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No Nicolaitans

Home Refinancing Advice?

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I'm no financial guru...I pay my bills, pay them before they're due, and pay extra on some.

We have a decent percentage rate on our house with less than 20 years to go on a 30 year mortgage.

I so often hear of people refinancing for a better percentage rate. I'm sure I could get a lower percentage rate than we have now, but like I said...we already have a decent rate.

So here's my question, and yes, I know it will probably sound naive...

What is the benefit of getting a lower rate when we have less than 20 years on our current mortgage? Wouldn't a refinance make us go back up to 30 years again? Yes, I know you can choose a 20 year loan or even a 15 year loan; however, wouldn't that negate the benefit of having a lower monthly payment? In my naivety, I just don't see the benefit of going back into debt for 30 years instead of paying what we owe for less than 20 years.

Am I missing something?

 

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Hello No Nicolaitans

I am also “no financial guru” at all; But right off the top of my head I see an advantage!

If you get a lower rate, you should be able to keep paying the same amount each month, but cut your years back a lot: Maybe getting your house paid off in half the time!
------------------------
But the real reason that I responded to your post is to preach a message.

Do you realize that all of the patriarchs in the Old Testament, lived in tents(tabernacles): And that it was Cain’s descendants that built the first houses or cities.  Therefore it appears that God’s people were led, to live in temporary shelters.

This could be to remind us, that the life we are living here, is just temporary.
Kind of like that old song,
“This world is not my home, I’m just a passing by...”
--------------------------------------------------
Please don’t get me wrong, I am not being critical of you at all: Nor am I saying that there is anything at all wrong with owning a home.

But this is just my opportunity to remind everyone, that the Lord wants us to keep our eyes on eternity: I believe that this is one of the reasons God gave the Jews “the Feast of Tabernacles”....... Leviticus 23:42-43
V.42 Ye shall dwell in booths seven days; all that are Israelites born shall dwell in booths:
V.43 That your generations may know that I made the children of Israel to dwell in booths, when I brought them out of the land of Egypt: I [am] the LORD your God.

When the Jews came out of the world(Egypt), God had then live in tents, when they were used to living in houses.  Now I know that there is more to this feast than this one point; Yet this is a valid point.
 
By the way, a “booth” is a “temporary dwelling place”: Today this could be a nice double wide trailer house, because this is definitely temporary.
------------------------
Now No Nicolaitans, please understand that I have no intention of derailing your thread: And the advice I gave you about getting another loan, seems to make sense to me; But I just had to share this.

 

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6 hours ago, Donald said:

Hello No Nicolaitans

I am also “no financial guru” at all; But right off the top of my head I see an advantage!

If you get a lower rate, you should be able to keep paying the same amount each month, but cut your years back a lot: Maybe getting your house paid off in half the time!
------------------------
But the real reason that I responded to your post is to preach a message.

Do you realize that all of the patriarchs in the Old Testament, lived in tents(tabernacles): And that it was Cain’s descendants that built the first houses or cities.  Therefore it appears that God’s people were led, to live in temporary shelters.

This could be to remind us, that the life we are living here, is just temporary.
Kind of like that old song,
“This world is not my home, I’m just a passing by...”
--------------------------------------------------
Please don’t get me wrong, I am not being critical of you at all: Nor am I saying that there is anything at all wrong with owning a home.

But this is just my opportunity to remind everyone, that the Lord wants us to keep our eyes on eternity: I believe that this is one of the reasons God gave the Jews “the Feast of Tabernacles”....... Leviticus 23:42-43
V.42 Ye shall dwell in booths seven days; all that are Israelites born shall dwell in booths:
V.43 That your generations may know that I made the children of Israel to dwell in booths, when I brought them out of the land of Egypt: I [am] the LORD your God.

When the Jews came out of the world(Egypt), God had then live in tents, when they were used to living in houses.  Now I know that there is more to this feast than this one point; Yet this is a valid point.
 
By the way, a “booth” is a “temporary dwelling place”: Today this could be a nice double wide trailer house, because this is definitely temporary.
------------------------
Now No Nicolaitans, please understand that I have no intention of derailing your thread: And the advice I gave you about getting another loan, seems to make sense to me; But I just had to share this.

 

I'm not sure that I get it. Are you saying that by refinancing, though the monthly payment would be lower, if I continued paying what I pay now, it would pay it off in half of the time? If that's what you mean, I just don't see it. Well, I understand the concept, but that's a best-case scenario I would think. 

When I was single, I had no intention of ever owning a home. In fact, after I was married, it was 10 years before we ever bought a home. I've lived on both sides...renting and owning. This may sound strange, but the reason we bought our home was because of our daughter's health problems...too much to try to explain. I personally see no advantage to owning...well...unless it's paid off. :nuts:

I also agree that we should keep our eyes on eternity. Though the children of Israel did live in booths in their wandering through the wilderness, and the patriarchs lived in tents, one of the provisions promised by God to the children of Israel upon entering the promised land was that they would inherit cities and homes to live in which they didn't build. Then again, they didn't have to "financially pay" for those homes though...:scratchchin:

While typing this and thinking over everything that you and I said...I think the obvious and best dwelling place we can have is whatever God provides. 

Thank you for your response Donald, and I apologize if I derailed your derailment. :coverlaugh:   You didn't derail anything. ;)

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Brother McWhorter,

In my opinion (for what it might be worth), the only useful reason for refinancing is to save money in "the long run."  Most of the time refinancing does NOT save you money in "the long run," but makes the bank money in "the long run" (which is the reason that banks push refinancing so very much).

So then, how does one determine? 

Comparison amount #1 = Take the amount of the original closing cost; add the total cost of the loan, including both the price of the house and the total amount of interest after the 30 year loan is completed. 

Comparison amount #2 = Take the amount of the new closing cost; add the total cost of the new loan, including both the new price of the house and the total amount of interest for the new loan; add the total amount that has already been paid for the first loan, including both premium payment and interest payments.

Then compare the two amounts.

A few years ago I purchased a house as a rental (that would also be an investment for retirement purposes).  Within just a year or so of the purchase, that bank was already offering a refinance with a percent or so lower than the original loan.  After doing all of the calculations, the new loan would have saved me just a few thousand dollars over the space of the 30 year loan.  Oooooh! Aaaaaah!  Was a few thousand dollars of savings worth the paper-work hassle?   Certainly NOT!!!

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Thank you Pastor Markle. You touched on a couple of things that I had thought of...my thoughts were...

  1. Banks want you to refinance for a reason, and it is to benefit them, or they wouldn't offer it. They're in the business of making money...not losing it. So a refinance is to their advantage. It may benefit the consumer under some circumstances, but the main benefit is for the bank.
  2. I've already done a comparison (of sorts), and I just don't see the benefit.

Thanks again brother.

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