Cannot believe the interest rate I got on a 30 year.

[JeffKeryk]

I wish you all luck in paying off your properties, and I hope they appreciate.
Owning your own home is a great feeling.
In Silicon Valley, renting a room can be over $1,000 per month.
Renting a 3/2 house can be $6,000 in a good location.

Buying our house and paying it off was perhaps the luckiest thing that ever happened to me, after Sue that is.
Again, good luck. Keep up the good work!

 

[alarmguy]

Originally Posted by JeffKeryk
Minimizing interest expense is generally a good thing, especially if you consider it in a void. Except you don't live in a void.
If you pay 3% on a loan but can get 5% on an investment, you should at least consider balancing your output.
.....


An investment is speculation for a possible real or unrealized loss or gain. A loan is a real debt.
For the vast majority of people, putting a lien on your home to invest is not a good idea, it pretty much means that one got so desperate they were willing to risk their home with their family to speculate on an investment but were unable to do so using sound business principles and sound business borrowing principles/funding.

 

[alarmguy]

Originally Posted by pandus13
Originally Posted by alarmguy
Originally Posted by JohnG
Just read that many of the online sources, including Zillow and Trulia are advertising much higher rates because they are overwhelmed with the refi demand.

I don't really know how to get a true rate these days, but the lowest I've heard of lately was 2.65% for a 20 yr.




True rate? = walk into your local banks, 1 commercial bank, 1 savings bank and 1 credit union, you will be able to get the correct information face to face. Then if you wish you can compare to the stuff on the net.

All you need to find out is the rate and what costs are involved to get to the closing table.




Yes ^^ true cost of the loan is normally in the APR (regarding any points) vs the "interest rate". Its why I suggest people walk into the 3 above and go face to face for the true costs of getting the loan and agree, at the closing table.

 

[Kage860]

At 2.75% I'm interested in refinancing my 2 family house from my 3.87% mortgage. I would borrow as much money as possible with low rates, between rent and inflation there is a lot of money to be made. Dave ramsey is not a dumb guy, but his advice is to get you to the middle class. Many people get rich by borrowing money and investing it but dave ramsey got burned once and preaches a lot of fear. Ultimately, the guys who own the businesses have the debt (good debt), their workers in the business are the debt free ones.

 

[Andrew1972]

Originally Posted by alarmguy
Originally Posted by JeffKeryk
Minimizing interest expense is generally a good thing, especially if you consider it in a void. Except you don't live in a void.
If you pay 3% on a loan but can get 5% on an investment, you should at least consider balancing your output.
.....


An investment is speculation for a possible real or unrealized loss or gain. A loan is a real debt.
For the vast majority of people, putting a lien on your home to invest is not a good idea, it pretty much means that one got so desperate they were willing to risk their home with their family to speculate on an investment but were unable to do so using sound business principles and sound business borrowing principles/funding.




Agreed, there is risk in investing(eg right now!!!!!) and akin to borrowing against your home using loans as method. I hear people borrow to buy new car at "0%" then mention they take cash and invest. Risky especially with new car depreciation.

 

[alarmguy]

Originally Posted by Kage860
At 2.75% I'm interested in refinancing my 2 family house from my 3.87% mortgage. I would borrow as much money as possible with low rates, between rent and inflation there is a lot of money to be made. Dave ramsey is not a dumb guy, but his advice is to get you to the middle class. Many people get rich by borrowing money and investing it but dave ramsey got burned once and preaches a lot of fear. Ultimately, the guys who own the businesses have the debt (good debt), their workers in the business are the debt free ones.


Many people end up in the streets doing what you suggest. You know, I think maybe people should talk to others who followed his advice and live debt free and paid off their homes at 40 years old.
I dont think they will agree with you.
The richest man on earth, saved his money from his paper route, worked hard from the age of 12 and bought his first stock with $5000, he didnt borrow the money, then decide to work and pay it off.
He may not be the richest but still worth billions after donating close to or over 32 billion dollars so far.

BTW someday 2.75 might be a high rate or low, one never knows.

 

[alarmguy]

Originally Posted by madRiver
Originally Posted by alarmguy
Originally Posted by JeffKeryk
Minimizing interest expense is generally a good thing, especially if you consider it in a void. Except you don't live in a void.
If you pay 3% on a loan but can get 5% on an investment, you should at least consider balancing your output.
.....


An investment is speculation for a possible real or unrealized loss or gain. A loan is a real debt.
For the vast majority of people, putting a lien on your home to invest is not a good idea, it pretty much means that one got so desperate they were willing to risk their home with their family to speculate on an investment but were unable to do so using sound business principles and sound business borrowing principles/funding.




Agreed, there is risk in investing(eg right now!!!!!) and akin to borrowing against your home using loans as method. I hear people borrow to buy new car at "0%" then mention they take cash and invest. Risky especially with new car depreciation.


Glad I dont sound crazy *L*
We have become a nation of debtors, unwilling to work and save and then invest with spare money, we borrow first thinking we will always be able to pay it back. That thinking is dangerous and how people end up in the streets.

 

[Snagglefoot]

The Canadian bank rate was dropped by another 0.5% You can get a 5 year mortgage for 2.34 %

 

[Andrew1972]

That's great.

I am thankful for a 2.25% 15 year that I am 10 years into. 30 years is a long time hopefully you short circuit it.

 

[Kage860]

You are correct that there are many happy people who listen to Dave Ramsey. But, you brought up Warren Buffet. Stocks that Warren Buffet loves like mcdonalds and coca cola have billions of dollars of debt on their books. It takes capital to run a business, or buy property, build an electric utility, or a farm. So while dave ramsey says to avoid debt, he recommends buying stocks that contain lots of debt built into them. Some people are more responsible with debt than others, debt can be very dangerous in the wrong hands.

 

[JeffKeryk]

Dave Ramsey is for people who are in money trouble and/or do not know much about personal finance. They need help.
He has a 7 Baby Steps process, which can instill a basic discipline in people. Discipline is key; wish I had some...

Debt is nothing more than a tool; used correctly it will get the job done. Used incorrectly and you just might break something.
Debt makes the business world go around...

The problem I have with Mr. Ramsey's process is it operates in a void.
Every person and every situation is different.
The big thing he misses is timing and opportunity cost of money.
And investing in one's self, which is what i did. The economics becomes easy.

 

[supton]

2.6%, nice. I think I have 3.25%, not as good as the 3% I got in 2011 but not that bad. I'm hoping in a few years that we'll be able to make balloon payments but for now, it is what it is.

Hehe, I found some old papers while cleaning in the basement, and found some paperwork for my first car loan. I was 18 and wanted a better car. 17.996% APR on a 10 year old car? Sure why not.

 

[JeffKeryk]

Originally Posted by supton

Hehe, I found some old papers while cleaning in the basement, and found some paperwork for my first car loan. I was 18 and wanted a better car. 17.996% APR on a 10 year old car? Sure why not.


The best lessons are bought and paid for...

 

[alarmguy]

Originally Posted by Kage860
You are correct that there are many happy people who listen to Dave Ramsey. But, you brought up Warren Buffet. Stocks that Warren Buffet loves like mcdonalds and coca cola have billions of dollars of debt on their books. It takes capital to run a business, or buy property, build an electric utility, or a farm. So while dave ramsey says to avoid debt, he recommends buying stocks that contain lots of debt built into them. Some people are more responsible with debt than others, debt can be very dangerous in the wrong hands.


Your twisting or maybe avoiding the words, at least the way I am presenting them in my posts on this thread and turning the subject muddy.

Ill try again, = its silly and a good way to end up living in the street by using/risking the equity in your home to invest money or buy stuff you cant afford.
A low interest rate is not a good reason to take out loans using your home as collateral.

Sound mature business investments and consumer purchases rely on other sources, not the home with which you live in.

(no need for me to go into the subject of Mcdonalds and Coke and their debt vs cash flow which far exceeds their debt but does not come close to the subject or having a lien on your house to buy stuff and invest, Im talking about someone who commented about using money from a home for investments vs paying it off because the interest is cheaper, its very foolish)