36
Well "sane" is a pretty low bar... It's not a terrible plan, but it's not guaranteed to work in your favor.
If you are correct that the market is at a peak, then yes, you'll be better off paying the mortgage. But if the market goes up, then you'd have an opportunity cost.
The trade-off with paying debt versus investing is risk. You are effectively ...
22
I suggest you seek out other financing options and use that possibility either to get a better deal entirely, or else to convince your current bank that you will go elsewhere if not satisfied.
If your current mortgage prevents you from doing so without paying some type of penalty, you would need to weigh the penalty against reduced interest costs & cost ...
17
The requirement for appraisal is to avoid some of the problems that existed in the housing bubble in the mid 2000's. Some companies took shortcuts or they approved mortgages without requiring people to document income. In other cases appraisals were inflated. The idea was that as prices continued to skyrocket, there was always somebody to to sell a risky ...
17
This will depend greatly on your personal appetite for risk. From a strictly monetary point of view, you'd likely do better by investing in the market (although past performance does not guarantee future results). Paying off the mortgage gets you a guaranteed effective return of 3.675%, which is historically pretty low. Long-term investment in stocks would ...
12
There is no way the bank will see reason on this.
Have you ever made a special order at McDonald's, like, say, a Big Mac without pickles, and the cashier shoots you a dirty look? And you think, "What the heck? It should be easier to make a Big Mac without pickles than a Big Mac with pickles? You should give me a happy look and also you should charge me ...
10
By paying off the mortgage now you would be taking a "guaranteed" profit now in the form of reduced mortgage interest, but are forgoing uncertain equity investment returns
I'm going to split this answer into sections, because the topic is complicated. First I'll lay out a high level overview of the pros and cons of the options, and what I think you ...
7
I just refinanced with a much higher LTV than yours (75%) and no appraisal was done. Anecdotal for sure, but obviously it's possible. Furthermore, your Loan Officer should have the ability to cover some of your fees at their discretion (mine covered 100% of the fees so the refi was free.) I wouldn't be surprised if given your low LTV, that when presented ...
3
Without seeing the entire agreement it is impossible to say. Most buyers agent agreements have a clause that they need to be paid in the event that you buy any house in some time period after you hire them, because...well, because they want their money. (Although also to prevent buyers doing deals behind their backs). If yours genuinely doesn't then you may ...
2
One option is to pay down half your mortgage, but keep making the same monthly payments into the mortgage. This will shorten your mortgages greatly.
Not having a mortgage can be very good as reducing stress and opening up options. If this is life changing for you, then it may not be worth taking the greater risks of the stock macket.
1
Mechanically, yes, combining a floating rate loan with an interest rate swap is equivalent to a fixed-rate loan. There's not an exchange for these instruments, though, so you'd have to talk to your bank or broker to see if they have counterparties that trade these to retail investors (they are typically only traded between banks or investment funds)
...
1
Can this fee be interpreted as a "prepayment penalty" in legal terms?
It is a fee that is required in order to prepay the loan in full, so I
don't see how it couldn't be.
The $25 fee is not considered a pre-payment penalty. It is likely that the fee is disclosed in the Mountain of paperwork for the original mortgage. Or it was mentioned in a ...
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