I’m getting a mortgage

[COcheesehead]

Is a 3% rate good though if a 10 year is paying 0.5%?

That’s not how I look at it. I look at it in comparison to what I can/am getting in fixed income, not a 10 year . I am buying 5-7 year muni’s for my bond ladder that the yield to worst is just over 2%. In my bracket that is closer to a 2.6% yield.
With a mortgage close to 3%, factor in the time value of money, tax deductibility and I quickly came to the conclusion that now is the time to borrow.

Do I want to give my builder a large 6 figure check right now or give my bank a small 4 figure check every month.

Easy decision.

 

[Teacher Terry]

DM, it’s a small mortgage at 100k but our payment is going down by 137/month. We don’t intend to pay it off because of the rate.

 

[jazz4cash]

I monitor rates at NASA FCU. The rates were 2.62/2.37 for 30/15 yrs until today the bumped up about .5%. Wrong way!!

 

[Jerry1]

I just got word that my application was accepted. I’m going for a ten year $100K loan and it came in at 2.75%. They locked it in today and told us it was scheduled to go up on Monday. We went through our credit union and they seemed to have the ability to be flexible. Like many, we’ve been living off aftertax money so can show no income. We knew this would be a problem so about a week ago we set up an automatic withdrawal to start on March 16th. That was good enough for them. Didn’t have to wait for three actual payments.

We have a major project at the house to fund so this will handle that and allow us to maintain a couple years of cash as opposed to basically wiping out our after tax accounts. The main advantage to me is not just the low interest rate, but since I budget (living expenses) on the edge of the 12% tax bracket, this will allow for tax planning/strategy without having to pay 22% on any other withdrawals.

Thanks for this thread. Reading about some of the issues in obtaining a mortgage helped me navigate this better and made my conversation with the loan officer go much more smoothly.

 

[kgtest]

Ya did good Jerry.

 

[Jerry1]

Ya did good Jerry.

Thanks.

Forgot to mention that closing costs will be rolled into the loan and will come in just under $4K. With 3/4 of a point here, title insurance there and an appraisal to boot, it adds up quickly.