thousands before breakfast

[rmd]

There's something surreal about the home financing process. There I was this morning, sitting in a lawyer's office before breakfast, signing a bunch of papers to arrange for bank A to pay the lawyer nearly a quarter of a million dollars, directing them to send it to bank B to get them out of my life, and I promise to pay bank A nearly half a million dollars (if I make the standard payment every time) over 30 years. Anyways, interest rate is down under 5%, and if I keep paying the same amount I've been paying on the old loan, I should have it paid off a *whole* lot sooner than 30 years (more like 15); otoh, if I end up in dire financial straits, I have a way to grudgingly drop some monthly expenses lower in the short term.

Completely unrelated, I've been grooving on Longform.org which collects links to a whole bunch of really good long-form journalism pieces. Some really good stuff over there. I recommend starting with the editor's picks and going from there.

Comments

[cz_unit]

You're pulling a quarter mil in equity out? Cool!

C

[rmd.livejournal.com]

Yes! I'm going to spend it on vacations and high-end consumer goods!

No, I'm refinancing the main note, which is now about 230K

[cz_unit]

Oh ok. I thought you had run up a debt at BARGE for hookers and blow. I know I did....

:-)

[rmd.livejournal.com]

ha! nope, I ended up down for the trip, but not *that* down.

[deguspice.livejournal.com]

That's what I don't understand, why is it that you don't owe bank A what they've paid to bank B?

[rmd.livejournal.com]

i do, but with the power of compound interest i'd end up paying them a total of close to half a mil over 30 years if i made the standard payment every month. hence my eagerness to pay more than that, resulting in paying less total.

Refinancing now seems wise

[drwex]

Yeah, it's a lot of money overall but paying less of it than you would have without refinance is even better.

[flit.livejournal.com]

We did something a bit like this ourselves -- getting the house paid off earlier would be _great_.

It's surreal how much houses cost, too.

[be-well-lowell.livejournal.com]

Home financing *is* utterly surreal.

When we were (first) buying our (first) house, I kept thinking of the Monty Python "Cheese Shop" sketch. "You do *give* mortgages here, right?"