mortgages

[Mike Roncarati]

We have 23 years left on a 30 year mortgage and are contemplating adding that with our home equity loan and going to a 15 year mortgage. Wells Fargo contacted us to "see what they could do" Sounds like a no-brainer as we'd be paying about what we pay now for both, and save 8 years. We don't want to jump at the first bank and was wondering if anyone here uses USAA. Any thoughts would be appreciated!



Mike

 

[Jacob Dryer]

Not that you shouldn't do your research, but Wells Fargo was the lowest interest rate we could find when we refinanced about 9 months ago. Can't help on the USAA thing though..

 

[Tom Schindler]

Do the math yourself. If going to a 15 year mortgage increases your monthly payment, why not put that payment on your mortgage yourself and keep the lower payment.



I do not like having a monthly payment. So, I like to keep the payments as low as possible and then pay as much as I can afford on it. That way, if I come across hard times, I can revert to the minimum payment. If I were to refinance with a 15 year mortgage, my payment would go up to $700/month, instead of the $500/month we pay now.



I pay $750/month on my own as opposed to the $500/month. I will have it paid off even sooner, but if I lose my job or get sick, I only need to come up with $500/month instead of the $700/month. Plus I don't have to pay any closing costs associated with refinancing a house.



Something to think about...





Tom

 

[Gavin Allan]

I did home equity through USAA, then refinanced the whole mess into a 15-year mortgage thru USAA. All this in the past 18 months or so. I didn't get the lowest interest rates on either, but I did get flawless USAA service, which was worth it in my book.



Only advice is to watch the remodeling budget. I thought I could do for a lot less than what it actually turned-out, but it ended up costing me a lot more than I thought. However I am pleased with the result and not sorry that I did it.



Now, if I could just figure out a way to pay off this crazy 15-year mortgage and retire in about 8 more years....

 

[Jacob Dryer]

Caymen I hope you've done the math too.. Larger payments vs investing that extra amount over the long term. No right answer, just making sure you considered the alternative too..

 

[Mike Roncarati]

Great point Caymen, thanks. Problem is that it is a mortgage and a home equity loan, and the extra money I pay is to the HEL, so no extra towards 1st mortgage. Adding together and paying a net of $114.00 LESS than What I currently pay for both will save me 8 years and almost 50K.

 

[Richard L]

I refinance my old house down from 18 years to 15 years about 12 years ago and my payments went down by about $100 per month and I had 3 less years to pay on it. I paid off that house and in February I bought a brand new home that they just finished building.



Within a month of signing, my new home mortgage was sold to Well Fargo Home Mortgage, which was the same mortgage company I had for the last 5 years on my old home. I had great service from Wells Fargo and they processed the payoff on my old home in record time to free up my VA eligibility to use on my new home. That let me close on my new house a week earlier than originally planned. I got a 4.75% interest mortgage on the new house and I hear that you might be able to get a 4.50% mortgage now?



...Rich

 

[Mike Roncarati]

The numbers were based off of 4.5%, you are correct sir.

 

[Jim parnell]

mike, sounds like a no brainer if the closings costs, if any are reasonable, and you plan on staying in this house for a few more years. Try and beat Wells Fargo down on any closing costs if they really want your business or even another tenth of a % point helps as well.

 

[Thomas Rogers]

Did the same thing with WF 6 years ago. No closing costs...a great deal. WF is a class act.

 

[Mike Roncarati]

Thanks for all your help!

 

[Kevin Palmer]

I know several that have USAA and everyone one of them seem to love the service.



I know of one person that had a NIGHTMARE with them as well, but I do believe that this is not the norm from all I know of them.



Especially true if you are military. They are hands down the best there is for military personell...

 

[Mark Stadnicki]

I have both of my houses mortgaged with WF, great company. I also have USAA for everything else, banking, insurance and investments. USAA at the time wanted to much for closing costs, so I went with WF.

 

[Steven D]

Well if you can do that, it sounds definately like a no brainer. I used USAA for the mortgage on my current house, and to say the least, I will never, ever, ever, ever EVER, finance anything through them.



Getting the mortgage from them was the easy part. after we closed, nothing but problems. Like a typical mortgage, I had an escrow account for my home owners insurance (which was through them for a bit) and my property taxes.



Make a long story short, every month I would get a check from USAA stating an overage in my escrow account, then like clock work, 3 weeks later, I would start getting calls from USAA stating my escrow account had a negative balance and as such I owed x amount more on this months payment (which oddly enough was the same amount they previously sent me). after a lot of arguing and basically telling them to come get the house that I wasn't making another payment until the closed the escrow account, they finally did. I have closed all my accounts with USAA except my auto insurance, because their customer service is horrible at best. I also had issues with changing my wifes name on the title and finance documents after we got married.



About a month after we closed they sold the mortgage to GMAC, but I still have to deal with the tools at USAA for any issues on the mortgage. Since I closed the escrow account, cancelled my homeowners insurance, closed all my bank acccounts with them, I have not really had any issues.



I recommend not using them, as everything is great, until they get you signed, then they treat you like crap.

 

[Tom Schindler]

Caymen I hope you've done the math too.. Larger payments vs investing that extra amount over the long term. No right answer, just making sure you considered the alternative too..

I know where you are coming from. For me, preparing for the "unknown" is very important. As someone that "takes advantage" of those that do not prepare for the future, I try to keep myself from becoming the victim. I am not doing anything bad when I say "take advantage", but when the economy takes a dive, I have more disposible income than most have while times are good. When times are good, I lock up.



When the economy goes bad, I buy all sorts of things. All types of toys really cheap. When the economy goes good, I buy nothing because it all costs too much. I am working for a company that is hiring people left and right. All OT is available for anyone that wants it. When the news is reporting lay-offs, we are hiring another 20 people.



For me, not being controlled by monthly payments is a freedom in itself. If I want to spend 10 grand on a vacation, I have enough for 3 more the following week. To me, it is a freedom.



Paying off my mortgage sonner without following a schedule and not having the burdon of a high payment helps me sleep at night.



Of course, your results may differ.





Tom

 

[Richard L]

Caymen,

Wow, that is the most intelligent thing you have posted here in a long time.



I pretty much agree with everything you said, and that's kind of the way I live financially speaking. If you don't owe anybody, and you don't have to pay interest (throwing good money after bad) you have the freedom to do what you want, when you want, you can pay cash and don't necessarily have to worry about the price tag.



...Rich

 

[Jacob Dryer]

I meant paying more per month that is owed (larger payment) not a loan with a higher monthly payment required. If you are paying more every month on your current mortgage than is due that isn't giving you an oh s*** buffer at all.. If you invest it you can always pull the money back out earlier than planned to pay bills if needed. If you pay it in extra mortgage every month you have no way to get that money back.



Again not saying its right for you, but just wanted to clarify what I meant above which didn't seem like the same interpretation that you came to when posted. (Directed at Tom)

 

[Mike Roncarati]

Decided to stay with Bank of America. I've heard a lot of negatives about them as well, but I've never had a problem. 15 year, 4.5% no points. I thank everyone again for their responses, gave me a lot to think about.

 

[Tom Schindler]

Wow, that is the most intelligent thing you have posted here in a long time.

Actually it is that you came to your senses. I have been saying this same thing all the time.

I meant paying more per month that is owed (larger payment) not a loan with a higher monthly payment required. If you are paying more every month on your current mortgage than is due that isn't giving you an oh s*** buffer at all..

Actually it is. If I can afford a $1200/month payment, but choose to have a mortgage that is $800/month, I do have an "Oh S4!t" buffer. If I lose my job and have to take one that pays less than the one I have now, I am still obligated to pay the 1200/month if I had a shorter duration loan.



I know investing money can pay out more in the long run than paying off my loan sooner, but the generation my parents were raised in (not baby boomers) was about having crap payed off. My parents have more money stored away because they did not have a monthly payment to keep them down. They paid cash for cars, motorhomes, etc. A monthly payment is not something that was acceptable. This is many people in my parents generation are millionaires.



It wasn't by chance or luck. It was not by rolling dice in investments that may pay off or may lose everything. It was by good old fashoned saving money.





Tom

 

[Richard L]

Caymen

Actually it is that you came to your senses. I have been saying this same thing all the time.

Don't let my compliment go to your head. As most people here will testify, the majority of what you post here on other subjects is crap and BS. The fact that you made a wise statement about your financial strategy and nobody is disagreeing is proof that you are capable of rational and logical thought and I complimented you because I agree with you, but only on that issue.



...Rich