Need advice from a property appraiser

[BigCountry1689]

One of my biggest reasons for this right now even though it could wait is the FED is going to raise rates this year. If not twice at least once, they are saying that if the market continues to increase they are going to try in July and later in the year. While I don't expect a great increase this year I don't think we will see rates this low again. And I certainly could be wrong but my in-laws telling me how they paid 19% on there first mortgage when they were my age is enough to get me to get everything done now. These are the last big projects I see in the future. Yes...Yes.... I know there are always projects but I really want these done. I can afford it and if my plans stays on track I will have NO mortgage when I retire at 45YOA. As it stands after the REFI I still will be paying more for childcare then for my mortgage and the childcare at least is close to being over.

 

[MossRoad]

One of my biggest reasons for this right now even though it could wait is the FED is going to raise rates this year. If not twice at least once, they are saying that if the market continues to increase they are going to try in July and later in the year. While I don't expect a great increase this year I don't think we will see rates this low again. And I certainly could be wrong but my in-laws telling me how they paid 19% on there first mortgage when they were my age is enough to get me to get everything done now. These are the last big projects I see in the future. Yes...Yes.... I know there are always projects but I really want these done. I can afford it and if my plans stays on track I will have NO mortgage when I retire at 45YOA. As it stands after the REFI I still will be paying more for childcare then for my mortgage and the childcare at least is close to being over.

Back in 1985 we paid 3 points to get our 30 year mortgage down to 12.5%. That sounds like a lot, but our mortgage was $18,000.00 and a point was only $180, so an extra $540 at closing. :laughing: Our mortgage payment was HUGE!!!! $256.00 per month.

 

[MossRoad]

Child care and education can be ridiculously expensive.

$2.00 per hour for babysitting doesn't sound like much at all..... $2.00 per hour X 10 hours per day X 5 days per week X 50 weeks per year X 5 years = $25,0000.

Catholic school was about $3500 per kid per year here.... Preschool - 8th grade. $3500 X 10 years = $35,000.
Catholic high school averaged $6000 per year per kid.... $6000 X 4 = $24,000.
State college (tuition, room, board, books, travel, etc....) averages about $22,000 per year per kid.... $22,000 x 4 = $88,000.

So you got about $172,000 in care and education per kid.... oh, you have to do something with them in summer pk-8, so another 10 years of summer activities. And they have to be clothed and fed, too!!! :laughing: Each sport they play costs another $250 in shoes, bats, pads, gloves, helmets, and doesn't include transportation. It can get downright crazy..... and you want a house to live in, too? :laughing:

 

[MossRoad]

And cars, vacations??? :laughing:

 

[BigCountry1689]

Back in 1985 we paid 3 points to get our 30 year mortgage down to 12.5%. That sounds like a lot, but our mortgage was $18,000.00 and a point was only $180, so an extra $540 at closing. :laughing: Our mortgage payment was HUGE!!!! $256.00 per month.

That's the year I was born, not to make you feel old

 

[BigCountry1689]

Don't forget Ipads, Cell phones, All the shoes, Oh and lets not forget the scam that is diapers. $42.99 per box of pampers.

And the return on your investment at the end is "I Love You Daddy"

I wouldn't trade it for the world!

Might have to get rid of the dog and eat spaghetti Oh's by the time its all over but its worth it.

 

[MossRoad]

That's the year I was born, not to make you feel old

Heck no. I'm 55 and still don't know what I want to do when I grow up. :laughing:

 

[MossRoad]

One thing I'd encourage any young person to do is starting ROTH IRAs for yourself and 529 for college savings as soon as a kid is born. There's some debate about the benefits of ROTHs for college savings VS 529s as well, so look into the differences. Its amazing what $20 a week in a college fund will add up to in 18 years if invested in good mutual funds. And its amazing what 15% of your income in an IRA can turn into by 65. :thumbsup:

 

[BigCountry1689]

Florida has horrible public schools but great college programs, we have the Florida Pre-Paid College fund, for each child for the 2yr/State College, 2yr/University plan its $143 a month, it covers everything except books. I am very fortunate in that respect because my wife's aunt was a teacher so education was extremely important to her, so she pays for both children's college plan which takes a big load off me. I got very lucky that I married into a family that is very close, sometimes to close......But never less my only bill will be books which I know can be expensive but I think will be manageable, more than likely by then there wont even be books it will be digital. As far as ROTH IRA we have what's called a 457B managed by Lincoln Financial through my department. I get a 15% match on what I contribute up to IRS Maximum yearly. And the choice of PRE or POST tax. I opted for post tax because of the age which I will retire and I want access to that money if I need it. Everything else I put in savings when I get enough I transfer to a CD.

 

[MossRoad]

Sound like you got a plan. That's better than most!

 

[NorTracNY]

Although the poster may not have been as friendly enough for you to have an open ear to him, he was right to raise the concern. Managing cashflow was a big problem for many going into 2008. They saw the low interest rates and bound up their cast into their mortgages. It wasn't the housing collapse as much as the loss of jobs. They talk about the "stress tests" of banks now. The same is true for everyone. Lots of people have dual incomes, but the cash flow is important. IF you were to lose your job, both of you lose a job, one of you goes on disability, your investments drop, etc. How long can you survive?

If you're talking about refinancing because you're getting better rates on your investments than the mortgage rate, that makes sense. But if you can't cover a years worth of expenses from your easily liquid assets then you're at risk. I'm not looking to criticize, but just make sure you've thought about these things.

 

[BigCountry1689]

Although the poster may not have been as friendly enough for you to have an open ear to him, he was right to raise the concern. Managing cashflow was a big problem for many going into 2008. They saw the low interest rates and bound up their cast into their mortgages. It wasn't the housing collapse as much as the loss of jobs. They talk about the "stress tests" of banks now. The same is true for everyone. Lots of people have dual incomes, but the cash flow is important. IF you were to lose your job, both of you lose a job, one of you goes on disability, your investments drop, etc. How long can you survive?

If you're talking about refinancing because you're getting better rates on your investments than the mortgage rate, that makes sense. But if you can't cover a years worth of expenses from your easily liquid assets then you're at risk. I'm not looking to criticize, but just make sure you've thought about these things.

While I do share everyone's concern about finances, even those whose presentation is lacking. My savings and secure investments are enough to cover me for 2 years if it came to it. Though I never stated it my mortgage after the REFI is only $268,500 with a mortgage payment after insurance and taxes of just under $1600/Mo. And I have full intention barring any catastrophe of having it paid off by the time I am 45YOA. My bills fall well within my income leaving me a large net remainder. I have expenses that are voluntary that would go long before my house or any other financed items. I know many were frivolous with their finances and used there houses as a piggy bank for extravagances and then walked. I am very conscious of my expenditures and make sure I have access to money if it is needed. I very easily could have purchased a $400,000 house but instead I chose to buy a modest house and improve upon that. I also could fund the projects but I don't want to do that as it reduces my liquid assets. Now while I do see it as a calculated risk doing improvements that might place me further in debt and said improvements not being valued at the debt I have incurred I think that the risk is worth it for me. I know you had posed the scenario of a loss of job. I have maintained my debt at a level that would allow us to continue to function with only one or the other income (My wife just returned to work after having our second child she stopped working at 2 months pregnant). Not taking into account life insurance plans or disability plans we could still survive on one income, I obviously couldn't continue to send my children to $2100/MO worth of private school and traveling would be deleted, But levels of existence could be compromised on. We would not go hungry nor would we have to default on anything.

I do appreciate all suggestions relating to my fiscal awareness but I think I have clarified enough about the soundness of my finances...... :thumbsup:

***On the REFI, the appraiser came out today. He took all his photos, asked to see the plans for the new projects (Though they are not being considered in the REFI) and said he would have his report completed by Friday or Monday. He told me that he was "confident" that the value would come in where we needed it to.