Now is a Good Time

We refinanced a home loan at 3.25% today, down from 4.6%.

I suspect a lot of people are going to have more disposable income over the next decade.

This is frequently one of the "problems" of a recession. People who need labor income the most are losing it while people who are privileged enough to be worrying about things like refinancing a home loan are doing better.

Nice! Congratulations!
Was it the same term length (e.g., 30 yrs —> 30 yrs) or with a shortened term (e.g., 30 yrs —> 15 yrs) ?

quote:

People who need labor income the most are losing it while people who are privileged enough to be worrying about things like refinancing a home loan are doing better.

Yeap, the renters get no such break. It’s unlikely that the landlord will reduce the rent just because the landlord refinanced to a lower rate.

No, we kept the 30 year term. Rates on 15 year are in the 2.8% range. But the slight gain there requires much bigger monthly payments, and when money is nearly free why do that?

On the landlord question, I would expect lower interest rates to have some effect on moderating rent increases over time. Interest is part of the cost structure of rental housing, and anything that decreases cost is likely to get passed along to consumers over time in any area where the market has some semblance of competition.

We're sort of doing it. It's not a full-on refi, but what they're terming a "mortgage modification." Basically we're lowering our rate, keeping everything else the same (mortgage company, etc.) and thus we can avoid the costs associated with a full-in refi and instead pay a flat rate.

Like you, we're sticking with a 30-year, and for the same reasons.

Ax, if it makes you feel better, mortgage rates on rental properties are much higher than on primary residences, and when we cost out the difference between today's rental rate and previous, it wasn't worth doing (we own half a duplex as a rental property).

We refinanced after about 5 years, but went from a 30 to a 15 since rates were so low and we could afford the larger payment. When our daughter entered college, we refi'd again on the 15 year term but kept making the prior level of payment. We just wanted the ability to go to a much lower payment on the much lower balance if we needed to. Paid the house off in about 20 years. I like being debt free.

Our loan on our first home (where we currently live full time in VA) was a 15-year from the get go.

There are certainly some advantages of going to 15. We decided to preserve the flexibility of lower monthly payments as the norm, but we can always pay down extra principal in any month where we feel like it. And we set up bi-weekly payments, which amounts to paying an extra month's worth of principal per year. That effectively shortens the term by about 8 years right there.

We have enough equity in the first place to get rid of the mortgage on the second place if/when we decide to relocate permanently.

I love having choices. That's what money is to me..freedom and choices.