| Welcome to The New Coffee Room. We hope you enjoy your visit. You're currently viewing our forum as a guest. This means you are limited to certain areas of the board and there are some features you can't use. If you join our community, you'll be able to access member-only sections, and use many member-only features such as customizing your profile, sending personal messages, and voting in polls. Registration is simple, fast, and completely free. Join our community! If you're already a member please log in to your account to access all of our features: |
- Pages:
- 1
- 2
| How low can you go? | |
|---|---|
| Tweet Topic Started: Jan 26 2013, 10:43 AM (772 Views) | |
| Jolly | Jan 26 2013, 10:43 AM Post #1 |
![]()
Geaux Tigers!
|
Interesting discussion occurring in another forum I frequent...Once one is debt free, how close to bill-free can you go? |
| The main obstacle to a stable and just world order is the United States.- George Soros | |
![]() |
|
| jon-nyc | Jan 26 2013, 11:12 AM Post #2 |
|
Cheers
|
If you lived itinerantly you could be 100% pay as you go, I assume. |
| In my defense, I was left unsupervised. | |
![]() |
|
| Jolly | Jan 26 2013, 12:00 PM Post #3 |
![]()
Geaux Tigers!
|
True. The less you have, the less it costs to maintain. The best I've seen, on the thread I mentioned, was $600/month. That was for a single family home, and one vehicle - utilities, insurance and taxes. The family was very creative in their use of solar power and water. |
| The main obstacle to a stable and just world order is the United States.- George Soros | |
![]() |
|
| VPG | Jan 26 2013, 12:14 PM Post #4 |
|
Pisa-Carp
|
Rent (gas,elec, A C, incl) Cell phone Land line Cable (couple prem.) Amex (2) paid almost the day they come in. Car Insur. twice a year. No other credit needed. I seem to have one of everything.
|
|
I'M NOT YELLING.........I'M ITALIAN...........THAT'S HOW WE TALK! "People say that we're in a time when there are no heroes, they just don't know where to look." Ronald Reagan, Inaugural, 1971 | |
![]() |
|
| Horace | Jan 26 2013, 12:44 PM Post #5 |
|
HOLY CARP!!!
|
Just closing a refinance today that lowers my mortgage + property tax + insurance bill to 1700/month. But what with my directv and netflix and iphone and gas and electric and hoa and water and trash bills I doubt I'd be competing. I have no debt other than the mortgage. |
| As a good person, I implore you to do as I, a good person, do. Be good. Do NOT be bad. If you see bad, end bad. End it in yourself, and end it in others. By any means necessary, the good must conquer the bad. Good people know this. Do you know this? Are you good? | |
![]() |
|
| ivorythumper | Jan 26 2013, 01:09 PM Post #6 |
|
I am so adjective that I verb nouns!
|
Congrats! We are getting a rate reduction through our banker of about 2%, which will save up about $5000 a year in mortgage interest. It took a lot of hoops to jump through (mostly P&L statements for our business and explanations of payroll) but it is a simple adjustment without any costs to us. |
| The dogma lives loudly within me. | |
![]() |
|
| Horace | Jan 26 2013, 01:25 PM Post #7 |
|
HOLY CARP!!!
|
Owning your own business sounds like a paperwork nightmare. God bless you guys. |
| As a good person, I implore you to do as I, a good person, do. Be good. Do NOT be bad. If you see bad, end bad. End it in yourself, and end it in others. By any means necessary, the good must conquer the bad. Good people know this. Do you know this? Are you good? | |
![]() |
|
| Axtremus | Jan 26 2013, 01:38 PM Post #8 |
|
HOLY CARP!!!
|
Congratulations to you too! Given the y% = $x datapoint, we now know how big your mortgage is. ![]() (I quote it as y% and $x just in case you want to delete the actual figures from your original post.) |
![]() |
|
| jon-nyc | Jan 26 2013, 01:44 PM Post #9 |
|
Cheers
|
It doesn't tell you that unless you make an assumption about rates before and after the 2% reduction and the years left. |
| In my defense, I was left unsupervised. | |
![]() |
|
| Axtremus | Jan 26 2013, 01:48 PM Post #10 |
|
HOLY CARP!!!
|
Oh, I just read that as "x-percentage-point reduction translating to $y annual savings in interest." What did I miss? |
![]() |
|
| jon-nyc | Jan 26 2013, 01:59 PM Post #11 |
|
Cheers
|
Sorry, my mistake. You need to know the remaining time on the mortgage only. |
| In my defense, I was left unsupervised. | |
![]() |
|
| ivorythumper | Jan 26 2013, 02:55 PM Post #12 |
|
I am so adjective that I verb nouns!
|
So tell me what amount did you calculate? And how do you know if we're on a 15 year, 20 year, 30 year, fixed rate or ARM, balloon or not, accelerated bi monthly payment schedule or not, whether part of that saving is over the insurance threshold, just how much I rounded out the numbers, etc? And wouldn't you also need to know how much we paid down from the original mortgage at the new+2% rate, since the savings is pegged at the new balance? |
| The dogma lives loudly within me. | |
![]() |
|
| Axtremus | Jan 27 2013, 12:42 AM Post #13 |
|
HOLY CARP!!!
|
Two percentage points ==> $5,000 a year in mortgage interest Principal = $5,000 / 2% = $250,000
|
![]() |
|
| jon-nyc | Jan 27 2013, 12:47 AM Post #14 |
|
Cheers
|
Ax - setup an excel sheet showing interest and principle by month for a 30 year mortgage. Look at the annual amount of interest paid in year 3 vs year 23. |
| In my defense, I was left unsupervised. | |
![]() |
|
| Axtremus | Jan 27 2013, 12:55 AM Post #15 |
|
HOLY CARP!!!
|
Thought about that; I'm betting that IT didn't bother with that when he wrote about the two percentage point reduction in rate leading to $5000 interest savings a year (i.e., he made the statement thinking only about the first year of his rate-reduced mortgage). |
![]() |
|
| jon-nyc | Jan 27 2013, 12:58 AM Post #16 |
|
Cheers
|
Clearly he was talking about a single year, but you still don't know where that year sits in the amortization schedule. Ergo you can't infer a balance. |
| In my defense, I was left unsupervised. | |
![]() |
|
| Axtremus | Jan 27 2013, 01:13 AM Post #17 |
|
HOLY CARP!!!
|
Technically, you are correct. As a matter of conversational shorthand, I'm betting on him talking about the here-and-now, this year, when the rate-reduction takes effect. |
![]() |
|
| jon-nyc | Jan 27 2013, 03:16 AM Post #18 |
|
Cheers
|
Of course he's talking about this year - but you don't know how long he's had the mortgage. Is 2013 year 5 of a 30 year amortization? Or is it year 12 of a 15 year? |
| In my defense, I was left unsupervised. | |
![]() |
|
| ivorythumper | Jan 27 2013, 09:25 AM Post #19 |
|
I am so adjective that I verb nouns!
|
What I actually wrote was "which will save up about $5000 a year in mortgage interest", which is a yearly calculation based on the reduced monthly payment which is based on the reduced mortgage interest due in addition to principle. The payment stays the same per month for the life of the loan, the ratio of principle to interest changes, and so with a lower interest rate the ratio shifts while the term stays the same. You would need to know the remaining term of the loan and the remaining principle payoff to be able to state what you did. |
| The dogma lives loudly within me. | |
![]() |
|
| Axtremus | Jan 27 2013, 10:03 AM Post #20 |
|
HOLY CARP!!!
|
@ jon (post #18) & IT (post #19) I am quite willing to admit that I have made a mistake if that is the case and I'd sure like to know what that mistake is and why it is a mistake ... I just took a very simple interpretation of what IT said about interest savings for him this year, the very same year the reduced interest rate takes effect. I don't see why I need to know what his original mortgage loan amount was, how many years he has had the mortgage, how his monthly payment was or will be apportioned before or after the reduction in rate, or how many hears he still has to service the mortgage. This year, without the 2%-point rate reduction, at he would have to pay $A in mortgage interest. With the 2%-point rate reduction, he would pay $(A-5000) in mortgage interest. Anyway I look at it, 2% translate to $5000 for him this year. Regardless of whether this is his 5th year or 16th year or 23rd year into a mortgage, 2%-point still translates to $5000 for him this year. If a 2% interest of some principal is $5,000 this year, then it follows that the principal is ($5,000/2%=$250,000) this year. From there, it seems reasonable to deduce that IT mortgage's principal balance this year would be ($5,000/2%=$250,000). No? I would very much appreciate it if some one can please explain to me why I need to know how many years he's into his mortgage and/or how many years he still has left on his mortgage.
|
![]() |
|
| jon-nyc | Jan 28 2013, 12:04 PM Post #21 |
|
Cheers
|
Because in a mortgage the payment is held constant and the proportion of principle increases greatly over time. Ergo the amount of interest you pay in an early year is much higher than in a later year. Thus the same 2% drop would result in a different savings in that initial year depending on where you were in the amortization schedule. I just worked up a quick spreadsheet showing two scenarios: (1) Year 3 of a 30 year mortgage. Interest rate drops from 5% to 3%. In that year (3) you'd save 5k of interest if the beginning balance was 260k. (2) Year 13 of a 15 year mortgage. Interest rate drops from 5% to 3%. In that year (13) you'd save 5k of interest if the beginning balance was 975k. If you'd like I'll email you the spreadsheet. |
| In my defense, I was left unsupervised. | |
![]() |
|
| Larry | Jan 28 2013, 12:07 PM Post #22 |
![]()
Mmmmmmm, pie!
|
It's called the Rule of 78s. Sure am glad I don't have a mortgage..... |
|
Of the Pokatwat Tribe | |
![]() |
|
| Mikhailoh | Jan 28 2013, 12:21 PM Post #23 |
|
If you want trouble, find yourself a redhead
|
I'd be happier if Ax would just mind his own business and not worry about how big a mortgage IT has. Mortgage envy.
|
|
Once in his life, every man is entitled to fall madly in love with a gorgeous redhead - Lucille Ball | |
![]() |
|
| jon-nyc | Jan 28 2013, 12:23 PM Post #24 |
|
Cheers
|
![]() Although, in Ax's defense this long since quit being about ITs mortgage and became about how much information is contained in the statement 'a rate drop of X% saved me $Y' |
| In my defense, I was left unsupervised. | |
![]() |
|
| Mikhailoh | Jan 28 2013, 12:30 PM Post #25 |
|
If you want trouble, find yourself a redhead
|
Can't tell much. |
|
Once in his life, every man is entitled to fall madly in love with a gorgeous redhead - Lucille Ball | |
![]() |
|
| Go to Next Page | |
| « Previous Topic · The New Coffee Room · Next Topic » |
- Pages:
- 1
- 2










12:39 AM Jul 11