Real estate General topic

[Sigarms]

Definitely. Paying off early is the best way to save, even if you're suffering the higher rates of a 30-year fixed mortgage.

Round numbers, borrow $500k at 3.5% for 30 years, you're looking at paying back $808k, so $308k in interest alone. Pay that off in just 15 years, and total cost drops to $643k... you just saved yourself $165k.

But if you believe you can swing 15 years, you can save even more by signing for a fixed 15-year mortgage, as their rates are lower. In that case, your total cost might be only $600k, or $208k saved over a regular 30-year fixed term.

The bigger part of the savings is what sigarms did, just paying early. But the additional $43k saved by dropping to a 15-year's rates isn't exactly throw-away money, either.

The numbers I'm using above are admittedly dated, but do well to demonstrate the point. I think I got my 15 year mortgage at 2.125% in 2012, and 30-year was running at least 1% higher, at the time. If the rates are higher today, then even more important.

We would have done a 15 year for the home and 6 acres. It was possibility of adding an additional 30 acres that had us scared. Reality is though we fell in the love the 37 or so acres more than the home.

Have to remember, we had to sell a house after we bought this house with 6 acres. Then, if we sold the house, we would buy the additional land.

Went to the doctor because I thought I was having a heart attack...

Did you change jobs in the recent past? YES
Did you have a life changing moment in the recent past? Getting married, YES. Buying a new home and having two mortgages, YES.

Doctor laughed. Still took the test, apparently wasn't a heart attack, but stress.

First 5 or 6 years, loved the land. Then for about 5 years after that, was regretting having that additional payment on the land. Now that everything is paid off, I am forever grateful the one word of advise people gave me... if you can afford it, they aren't making land anymore so buy it if it's with the home.

 

[ultrarunner]

My mortgage is 2.75 fixed and rule of 78,s 360 day yearly schedule where interest is front loaded and less as a percent as it winds down.

I’m getting 5% taxable from the bank on money I could use to pay off the mortgage which at this point in the loan is closer to 2%.

So keeping it for now.

 

[ericm979]

Paying off early is the best way to save

Unless your loan rate is well below the rate of return of your investments. Then it's better to invest the money instead of paying the loan down early. The long term average rate of return in the stock market is somewhere between 7 and 10% depending on how you count it. If your loan's 3% and you have a reasonably long time frame, its likely better to put that money in the market than into paying the loan off early.

Of course the market could go down, but so can the value of the house. Neither one is risk free.

It's probably not a common situation historically to have loan rates that low, but they were for a number of years not long ago.

 

[ning]

My mortgage is 2.75 fixed and rule of 78,s 360 day yearly schedule where interest is front loaded and less as a percent as it winds down.

I’m getting 5% taxable from the bank on money I could use to pay off the mortgage which at this point in the loan is closer to 2%.

So keeping it for now.

You may want to check the terms of that loan again - it's highly unlikely that you have a long-term loan that's rule of 78s as they've been illegal for loans over 5 years (actually 61 months) since '92 - so unless it was a 40-year mortgage you took out before 1992....

 

[ultrarunner]

You may want to check the terms of that loan again - it's highly unlikely that you have a long-term loan that's rule of 78s as they've been illegal for loans over 5 years (actually 61 months) since '92 - so unless it was a 40-year mortgage you took out before 1992....

No… it is my mortgage and it is 5 year term.

My monthly is $4500 with my last payment $4500.01 in 2026

I guess I have a 1 cent balloon on the last payment?

I was considering just paying it off this December but when I looked at the provided amortization table and what I was getting on the 12 month CD there really was not the incentive to retire it.

Dave Ramsey would not be happy but I am ok with having a single debt and it being a First Deed of Trust at 2.75 interest.

Is there something I am missing?

 

[paulsharvey]

Actually asked wife this afternoon, house tour 1, they have dropped the original asking by $60k (although they look the back 3.5 acres out of the offer), if they drop again, say another $20k, should we call and offer them our original offer again, with all 13.5. and no closing costs on them? She said, she was looking at it again, and kinda wondered the same thing.

Her turn off on that one, was, she didn't like the floors, in like 3 rooms, wanted to repaint through out, And no porches, no sheds, basically a home, a sand yard, and 13.0 acres of overgrown property. I kinda pointed out, if we save $50k on it, and spend $25k on whatever we want to do to it, we would still be money ahead.

If they keep dropping price, we might reoffer, BUT, only if we could get the whole 13.5.

At this point, they are asking $20k less for home and 10.0 acres than we offered for home and 13.5; and that 3.5 is just wet, overgrown, woods, backing upto a pine plantation.

 

[Sigarms]

Actually asked wife this afternoon, house tour 1, they have dropped the original asking by $60k (although they look the back 3.5 acres out of the offer), if they drop again, say another $20k, should we call and offer them our original offer again, with all 13.5. and no closing costs on them? She said, she was looking at it again, and kinda wondered the same thing.

Her turn off on that one, was, she didn't like the floors, in like 3 rooms, wanted to repaint through out, And no porches, no sheds, basically a home, a sand yard, and 13.0 acres of overgrown property. I kinda pointed out, if we save $50k on it, and spend $25k on whatever we want to do to it, we would still be money ahead.

If they keep dropping price, we might reoffer, BUT, only if we could get the whole 13.5.

At this point, they are asking $20k less for home and 10.0 acres than we offered for home and 13.5; and that 3.5 is just wet, overgrown, woods, backing upto a pine plantation.

Stick to your plan.

This was a modular correct? You might of mentioned it, but what is the asking price?

For all the looking around I've done, it seems like modulars are where the sellers are smoking the most dope because it has some land per asking price, at least in my area.

There was one in SC that had like 15 acres and they wanted 500k for the land with a modular on it. I looked at comparable land prices in the same town and would have been better off buying 5 acres and building...

 

[paulsharvey]

Stick to your plan.

This was a modular correct? You might of mentioned it, but what is the asking price?

For all the looking around I've done, it seems like modulars are where the sellers are smoking the most dope because it has some land per asking price, at least in my area.

There was one in SC that had like 15 acres and they wanted 500k for the land with a modular on it. I looked at comparable land prices in the same town and would have been better off buying 5 acres and building...

The original asking was $420k for the modular and 13.5; now they are asking $359 for the modular and 10.0.

I'm no expert, but I do try to follow manufactured home prices; and sure, there are some home by its self well over $300k; these we have looked at are available for $180-225k for the home.

I do get the convenience and all, and the easier fiancing; but I do have trouble understanding the Huge number of $40-60k 2 acres properties with a $150k manufactured, selling for $350+. I understand the added value of say a carport, or garage, or fencing; but that doesn't ads $50-100k of value to a package.

 

[ericm979]

Septic, well, driveway and foundation for the manufactured home all add to the value. Not needing to get a permit for putting in a new house can be valuable.

 

[2manyrocks]

The original asking was $420k for the modular and 13.5; now they are asking $359 for the modular and 10.0.

I'm no expert, but I do try to follow manufactured home prices; and sure, there are some home by its self well over $300k; these we have looked at are available for $180-225k for the home.

I do get the convenience and all, and the easier fiancing; but I do have trouble understanding the Huge number of $40-60k 2 acres properties with a $150k manufactured, selling for $350+. I understand the added value of say a carport, or garage, or fencing; but that doesn't ads $50-100k of value to a package.

It's problematic for any of us living elsewhere in the USA to really know what your local real estate market conditions are today. There are areas that are cooling off and some areas that maybe aren't, just yet. Whatever the local real estate market may be today, it could take a tumble if the economy falters and people in your area start losing their jobs.

I don't know how the seller set their original asking price or when they set it. Did they set it based on the top of the market when mortgage interest rates were 2%-4%? As for the 3.5 acres they've now decided to hold onto, how does that affect the use of the rest of the property? Is there a chance that the 3.5 acres could be sold to someone who will later do something that decreases the value of the 10 acre tract? Are these deed restrictions on how the 10 acres/3.5 acres can be used? (A local guy built a very nice brick house on his lot, but the lot right next door was sold to someone who put a house trailer on it).