Refinance to an ARM

Whoop04 said:

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He uses Christian guilt to get a lot of people that don't need his advice to follow it anyway.

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You just made that up...nice.

I'm a simpleton and would consider the following

1). How long do you plan to be in the house. If short time, don't waste your money, real estate and banks make all the money and love it when you buy and sell.
2). If a you will be there long term, consider property taxes, insurance, and all your bills.
3). I highly recommend a 15 year note if you buy. If you stay say 10 years, consider the equity difference.
4). Most people make plans to pay extra on the 30 year note, invest the difference, but most never do they just find other ways to spend it or waste it. Or after only 7 years or so they bail. The price to get a new house usually has went way up in the last 7 years and they have little equity so far. In North Texas the home prices have soared and it is unlikely your investments have beaten the difference in the increasing real estate prices.

The simple thing is if you plan to stay a while buy what you can afford on a 15 year note with 20% down while maxing out your 401K. I did the 15 year note and just paid it off. After you pay it off, property taxes in Texas are Hades. Mine are like 8K per year down the drain. So also consider you don't really every own your home.

Just like Ramsey says...if you take the 30 year loan to put extra money in investments, you are essentially borrowing against your house to take a stake (gamble in some senses) in the stock markets. I'm with Ramsey here....pay off the home ASAP, then when it's paid off you will have bookoo cash flow to invest if you want to at that point, or maybe say....buy a rental property for more cash flow?

Personally I don't like the volatility of the market these days. One breaking piece of news could send prices crashing or at least on a slump. Everyone is so gun shy and quick to sell. I have investments and I think you have to invest for a good retirement, but I'd rather own my home before taking risks in the marketplace.

Real estate is the most valuable asset if you know where to buy. Land is a finite commodity. As long as you are in an area with population growth you will always make money.

newmayne4 said:

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Just like Ramsey says...if you take the 30 year loan to put extra money in investments, you are essentially borrowing against your house to take a stake (gamble in some senses) in the stock markets. I'm with Ramsey here....pay off the home ASAP, then when it's paid off you will have bookoo cash flow to invest if you want to at that point, or maybe say....buy a rental property for more cash flow?

Personally I don't like the volatility of the market these days. One breaking piece of news could send prices crashing or at least on a slump. Everyone is so gun shy and quick to sell. I have investments and I think you have to invest for a good retirement, but I'd rather own my home before taking risks in the marketplace.

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Treat your house payment like an investment. If you'd been paying extra principal for the last two years instead of investing, you left a lot of money on the table. When the tables turn and the market goes down and you move to hold bonds, then you slam your extra money on the house note as you'll now be gaining a greater return on the mortgage.

Invest in bull markets and pay principal in the bear markets (generally speaking).

Yes

Here's to less than 10 years owed on my house. I refuse to buy into the idea that owing money on your home is some sort of investment.

The Wonderer said:

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Invest in bull markets and pay principal in the bear markets (generally speaking).

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Not sure I agree with this at face value. Wouldn't it be better to invest in a down market while stocks are cheap and to not buy in a market that's high?

Fundamentally, I believe in cost-averaging instead of trying to time the market.

BenTheGoodAg said:

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The Wonderer said:

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Invest in bull markets and pay principal in the bear markets (generally speaking).

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Not sure I agree with this at face value. Wouldn't it be better to invest in a down market while stocks are cheap and to not buy in a market that's high?

Fundamentally, I believe in cost-averaging instead of trying to time the market.

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I agree with cost averaging as well. The point that I was attempting to make is that in down markets, you can guarantee your returns because all factors are known with paying additional principle on a mortgage, whereas you don't know those things with the stock market (will certain companies survive? will they grow? where's the bottom? etc.). I probably should have qualified that if you are more risk adverse, you should dump on the principle in down markets because that is a guaranteed return.

Yes, I agree with your point

Don't overlook the fact that there are people out there that have money handed down to them, through family inheritance after a death or just gifts of some sort in general. There are plenty of people we know who based on what they do for a living that travel all the time, have homes and stuff that appear way out of their range. They got a head start - sometimes a really large head start and those kinds of things are game changers regarding your financial future. Either that or they are netting $0 month to month and I just can't imagine living like that.