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Heart or head ? sell thousands in coins to pay down mortgage to lower interest rate on home loan 2 %
barberlover
Posts: 2,228 ✭✭
In less then 2 weeks property tax statements are coming out with home values listed on them. In my state we are taxed on 100 % of a homes value to raise the most possible tax.
My current interest rate is 6.85 percent with 18 years left on a 20 year loan.
Here is the situation, I want to go to a 15 year fixed loan and the best rates for such loans I've seen are right around 4.75 %, but to get the best rate you have to have 20 % paid off in terms of loan to value. Unless my home goes up in value by 10 K I will only qualify for the best rate by raising 10 k, the only way without borrowing that I could raise 10k would be to sell some of my best coins.
I really hope it doesn't come to this but I might be faced with either selling some old favorite coins or passing up on saving over 200 a month on my mortgage.
So what should win out, my heart, or my head ???
Les
My current interest rate is 6.85 percent with 18 years left on a 20 year loan.
Here is the situation, I want to go to a 15 year fixed loan and the best rates for such loans I've seen are right around 4.75 %, but to get the best rate you have to have 20 % paid off in terms of loan to value. Unless my home goes up in value by 10 K I will only qualify for the best rate by raising 10 k, the only way without borrowing that I could raise 10k would be to sell some of my best coins.
I really hope it doesn't come to this but I might be faced with either selling some old favorite coins or passing up on saving over 200 a month on my mortgage.
So what should win out, my heart, or my head ???
Les
The President claims he didn't lie about taxes for those earning less then $250,000 a year with public mandated health insurance yet his own justice department has said they will use the right of the government to tax when the states appeals go to court.
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Go with your head,you can always buy coins.
I hate it when you see my post before I can edit the spelling.
Always looking for nice type coins
my local dealer
I remember when I bought my house. I sold alot of my collection, even though it wasn't much just to get the payment lower. I kept the coins that had special meaning but everything that could be replaced was sold. To me it was a no brainer. My mortgage now is easily made but I know in the future the taxes will rise and now I have a buffer zone that I know will close one day. There's one thing that will never go down and that's the taxes.
Me, I'd sell. As nice as it is to have nice coins there's nothing like a smaller mortgage payment and owning that house a few years earlier.
Tha'ts just my opinion...
Tom
Tom
You're now official, Bubba 4/24/04
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
San Diego, CA
On the other hand, your taxes will also increase more than you think.
"To have loved and lost is better than to never have had loved at all"
I would selectively sell the coins that I must to ensure my family's future, but I would take really good pictures first.
Just remember, the market is "White Hot" now, so you can get good prices on those coins and in a year or two when interest rates rise and people with ARM's need to liquidate coins at lower prices, you will be poised and ready to buy
What I'm trying to get at, is that a mortgage company will give you the best terms and will drop PMI if you have 20% or more equity in your home based on an appraisal of fair market value, regardless of what your town or county says your propery is worth. An appraisal by an certified appraiser should only cost a few hundred dollars, and their official report will be as good as gold to your loan officer. If you think your house is worth anywhere near what you'd need to put your equity at 20% of value, then don't sell your coins--yet. Get it appraised. Maybe you can have your cake and eat it, too.
--Severian the Lame
There will be more coins for you to buy over the years.
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Now he has an offer of $725.000.00 for the house and oh yeh he's selling it, buying one for less than half on the west coast of FLA and taking the extra to buy some coins.
Sell the coins.
TP
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
Whoa! Be careful. Last time I sold coins to finance a house Gerry wound up with the 1919-S Lincoln in 66RD!!!! Pains me to this day.
When you have less debt to service you can buy more coins.
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since 8/1/6
I kind of had the same situation.I happen to have a good friend thats a mortgage broker.My goal was to get the lowest interest rate also.What you could do is get a first mortgage that is less than the 80% loan to value mark allowing for the best rate and without PMI.Get a second ( equity line ) on the remainder usually no problem up to 90% of total value.These loan are usually variable,but the rates on them have been great.A lot of lenders will offer 1st year at a discount.This way you can keep your coins.If rates do start to rise quickly,which I doubt would happen to fast, then you could choose to your sell coins to pay down the equity line.This way you also can take advantage of the rising coin market.Hope this helps.
Randy
The Whisker Cheek Collection - Top 50 Peace VAM Registry
Landmark Buffalo Collection
Doesn't sound like the coins represent extra money.
I'd drop the coins while prices are acceptable, but keep "irreplaceable" items such as the first coin Grandpa gave you.......
It's almost like the PMI is renting you coins to look at.
I can't believe you even have to ask that question. necessities come first. On another note (no pun intended)...
Why do you want a 15 year mortgage? Yes, you'll pay a lot less in interest over the term of the loan, and yes you'll get another 1/4% or so off your interest rate, BUT from what I recall reading over the last year about your financial woes, wouldn't you do better cash-flow-wise with the smaller monthly payment of a 30 year loan? Crunch the numbers and see if a refi of another 30 year loan is cost-effective. My guess is the break-even point will be about 18 months.
My head almost always wins in situations like this but I will admit that the coins I have left after the ones I already sold last year to pay off a 401 k loan would really hurt, but family & practicality will win out in the end if their are no other options.
Berry a 30 year is not an option for us, I'm 47 & my wife is in her 50's. If you do the math, well... lets just say my wife has already said no to this.
Andy, depending on what happens I'll be in touch.
Thanks again- Les
I'm not sure what you are chasing but if you check the TOTAL cost of your Refinance chasing the lower rate may not be worth it. If you're chasing the $200 less per month and this would help out....divide the total cost of your refi by $200 & figure if the refi is the best thing for ya. (Don't forget about the 2 extra years!)
Don't feel like ya missed the boat cuz your rate is not as low as your neighbors because believe it or not sometimes its best to sit still & pay more monthly or as you can.
You have time to get the facts together; PM me if you wish. Its free
There are a lot of different deals out there. There are some tricks to reducing cost. Take your time.
A 2% lower rate is the time to look at it.
Having to stick an extra 10K to the equity kinda sucks.
An equity line is not a bad idea but it keeps the total monthly payment up there.
No $200 savings but you keep the coins.
I set up at a local show this past weekend and sold exactly $30,482 from my collection. I added that to another 10K I had in savings and paid most of my mortgage.
I still have $27,000 left to pay, which I think I can do in two years, vs the 18 years I to go had I done nothing.
There's still a few coins left to sell.
I feel pretty good about the decision, and look forward to starting fresh.
Anyone else really done it?
Stay liquid. Keep the money out of the house.
What's the point of paying off the house in 15 years?
<< <i>Won't you also save PMI by paying down to 80%? Sell the coins. >>
+1
You save $$$ on would be interest payments. If you have a $200k house, over 30 years you could pay $150k in interest, paying off in say 10 years would only cost you about $80k in interest saving you $70k.
you are and don't fret it. Inflation is coming, so you don't want to pay off tomorrows debt with today's
dollars. Otherwise: tomorrows dollars will be worth less than todays dollars by the amount of inflation.
Remember back when you could fill your tank for $20? and now it's $40? Well that's 100% inflation.
10 years from now your mortgage will be super cheap just the way it is. It may be pocket change.
So, don't take your hard earned dollars today and pay off something that is not even due for 10, 15
or 28 years.
Pay it all off or don't pay the fees and such to make such a little overall difference.
bob
<< <i>What's the point of paying off the house in 15 years?
You save $$$ on would be interest payments. If you have a $200k house, over 30 years you could pay $150k in interest, paying off in say 10 years would only cost you about $80k in interest saving you $70k. >>
Technically, that is true, but in the long run, it's a wash. The bank isn't giving you a great deal on a 15-year loan. They're making the same amount. Because money today is worth more than it is 30 years from today.
I'd rather keep the money in my pocket than in the bricks in the basement.
Yeah. Did it when everyone said stuff like "mortgage debt is good debt" and "interest only" was all the rage. Kinda went the opposite of the crowd... which has now worked *excellent* twice in my investing career, starting with Stocks in 2000.
Today I don't know what a mortgage payment is. I don't care what rates are. I completely could not care less what my credit score is. Not a bad feeling. Your results may vary.
<< <i>Consider a 30-year loan. A local bank is offering 3.25 percent, fixed (fees and crap, probably $3,000 or so ... and you can add that to the loan — you don't need any cash).
Stay liquid. Keep the money out of the house.
What's the point of paying off the house in 15 years? >>
A paid for home can offer a lot of peace of mind, especially if you have to worry about keeping a job or finding another job.
Another twist...take the 30 year note and pay it off like it was a 15 year note. You may pay a slightly higher interest rate, but in nominal terms, it won't be much, unless you have a big mortgage. Use an on line calculator to compare 15 year notes using the 15 year rate you get and the 30 year rate you get, but amortized over 15 years)
Benefit....if you can't pay your full mortgage one month on a 15 year note, it's a bigger monthly bill. If you can't pay the note on a 30 year mortgage it's a much smaller amount. Provides you with a lot of flexibility given your age.
I'm not a Financial Planner, but I play one on TV
Ike Specialist
Finest Toned Ike I've Ever Seen, been looking since 1986
Since then, I don't care about mortgage rates,
I don't pay any interest, and I sleep solid every
single night.
I'm glad I did it. I'd rather not pay any interest
than pay the interest and have a deduction.
That being said, I love the interest rate history.
An OT comment. What do you think would happen to the housing market if interest rates only went back to 4.5% right now?
siliconvalleycoins.com
Inflation is an enemy if you're an investor or borrower, but a friend if you're a debtor.
With today's ridiculous (artificial) interest rates and the tax break that comes from home ownership, having a reasonable mortgage isn't a dumb idea. It's almost free money and the reward for paying off the loan early is smaller. I'd certainly consider selling a collection to get into a house, but I probably wouldn't just to pay it off a bit early.
Knowing that I could get a mortgage at some point to pull money out gives me the peace of mind I need for it. I still have enough cash for my lifestyle (although the cost of furniture was a shock!) and new coin purchases so while I no longer have the much larger nest egg off cash to sit on, I'm at least not losing a few %/yr to inflation by having it sit in a non-interest checking account to remain insured.
type2,CCHunter.
<< <i>"the tax break that comes from home ownership" - such a myth!! If you have to have a mortgage, then yes, a liitle bit helps. But you still have to spend $12000 in deductable items (mortgage interest, taxes, etc) to begin to itemize. With no mortgage, you may only spend $6000 in property taxes and get a $12000 standard deduction, which with a 25% tax rate means you get back 50% of what you paid out while the person who itemizes gets back only 25%. But if it makes you feel better, you can give me the $12000 and I'll return $3000 to you at the end of the year, just like Uncle Sam >>
Maybe it doesn't help you in your particular financial situation, but for many people it is a huge benefit.