weeks. The mortgage broker has asked that I not pay off the loan for 6 months. What would you do with the proceeds? Invest, payoff immediately, or maybe a 6 month cd? Thanks for your input.
|
|
|
|
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!
Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!
You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!
|
06-09-2014, 09:09 AM
|
#2
|
Recycles dryer sheets
Join Date: Jun 2013
Location: Chattanooga
Posts: 499
|
I'd pay off immediately. I don't think you can find any safe investments that guarantee 3.5% so why risk it? The broker's desire should have no bearing on your decision.
|
|
|
06-09-2014, 09:11 AM
|
#3
|
gone traveling
Join Date: Sep 2003
Location: DFW
Posts: 7,586
|
That's what we did last summer, bought new home about a week before putting the old one on the market and it sold in 2 days. I used a heloc for the down payment on the new house. We had to lease back our house for 3 weeks until the new house was finished, but that avoided moving everything into storage.
|
|
|
06-09-2014, 09:20 AM
|
#4
|
Thinks s/he gets paid by the post
Join Date: Aug 2013
Posts: 1,660
|
Since it is an adjustable rate mortgage I would pay off immediately.
If it had been fixed I would lean toward investing it ( and make money over a long period with the spread).
Would not do any CD's as this will likely be a net outflow of cash to you.
|
|
|
06-09-2014, 09:21 AM
|
#5
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,263
|
Did the mortgage broker explain why? I suspect that perhaps the lender will clawback all or a large proportion of his origination fee if the loan pays off within 6 months and he would get less or nothing for the work he has done for you (which would seem to be unfair to him).
If you don't care about the relationship with the mortgage broker you could just go ahead and pay off. If you do care about the relationship with the mortgage broker, you could discuss with him. You may be better off to pay off and then separately pay him something for his services or make him whole on the deal.
My mortgage broker has done some fine work for me over the years so I would probably lean towards the latter.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
|
|
|
06-09-2014, 09:34 AM
|
#6
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2004
Location: SW Ohio
Posts: 14,404
|
Quote:
Originally Posted by pb4uski
If you don't care about the relationship with the mortgage broker you could just go ahead and pay off. If you do care about the relationship with the mortgage broker, you could discuss with him. You may be better off to pay off and then separately pay him something for his services or make him whole on the deal.
|
+1. You may not "owe" the mortgage broker anything (check the fine print), and the risk that some borrowers will pay off their loans very fast is probably something he/she accepts. But, if you value the service you received and think it was worth something, you can offer to compensate him/her.
|
|
|
06-09-2014, 11:21 AM
|
#7
|
Moderator Emeritus
Join Date: Jan 2007
Location: New Orleans
Posts: 47,472
|
I have nothing to add to the wise posts above, except my congratulations on selling your house so quickly! That is a seller's dream come true.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
|
|
|
06-09-2014, 01:37 PM
|
#8
|
Recycles dryer sheets
Join Date: Dec 2012
Posts: 59
|
Thanks for the replies, yes that is the deal, if I pay it off right away the broker doesn't get paid. I didn't think of that but I can offer to take care of him, that seems like a fair option.
|
|
|
06-09-2014, 02:32 PM
|
#9
|
Recycles dryer sheets
Join Date: Jul 2013
Posts: 385
|
I caution you to be very specific when you say "you will take care of him". I would not leave it open ended. If you want to be charitable, let him know exactly the amount of the donation you are giving him/her.
You should also check the paper work (if any) that you signed with the broker to make sure you have no obligation to him under his agreement if you payoff the loan. You probably don't but I would check to be sure. This is a business that relies on small print.
Perhaps this person is very nice. But his boss may not be. Make sure you understand your obligations (if any) before determining to be charitable.
Congratulations
|
|
|
06-09-2014, 02:33 PM
|
#10
|
Moderator Emeritus
Join Date: Sep 2007
Posts: 17,773
|
Congrats on your house selling so quickly!
A long time ago a refinance we did had a clause in it that we had to pay a fee for the complimentary appraisal retroactively if we paid the loan off before three years were up. No broker was involved, though.
Nice of you to consider the broker.
__________________
“Would you like an adventure now, or would you like to have your tea first?” J.M. Barrie, Peter Pan
|
|
|
06-09-2014, 03:26 PM
|
#11
|
Thinks s/he gets paid by the post
Join Date: May 2011
Location: St. Paul
Posts: 1,847
|
Am looking to buy before I sell. It is all nerve-wracking, and I'm glad to read this good news post.
|
|
|
06-09-2014, 06:50 PM
|
#12
|
Recycles dryer sheets
Join Date: Dec 2012
Posts: 59
|
Just wondering, if I did keep paying the loan for 6 months, where would you hold the sale proceeds?
|
|
|
06-09-2014, 09:01 PM
|
#13
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,263
|
Probably an online savings account.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
|
|
|
06-10-2014, 07:05 AM
|
#14
|
Thinks s/he gets paid by the post
Join Date: Oct 2008
Location: Naples
Posts: 2,179
|
I'm in the opposite situation of the original poster. Bought a new home (closed 2-28-14) and got our previous home listed by a Realtor. Moved into the new house three weeks ago. Still waiting for an offer on the old one. I think the average wait time is 90 days. In the meantime, we're paying on a mortgage and it's driving me nuts. I don't sleep good when I have something like that hanging over my head. Will pay off the new house as soon as the old one is closed. It's the waiting that is killing me.
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
Thread Tools |
|
Display Modes |
Linear Mode
|
Posting Rules
|
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is Off
|
|
|
|
» Recent Threads
|
|
|
|
|
|
|
|
|
|
|
|
|
» Quick Links
|
|
|