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Leperflesh posted:I don't think I'm making any such confusion. A refinance is a payoff of an old loan and origination of a new loan. The "cost", under my definition (and I think everyone elses), is the fees involved in originating the new loan. My broker was able to find a loan offer that involved very low origination fees, and those fees were effectively counterbalanced by my partial FHA mortgate insurance up-front premium refund. So, I got rid of my old loan (at 5%), got a new loan (at 3.25%), and paid zero dollars out of pocket to make that happen. That's what I call "free."
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Jun 13, 2014 02:47
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Dik Hz posted:Out of curiosity, have you had any formal education in economics? This effects how I'm going to answer your question. I'll try not to read a veiled insult into that, so: not beyond a macroecon course in college. I am, however, fully aware of what the phrase "opportunity cost" means, including in the economic sense. What opportunity cost did I sustain by refinancing? If I had not refinanced, I would have 2 years fewer on my loan left, but it'd still be at 5%, and I'd still be paying an FHA MIP premium. There's no money that I spent that I would otherwise have had, to spend elsewhere, which would have been an op cost.
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Jun 13, 2014 03:14
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You refinanced at 3.25% for "free" when you could have refinanced at 3% for, say, $1000. So you're better off relative to your previous loan, but you paid the price of higher interest to get zero dollars out of pocket in the transaction.
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Jun 13, 2014 03:27
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slap me silly posted:You refinanced at 3.25% for "free" when you could have refinanced at 3% for, say, $1000. So you're better off relative to your previous loan, but you paid the price of higher interest to get zero dollars out of pocket in the transaction. I'm in the process of buying a house now, and the difference between a 4.125 and 4.25% loan was about $1600 at closing versus a $14 increase in monthly payments. Unless I knew for sure I was going to be there longer than 10 years, it just didn't seem to be a good deal to go with the lower rate - especially since we are depleting a large chunk of our cash savings for the down payment & closing costs already. All this is to say, I don't think it always pays off to buy down an interest rate. I'm not entirely sure of the difference in tax treatment of the origination fee vs higher interest rate either. If only the latter is deductible then it skews it more to taking the higher rate (we were only about $1000 short of itemizing last year).
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Jun 13, 2014 04:14
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Yoked posted:We had all our inspections today. We had a general inspector, pest, foundation and sewer. Although I was worried before that the foundation may be the biggest issue, it turns out that it is totally fine. The pest, general and sewer guys, however, found: I'm not sure if it varies by state to state, but would the lender even let the house go to closing without a clean wood destroying insect report? The sellers will have to handle that regardless if they want to close on the house ever. That issue with the sewer is disconcerting to me. Thankfully it's a raised house vs a slab, I suppose.
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Jun 13, 2014 04:41
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last laugh posted:Unless I knew for sure I was going to be there longer than 10 years, it just didn't seem to be a good deal to go with the lower rate Totally agree. There is a break-even point that depends on how long you will own it. And yeah, you have to account for the taxes to figure out where it is. But these are just more (unpredictable) factors that play a role in what the opportunity cost is in any given case.
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Jun 13, 2014 05:14
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slap me silly posted:You refinanced at 3.25% for "free" when you could have refinanced at 3% for, say, $1000. So you're better off relative to your previous loan, but you paid the price of higher interest to get zero dollars out of pocket in the transaction. OH! Oh. OK. Dick Hz. was all "there's no such thing as a free refi" and it didn't occur to me that what he meant was, a zero dollars out of pocket refi is one where you probably could have bought down the interest rate, but chose not to. I have no idea what it would have cost me to buy down the rate back then... I don't remember if I asked for those numbers. I was certainly prepared to pay a couple grand for the refi, so I think I was just delighted to not have to pay anything, and also delighted to have gotten to drop my APR by more than I'd been expecting. As it turns out, buying down my rate would have been a terrible decision, in the light of refinancing again now (and taking a higher rate) in order to get rid of MIP. Any cash I'd spent back then for a lower rate would be almost entirely lost money.
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Jun 13, 2014 06:20
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Heh, and you're talking to the guy who refinanced two years ago with a four-year break-even period and is now thinking about selling because the market is so good 
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Jun 13, 2014 06:24
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slap me silly posted:Heh, and you're talking to the guy who refinanced two years ago with a four-year break-even period and is now thinking about selling because the market is so good So this only makes sense, cents heh, if you plan on never buying again? Unless you expect a crash because your replacement will also be overpriced. I couldn't find a suitable replacement for my money pit even though I could sell for a hefty profit. Do never buy.
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Jun 13, 2014 09:09
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Leperflesh posted:OH! Oh. OK. Dick Hz. was all "there's no such thing as a free refi" and it didn't occur to me that what he meant was, a zero dollars out of pocket refi is one where you probably could have bought down the interest rate, but chose not to.
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Jun 13, 2014 11:29
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Elephanthead posted:So this only makes sense, cents heh, if you plan on never buying again? Unless you expect a crash because your replacement will also be overpriced. I couldn't find a suitable replacement for my money pit even though I could sell for a hefty profit. Do never buy. Would be moving to a different market with an even less predictable future  Do never
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Jun 13, 2014 16:17
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Dik Hz posted:Did you extend your term when you refinanced? Yes. I had just over 28 years left on the first loan, and I got a new 30-year loan. But the drop in interest rate means that even with the extended term, the total interest paid over the life of the loan assuming I made the normal payments, over both terms, was still less with the new loan.
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Jun 13, 2014 17:13
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I think I'm in a similar situation to you, Leperflesh. I was locked until my original close date of June 13th at 4.375%, but the sellers took the option to extend the close date to July 15th. My LO then informed me that to extend that rate to closing on the 15th would cost me $1,400. Otherwise, I can wait until the 23rd to see if rates are higher. If they are, I can pay the $1,400 with this servicer to lock in the lower rate, OR I can go with a slightly higher rate (4.5%) at no cost. The calculations that I did basically said that it would take me ~6.5 years of living in the property to break even on the $1,400 at closing. However, in my situation, I'm utilizing an MCC as a first-time homebuyer, which necessitates that we remain in the property for at least 9 years or be subject to a "recapture tax". So the question becomes a bit more complicated, though given that my break even on the $1,400 I'd spend to lock that rate at 4.375% would take 6.5 years and I am technically required to be in the house for 9 to avoid the tax, it would make sense for me to pay that cost. I think. I like my loan originator, he's been pretty helpful, but paying that rate to extend loving sucks and I also don't want to have to start over with a new appraisal and paperwork. Yuck.
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Jun 13, 2014 18:48
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So is giving the sellers the option to delay closing a new thing? I have never heard of that. I always give them the option of moving possession after closing for like $200 a day, but never actual ownership transfer day. Screwing around with the closing day screws so much stuff up including rate locks, payoff info, planned moves etc.
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Jun 13, 2014 19:44
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At the outset of the process, the sellers informed my agent and I that they could need an option to extend the closing date one month to find a new place to live, which I agreed to. The sellers had a bad experience in the past with a leaseback, which is why we didn't go that route. I didn't do my homework on rate locks (my own fault) and didn't realize I'd potentially have to pay a fee to extend the lock, but I was fine with the extended close because my apartment lease isn't actually up until mid-August. It gives me another month to build up my cash reserves a bit more and also allows me to gradually transition out of my apartment while avoiding a month where I would be on the hook for a rent-mortgage payment.
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Jun 13, 2014 19:50
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Dik Hz posted:Did you extend your term when you refinanced? Leperflesh posted:If I had not refinanced, I would have 2 years fewer on my loan left SiGmA_X fucked around with this message at 22:57 on Jun 13, 2014 |
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Jun 13, 2014 22:43
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couldcareless posted:I'm not sure if it varies by state to state, but would the lender even let the house go to closing without a clean wood destroying insect report? The sellers will have to handle that regardless if they want to close on the house ever. My realtor told me after the inspections were over that because a previous pest inspector had missed the insects that inspection company is on the hook for getting it cleared. We shouldn't have to pay for it, but I don't know what effect this will have on trying to close if the company or sellers drag their feet getting the house fumigated and sprayed. The sewer pipe is a little worrisome, and I'm really glad I added that inspection at the last minute when we were scheduling everything. A company went out today and gave us an estimate for the repairs: $5900. I would prefer that the sellers pay for this, but we don't know what their response is going to be yet.
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Jun 14, 2014 00:52
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Yoked posted:My realtor told me after the inspections were over that because a previous pest inspector had missed the insects that inspection company is on the hook for getting it cleared. That seems pretty dubious to me. Inspection companies are not in the habit of taking on the massive financial risk of missing something (and they constantly miss things, it's pretty much inevitable). This stuff is pretty clear in their language, too.
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Jun 14, 2014 06:00
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Yoked posted:The sewer pipe is a little worrisome, and I'm really glad I added that inspection at the last minute when we were scheduling everything. A company went out today and gave us an estimate for the repairs: $5900. I would prefer that the sellers pay for this, but we don't know what their response is going to be yet. We ran into a similar scenario with a house that we were looking at with the sewer which is why I urge caution. We did the plumbing inspection last and there was a broken pipe under the slab. Repairs were going to be a huge amount of money because it required hydro tunneling and whatnot to get to the source, and when we mentioned it to the sellers (who were already being really uncompromising and aggressive because this house was a quick flip for them) they denied it saying there was a crack found months ago but it was "fixed". We walked at that point. It was hard to because we dumped a lot of money into inspections, but we weren't gonna play hard ball with these assholes and the repair was a large one that I wouldn't trust them to "fix" again. Last I checked, the house was still on the market for the same price
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Jun 14, 2014 16:39
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Well the seller went with another offer. I'm told the one they went with only had a higher down payment which makes me think they're worried it won't appraise for what was offered and that the down payment will take up the difference. Is there any other reason a larger down payment is preferred?
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Jun 15, 2014 04:57
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Means less loan to get from the bank = more likely to get approved.
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Jun 15, 2014 05:13
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Yeah, our sellers were really happy about our down payment because they're trying to buy a house without a sell contingency on their current one because *those* sellers wouldn't accept that offer. They've asked us nicely to expedite everything we can on our side to make their bank confident that it'll sell. We've been happy to do it because they've been cool to us so far, and aside from a minor wording change haven't countered anything we've asked of them. It's also nice because we're basically done with everything at this point except to wait until closing in a bit over 3 weeks, so we can relax a bit. The point of that is it could be a similar thing where they're trying to buy another one and need to be confident it'll sell.
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Jun 15, 2014 06:48
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I have a question. My husband and I have been considering purchasing a home. I was looking at online listings and found something that is interesting. Not sure if it would work for us and I'm questioning whether or not it would end up being too much work for us to take on, but it's a pretty fantastic deal (LOL) and I'd like to look at it. We don't have a real estate agent, because we haven't really started the house hunting process (besides a prequalification from the bank so we had a general idea). The house is a foreclosed property (not a short sale or auction), so it's owned by the bank. Is it a bad idea to let the agent the house is listed with show it to us?
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Jun 16, 2014 19:12
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Yes. That person would be actively working against your interests in the transaction, yet will expect to "represent" you if you approach them like that. Do you have the number of dollars between the price of the house as listed and the price it should be, to use for fixing it up? Because that's probably how many you'll need. Unless you don't have much experience with this, in which case you'll need twice as many. Looking online is pretty useless anyway, you'll most likely need to check out a dozen or two places in person before you find something that will work. Especially if you're fishing in the foreclosure barrel.
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Jun 16, 2014 20:15
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slap me silly posted:Yes. That person would be actively working against your interests in the transaction, yet will expect to "represent" you if you approach them like that. Thanks. To be honest, I'm mostly just curious about the house. As I said, we hadn't seriously started looking yet. It's listed for about half the price it was originally listed at after the foreclosure. I'm guessing all the pipes have been stolen, at the bare minimum. And yeah, I've got renovation work experience and resources or we wouldn't be looking at old houses. I wasn't looking for foreclosed houses specifically, this one just came up on zillow, so I emailed the realty company for more info and a woman responded. I know you're not supposed to use the seller's agent, but didn't know if it worked differently with a bank owned property.
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Jun 16, 2014 21:27
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Finally got a house under contract and the inspection set for Wednesday! The location is a bit out of the way in SE Austin, but the area and house itself are nice. Lots of hiking trails in the area and a state park just down the road. I'm keeping my fingers crossed that more nice retail develops nearby. I better buckle my seatbelt... This roller coaster has only just started and I already feel like I'm going to hurl.
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Jun 17, 2014 04:04
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week 3 of house ownership postmortem : poo poo is expensive, we dropped like 4-6k in additional random costs between fixing up our old condo to sell, and misc poo poo to make our new place nice. I'd solidly recommend no one buy a house who didn't have 10-20k on top of their downpayment just sitting around ready to burn, or at least serve as a cushion for normal life expenses. Between moving costs, fixing poo poo up costs, etc, money flies out the door pretty quickly. that said, it's the best decision I've made since getting married. in a neighborhood in a hip part of town, all my friends are nearby, our house is awesome and no unexpected horribleness with house problems, lots of busy-ness/weekendprojects/manliness/grillouts/etc etc. #lovinit.
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Jun 17, 2014 09:50
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Back on the property hunt given our last offer fell through (Vendor originally stated he'd fix the roof and pay for it but he didn't want to incorporate in the contract and when it came to the last minute where we stated to reduce the cost of the purchase price and we'll fix it, he pulled out). We found a house that is exactly what we want and we are willing to pay the full asking price. We contacted the agent and the agent stated they aren't taking offers until after a viewing is done. The poo poo thing is the viewings are the following Wednesday and we're away on holidays from the Tuesday evening. We told the agent we're flexible and would be willing to come down any time before then but they're being reluctant to show us before the Wednesday. Obviously we don't want to lose out on this opportunity. Would going down there and speaking to the vendor/leaving a letter be too stalkerish/creepy? I figure our chances are 0% if we don't do anything.
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Jun 17, 2014 14:52
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Filthee Fingas posted:Back on the property hunt given our last offer fell through (Vendor originally stated he'd fix the roof and pay for it but he didn't want to incorporate in the contract and when it came to the last minute where we stated to reduce the cost of the purchase price and we'll fix it, he pulled out). I would ask your realtor. If you dont have one, I'd get one.
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Jun 17, 2014 17:57
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My file is through final underwriting, and is on its way to the escrow company. I give them money this week or next probably, close on the 26th, take possession on the first 
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Jun 17, 2014 20:35
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Been in escrow since October, the bank isn't going to approve the short sale so I'm finally trying to cancel, my realtor has been AWOL for over 3 weeks. On the other hand, it might be a lot of fun to just leave my deposit in escrow so if the bank actually forecloses on the sellers they can never re-sell it.
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Jun 17, 2014 22:53
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Update: looks like we've locked a 4.325% rate with $1,498.00 cash back towards closing. I expect the rate market to be really volatile for the next couple days or so as the Fed acts/doesn't act. If rates drop significantly we'll let our lock expire and get a new one, since we're not in any huge hurry. Expectation is that the refi will cost about $3k, with $1500 back so maybe $1.5k refi. Not bad. 4.35% is a bit higher than we were hoping, but buying down the rate would cost us enough that it'd take like 8 years to break even on the cost of the points from the slightly lower rate.
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Jun 18, 2014 18:27
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We're closing on our house next Friday, so I decided to give my realtor's "transaction coordinator" (read: secretary) a call today to make sure everything was set from their end. She seemed perplexed that I would ask her so far in advance, and after letting her know the closing date, she proclaimed "What?!?! I thought you were closing Aug. 29th!"  I have no idea why she would have thought that was our closing date. Nowhere in any document or email conversation that I've had with anyone around our upcoming house purchase does it state Aug. 29th. In fact, I have emails with her stating the date at June 27th, and my realtor knows of the closing date. I'm really baffled why his secretary wouldn't know the date if he does. He's even confirmed his attendance at the final walk through of the home, which I'd assume he had to book through his secretary somehow - otherwise, why have a drat secretary? Luckily, thanks to advice in this thread, I've been keeping on top of all other parties on my own. The lender is ready to go (appraisal came back today) and insurance is squared away. I guess I put too much faith in my own realtor to let his people know the closing date... Thankfully, I don't think they really have anything to do anymore in the process (except the getting paid part, which I don't care if they gently caress that up). I really liked my realtor throughout this entire process. It's a shame that something like this happened at the very end of my interactions with him and tarnished his image.
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Jun 18, 2014 23:41
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Lixer posted:Finally got a house under contract and the inspection set for Wednesday! Both the original furnace and water heater are past their normal life spans. Roof has minor hail damage so I think we're going to see if their insurance will cover it first. Other than that I just would want to spread some additional insulation around and replace some flashings. I'm not sure where to go from here as far as negotiation goes. I'd love to knock some $$ off the asking price, but I already bid under asking (which is almost unheard of in Austin right now)and I know they have other offers so I'm not sure they'd go for it. After searching for 2 years and finding this gem I'm prepared to buy the house either way and just put some of my savings towards the water heater and furnace instead of fun projects and a new stove. What might be a reasonable request? I'm not sure if it's good or bad that when someone tells me that it will cost 5k to replace the furnace that I shrug and think "That's not so much!" 
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Jun 19, 2014 02:15
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Kind of like your offer on the house, throw out what you want and see what they'll bite on. I got lucky with my last house where I basically put in every moderate to major item that came up in the inspection and the seller agreed to everything. As long as it's within reason i.e. not asking for a whole roof replacement for the minor hail damage, I think you'll be good to go.
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Jun 19, 2014 03:27
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Lixer posted:Both the original furnace and water heater are past their normal life spans. Roof has minor hail damage so I think we're going to see if their insurance will cover it first. Other than that I just would want to spread some additional insulation around and replace some flashings. The joys of a sellers market.
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Jun 19, 2014 03:29
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Lixer posted:Both the original furnace and water heater are past their normal life spans. Roof has minor hail damage so I think we're going to see if their insurance will cover it first. Other than that I just would want to spread some additional insulation around and replace some flashings. I don't think asking for money for the furnace and heater is a reasonable request. Unless something is odd or the seller misstated their age that was information you could tell from the units' labels, without an inspection. When I bought my house I looked at the furnace, water heater, and air conditioner and wrote down their ages and that factored into our decisions. I think if the inspection noted any issues with the units it's fair to ask for the seller to pay for a home warranty. I think it's fair to ask for problems to be fixed but not for the seller to make improvements. Then they have the opportunity to come back and agree to do the improvements (with a licensed contractor they choose), lower the price, and/or pay for a home warranty. Just asking for money, especially for something that existed when you made the offer, comes across badly. You have every right to ask for it, just don't be surprised if they refuse and you don't get anything else off.
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Jun 19, 2014 16:28
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Lixer posted:just put some of my savings towards the water heater and furnace. You should be prepared to pay for replacing either when you're buying a house, regardless of how old they are. Even if they're brand new and under warranty, the warranty may not transfer to you anyway.
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Jun 19, 2014 19:23
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shortspecialbus posted:I would ask your realtor. If you dont have one, I'd get one. Yeah after some discussions with the realtor, we managed to get a viewing on the Tuesday. So we're the only people with a viewing on the Tuesday and everyone else has a viewing on the Wednesday. When I was looking at the ad today, the link no longer worked. I called up the realtor to check (I was worried the vendor decided to pull it off the market) but it was confirmed that it was taken down from too much interest and not enough viewing times (theres a total of 34 viewings on it booked). The house is currently listed at £250k and under UK tax rules, 3% stamp duty kicks in over £250k (it's 1% at £250k and under). Our plan is to offer the full £250k (obviously if it checks out and it's as good as we think it is) and I'll mention to the vendor (vendor is showing us around on the Tuesday) that we'd entertain buying the white goods as well for their 2nd hand value. We figure that way if someone out bids us, they're paying a minimum £5k extra in taxes alone (I don't think the house is worth £260k+) and we were never willing to go over £250k to begin with. Filthee Fingas fucked around with this message at 12:49 on Jun 20, 2014 |
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Jun 20, 2014 12:47
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So we just had our inspection. We'll get the full report tomorrow, but nothing my dad and I hadn't already figured out. The biggest immediate issues it is looks like one of the lights has a problem connecting to the switch, as it goes on and off. And the water heater, furnace and air condition are all about 20 year old, so those will likely need to be replaced soon. Other than that, I have about ten different projects to handle over the next couple of years, but I'm looking forward to it. Now we just have to see if our basement is full of radon!
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Jun 26, 2014 20:38
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