For those who want to refinance..

[Bulls_Rose]

See comedy enti ante fed rate is 8+ but builders and mortgage companies giving 5-6 range . So no one stop buying homes. Unless they they found reality in  hard way. 

[shaktimaan]

7 minutes ago, Bulls_Rose said:

See comedy enti ante fed rate is 8+ but builders and mortgage companies giving 5-6 range . So no one stop buying homes. Unless they they found reality in  hard way. 

rate is always built in, they're not doing any favors

[pakeer_saab]

4 hours ago, Peruthopaniemundhi said:

I know most people who bought primary residence this year or late last year bought it in an intention to refinance. Here is my assessment, please help with your thoughts..

1. Fed may increase rate one more time

https://www.bankrate.com/banking/federal-reserve/how-much-will-fed-raise-rates-in-2023/

2. rates will be unchanged for 2024 (election year)

3. Hoping economy will be on positive direction we can start to see rates lowered by mid 2025.

4. Rates won’t just fall but the decrease will be steady which means to go from 8.5 to 7.5 to 6.5 to 5.5 takes 2-3 years..

so now, here is the scenario, most folks bought their houses with interest rates from 5.5 to 6.5. 
 

on a $600k home, 10% down, loan amount is $540k at 6% interest rate.
 

Please see two amortization schedules 

1. from 2023 to 2027, at 6%

2. Refinanced amortization schedule at 5% interest rates in 2027.

if you compare 2027 original loan vs 2027 refinanced loan there is $400/month decrease in interest rates but original loan contribution towards principal is high. So, in theory one could save $4000 per year if interest rates go down by 1% but loan refinance costs will be 1% of loan which is $5000. Then what is the point of refinancing? 

Next year it may reduce to 4% and that will be it. Again refinance by paying 1% of the loan.
 

I feel paying to principal periodically will help to lower the money going towards interest.

instead of buying unwanted items, second car (mostly Tesla), solar panels, investment homes. I think paying towards principal is a profit when you compare it for a period of 5-7 years from now. Please correct me if I am wrong. 

 

Loan amount

 

 

Loan term30 years20 years15 years10 years

Interest rate

 

Loan start date

Selected month: February 2023

 

Optional: Make extra payments

By adding extra payment, you can pay off your loan faster and save on interest.

SUMMARY

Number of payments: 360

Monthly payment

$3,238

Total interest paid

$625,526

Total cost of loan

$1,165,526

Payoff date

Feb 2053

• Chart
• Schedule

Amortization schedule breakdown

This table lists how much principal and interest are paid in each scheduled mortgage payment.

First payment

 

 

Last payment

Feb 2053

Date	Principal	Interest	Remaining balance
2023
March	$537.57	$2,700.00	$539,462.43
April	$540.26	$2,697.31	$538,922.17
May	$542.96	$2,694.61	$538,379.20
June	$545.68	$2,691.90	$537,833.53
July	$548.41	$2,689.17	$537,285.12
August	$551.15	$2,686.43	$536,733.98
September	$553.90	$2,683.67	$536,180.07
October	$556.67	$2,680.90	$535,623.40
November	$559.46	$2,678.12	$535,063.94
December	$562.25	$2,675.32	$534,501.69
2024
January	$565.06	$2,672.51	$533,936.63
February	$567.89	$2,669.68	$533,368.74
March	$570.73	$2,666.84	$532,798.01
April	$573.58	$2,663.99	$532,224.42
May	$576.45	$2,661.12	$531,647.97
June	$579.33	$2,658.24	$531,068.64
July	$582.23	$2,655.34	$530,486.41
August	$585.14	$2,652.43	$529,901.27
September	$588.07	$2,649.51	$529,313.20
October	$591.01	$2,646.57	$528,722.20
November	$593.96	$2,643.61	$528,128.24
December	$596.93	$2,640.64	$527,531.30
2025
January	$599.92	$2,637.66	$526,931.39
February	$602.92	$2,634.66	$526,328.47
March	$605.93	$2,631.64	$525,722.54
April	$608.96	$2,628.61	$525,113.58
May	$612.00	$2,625.57	$524,501.58
June	$615.06	$2,622.51	$523,886.51
July	$618.14	$2,619.43	$523,268.37
August	$621.23	$2,616.34	$522,647.14
September	$624.34	$2,613.24	$522,022.80
October	$627.46	$2,610.11	$521,395.34
November	$630.60	$2,606.98	$520,764.75
December	$633.75	$2,603.82	$520,131.00
2026
January	$636.92	$2,600.65	$519,494.08
February	$640.10	$2,597.47	$518,853.98
March	$643.30	$2,594.27	$518,210.68
April	$646.52	$2,591.05	$517,564.16
May	$649.75	$2,587.82	$516,914.40
June	$653.00	$2,584.57	$516,261.40
July	$656.27	$2,581.31	$515,605.14
August	$659.55	$2,578.03	$514,945.59
September	$662.84	$2,574.73	$514,282.75
October	$666.16	$2,571.41	$513,616.59
November	$669.49	$2,568.08	$512,947.10
December	$672.84	$2,564.74	$512,274.26

2027
January	$676.20	$2,561.37	$511,598.06
February	$679.58	$2,557.99	$510,918.47
March	$682.98	$2,554.59	$510,235.49
April	$686.40	$2,551.18	$509,549.10
May	$689.83	$2,547.75	$508,859.27
June	$693.28	$2,544.30	$508,166.00
July	$696.74	$2,540.83	$507,469.25
August	$700.23	$2,537.35	$506,769.03
September	$703.73	$2,533.85	$506,065.30
October	$707.25	$2,530.33	$505,358.05
November	$710.78	$2,526.79	$504,647.27
December	$714.34	$2,523.24	$503,932.93

refinanced at 5% Date	Principal	Interest	Remaining balance
2027
February	$615.52	$2,134.47	$511,658.48
March	$618.09	$2,131.91	$511,040.39
April	$620.66	$2,129.33	$510,419.73
May	$623.25	$2,126.75	$509,796.48
June	$625.85	$2,124.15	$509,170.63
July	$628.45	$2,121.54	$508,542.18
August	$631.07	$2,118.93	$507,911.11
September	$633.70	$2,116.30	$507,277.41
October	$636.34	$2,113.66	$506,641.06
November	$638.99	$2,111.00	$506,002.07
December	$641.66	$2,108.34	$505,360.42
2028
January	$644.33	$2,105.67	$504,716.09
February	$647.01	$2,102.98	$504,069.07
March	$649.71	$2,100.29	$503,419.36
April	$652.42	$2,097.58	$502,766.95
May	$655.14	$2,094.86	$502,111.81
June	$657.87	$2,092.13	$501,453.95
July	$660.61	$2,089.39	$500,793.34
August	$663.36	$2,086.64	$500,129.98
September	$666.12	$2,083.87	$499,463.86
October	$668.90	$2,081.10	$498,794.96
November	$671.69	$2,078.31	$498,123.27
December	$674.48	$2,075.51	$497,448.79

nee calculation chaala optimistic ga undi

economy better unte rates will increase kno

[pakeer_saab]

4 hours ago, Thokkalee said:

Niku chala opika undi bro… 

ippatlo refinancing cheyyadam kudaradu.. at least in the next 5 years.. even if the interest rates go low, they won’t go to prepandemic levels.. they may go to 5% or so in the next 5 years… if you consider closing costs and other expenses, it has to be at least 2% below your current interest rates for it to break even.. 

trump vasthe interest rates thaggisthaadu.. but if trump is contesting, most people will vote for Dems even if they don’t like the Dems choice of Biden… many ppl prefer the calmness of Biden admin than the chaos of Trump admin 

bidens calm economic storm is better than narcissistic better president antaavu

malli biden vaste, indians may have to go back in troves, India will boom and appear better than america

[pakeer_saab]

49 minutes ago, Jaggadonga said:

What's recast? If I don't refinance or recast, then will I end up paying more in 30 years?

caste gurinchi matladite bagodu.. malli you are saying recast.. shame on you

[Ravi860]

52 minutes ago, Jaggadonga said:

What's recast? If I don't refinance or recast, then will I end up paying more in 30 years?

I believe with recast you will still have same rate but emi will go down if you paid more towards principal. Do research more and also all lenders might not do this 
 

If you have high rate and don’t do anything obviously you will pay more in interests

[hunkyfunky2]

5 hours ago, Peruthopaniemundhi said:

I know most people who bought primary residence this year or late last year bought it in an intention to refinance. Here is my assessment, please help with your thoughts..

1. Fed may increase rate one more time

https://www.bankrate.com/banking/federal-reserve/how-much-will-fed-raise-rates-in-2023/

2. rates will be unchanged for 2024 (election year)

3. Hoping economy will be on positive direction we can start to see rates lowered by mid 2025.

4. Rates won’t just fall but the decrease will be steady which means to go from 8.5 to 7.5 to 6.5 to 5.5 takes 2-3 years..

so now, here is the scenario, most folks bought their houses with interest rates from 5.5 to 6.5. 
 

on a $600k home, 10% down, loan amount is $540k at 6% interest rate.
 

Please see two amortization schedules 

1. from 2023 to 2027, at 6%

2. Refinanced amortization schedule at 5% interest rates in 2027.

if you compare 2027 original loan vs 2027 refinanced loan there is $400/month decrease in interest rates but original loan contribution towards principal is high. So, in theory one could save $4000 per year if interest rates go down by 1% but loan refinance costs will be 1% of loan which is $5000. Then what is the point of refinancing? 

Next year it may reduce to 4% and that will be it. Again refinance by paying 1% of the loan.
 

I feel paying to principal periodically will help to lower the money going towards interest.

instead of buying unwanted items, second car (mostly Tesla), solar panels, investment homes. I think paying towards principal is a profit when you compare it for a period of 5-7 years from now. Please correct me if I am wrong. 

 

Loan amount

 

 

Loan term30 years20 years15 years10 years

Interest rate

 

Loan start date

Selected month: February 2023

 

Optional: Make extra payments

By adding extra payment, you can pay off your loan faster and save on interest.

SUMMARY

Number of payments: 360

Monthly payment

$3,238

Total interest paid

$625,526

Total cost of loan

$1,165,526

Payoff date

Feb 2053

• Chart
• Schedule

Amortization schedule breakdown

This table lists how much principal and interest are paid in each scheduled mortgage payment.

First payment

 

 

Last payment

Feb 2053

Date	Principal	Interest	Remaining balance
2023
March	$537.57	$2,700.00	$539,462.43
April	$540.26	$2,697.31	$538,922.17
May	$542.96	$2,694.61	$538,379.20
June	$545.68	$2,691.90	$537,833.53
July	$548.41	$2,689.17	$537,285.12
August	$551.15	$2,686.43	$536,733.98
September	$553.90	$2,683.67	$536,180.07
October	$556.67	$2,680.90	$535,623.40
November	$559.46	$2,678.12	$535,063.94
December	$562.25	$2,675.32	$534,501.69
2024
January	$565.06	$2,672.51	$533,936.63
February	$567.89	$2,669.68	$533,368.74
March	$570.73	$2,666.84	$532,798.01
April	$573.58	$2,663.99	$532,224.42
May	$576.45	$2,661.12	$531,647.97
June	$579.33	$2,658.24	$531,068.64
July	$582.23	$2,655.34	$530,486.41
August	$585.14	$2,652.43	$529,901.27
September	$588.07	$2,649.51	$529,313.20
October	$591.01	$2,646.57	$528,722.20
November	$593.96	$2,643.61	$528,128.24
December	$596.93	$2,640.64	$527,531.30
2025
January	$599.92	$2,637.66	$526,931.39
February	$602.92	$2,634.66	$526,328.47
March	$605.93	$2,631.64	$525,722.54
April	$608.96	$2,628.61	$525,113.58
May	$612.00	$2,625.57	$524,501.58
June	$615.06	$2,622.51	$523,886.51
July	$618.14	$2,619.43	$523,268.37
August	$621.23	$2,616.34	$522,647.14
September	$624.34	$2,613.24	$522,022.80
October	$627.46	$2,610.11	$521,395.34
November	$630.60	$2,606.98	$520,764.75
December	$633.75	$2,603.82	$520,131.00
2026
January	$636.92	$2,600.65	$519,494.08
February	$640.10	$2,597.47	$518,853.98
March	$643.30	$2,594.27	$518,210.68
April	$646.52	$2,591.05	$517,564.16
May	$649.75	$2,587.82	$516,914.40
June	$653.00	$2,584.57	$516,261.40
July	$656.27	$2,581.31	$515,605.14
August	$659.55	$2,578.03	$514,945.59
September	$662.84	$2,574.73	$514,282.75
October	$666.16	$2,571.41	$513,616.59
November	$669.49	$2,568.08	$512,947.10
December	$672.84	$2,564.74	$512,274.26

2027
January	$676.20	$2,561.37	$511,598.06
February	$679.58	$2,557.99	$510,918.47
March	$682.98	$2,554.59	$510,235.49
April	$686.40	$2,551.18	$509,549.10
May	$689.83	$2,547.75	$508,859.27
June	$693.28	$2,544.30	$508,166.00
July	$696.74	$2,540.83	$507,469.25
August	$700.23	$2,537.35	$506,769.03
September	$703.73	$2,533.85	$506,065.30
October	$707.25	$2,530.33	$505,358.05
November	$710.78	$2,526.79	$504,647.27
December	$714.34	$2,523.24	$503,932.93

refinanced at 5% Date	Principal	Interest	Remaining balance
2027
February	$615.52	$2,134.47	$511,658.48
March	$618.09	$2,131.91	$511,040.39
April	$620.66	$2,129.33	$510,419.73
May	$623.25	$2,126.75	$509,796.48
June	$625.85	$2,124.15	$509,170.63
July	$628.45	$2,121.54	$508,542.18
August	$631.07	$2,118.93	$507,911.11
September	$633.70	$2,116.30	$507,277.41
October	$636.34	$2,113.66	$506,641.06
November	$638.99	$2,111.00	$506,002.07
December	$641.66	$2,108.34	$505,360.42
2028
January	$644.33	$2,105.67	$504,716.09
February	$647.01	$2,102.98	$504,069.07
March	$649.71	$2,100.29	$503,419.36
April	$652.42	$2,097.58	$502,766.95
May	$655.14	$2,094.86	$502,111.81
June	$657.87	$2,092.13	$501,453.95
July	$660.61	$2,089.39	$500,793.34
August	$663.36	$2,086.64	$500,129.98
September	$666.12	$2,083.87	$499,463.86
October	$668.90	$2,081.10	$498,794.96
November	$671.69	$2,078.31	$498,123.27
December	$674.48	$2,075.51	$497,448.79

Thank you for the detailed info. In simple terms, the more interest you pay more for the next 3 to 5 years will never be recovered even accounting for possible property appreciation. 

Rental market is cooling down, there are many town home and single homes available for rent and get for 2 to 3 year lease. Try to sub lease portion of it if you can - possible where you have basement or 3 level townhomes. 

Cash is king now. 

 

[Peruthopaniemundhi]

4 hours ago, shaktimaan said:

rate is always built in, they're not doing any favors

Correct. Someone says 0 closing, others provide free appliances, some one else says 5.99 for first year, 6.99 for second year and from there on it is 8.00. So many builders are trapping buyers, in reality it’s all market selling tactics. 

[Manishican]

There is no guarantee interest rates will fall. Fed may cut interest rates some time soon but it can increase in the next month.

[bobby12345]

Next year they will cut rates…too many cracks…this economy won’t survive with out rate cuts …market is expecting rate cuts sooner than later 

[Skn_benami]

16 hours ago, Paamu said:

Own house anedi samanyudi kala. A kala ni inka kala gaane unchestunnaru e laddu lo politics tho. Institutions are buying the inventory and  controlling the price. Asalu a interest rates 1-2% cheste reaction ilaane untadi ani telsu kada. 

Not just institutions, your second, third home buying friends are playing a part too. 

[pakeer_saab]

2 hours ago, bobby12345 said:

Next year they will cut rates…too many cracks…this economy won’t survive with out rate cuts …market is expecting rate cuts sooner than later 

Fed will not always cut rates when market goes bad, it depends on many factors.

i see both Govt and Fed are overstretched as far as helping economy is concerned.

We have seen the longest period of low interest rates (<5%), I am afraid we will see at least 5 yrs of high interest rates (>7%)

If one has enough capital to survive such interest rates, they will come out just fine, those who didn't do their calculations will perish. 

BTW there will be plenty of apartments available for rent much cheaper than now

planning on optimism alone does not work in real world, Plan pessimistically and work optimistically.

 

[hydusguy]

20 hours ago, shaktimaan said:

Prospective buyers, plan your purchase and make sure you can afford it with a single paycheck. Anything can happen in life and your spouse might have to stop working for whatever reason

Enjoy life and don't trap yourself

own house kanna   townhouse rent better.. illu repairs aa loli undadi.

cash unte running income  generate chese investment is good 

[RPG_Reloaded]

17 hours ago, Maggavale said:

Yes. Sonu already million mansion lo undi troll posts anipisthayi renters meeda 😀. @RPG_Reloaded anna alter ego anukunta

[andhra_jp]

Employers added 336,000 jobs last month, sharply more than the 170,000 economists had predicted. Fed officials have been keeping a careful watch on the labor market as they try to assess how much more they need to raise interest rates to bring inflation under control, and how long borrowing costs should stay high.

 

So mostly FED will increase interest rates one more time this year emo...