Money Monday: Cash Out Refinance

Posted on January 29, 2013 // Leave a Comment

I’m having a major freak out because I’m in the early stages of getting my place ready to sell. The tenants have been given notice. I sold one of my beautiful velvet couches last weekend. Stagers and painters will be submitting bids soon. I was mentally prepared to make this the focus of my life.

Now the curve ball.

The reason I moved forward with selling my place is because I couldn’t refinance it. The last appraisal came in at an abominable $400,000 even though I paid $455,000 for it. I tried again last October with a different broker who guaranteed no fees and no appraisal cost. After the appraisal, I never heard back from the guy. I called, I emailed, nada. I figured the appraisal must have sucked again.

But miraculously, the company called me yesterday asking for a status since the broker I had been working with left the company. That’s why I hadn’t ever heard back. Looks like my appraisal came in at $500,000. It dawned on me (after clearing my mind and meditating for 10 minutes last night) that I should go for a cash-out refinance which will pretty much solve all my problems.

1. I won’t have to sell.

2. I can extract some of the equity in my home and use that for my next down payment.

3. I can reduce the rate and shorten the term to 20 years.

4. In 20 years, this is going to finance our retirement!

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Chasing the Low Refi Rates

Posted on October 18, 2012 // 1 Comment

I am trying to refi my place. My last refi was unsuccessful because the appraisal was low which put me underwater, which was upsetting because I don’t believe the comps supported such a poor price. So I am at it again. An appraiser came today and I’m very curious what his thoughts are. As a serial refinancer, my appraisals have spanned $400k through $600k. I swear if this doesn’t go through I’m going to sell my place and wouldn’t be surprised if I pulled in $550k which is $100k over what I paid for it. I’ve locked in a 3.5% rate for 20 years.

I constantly go back and forth on whether or not to sell my place.

I always think that if I hold on for 20 years when it’s completely paid off that we’ll get an extra $1,500 / month which is net of property taxes, HOAs, utilities, bills, maintenance, etc. What a nice extra cushion for us to retire on. But holding on means being a landlord which takes time, and time is money! Also I seem to clash with the owners on how to spend our reserves. I think we need to have our backyard completely landscaped, but at least one of the other owners disagrees. It is such an eyesore, no one wants to spend time back there, yet it has so much potential. Sigh.

And if I sell? Freedom! And a big chunk of cash back in our pockets.

I’m very confused.

Check out this graphic from my real estate agent. SF condo prices. Can I say…BUBBLE!

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Money Monday: Credit Scores

Posted on May 7, 2012 // Leave a Comment

This one’s for you Wally! Not that I know the answer, so I’m posing it to my readers.

Wally asked, “Since you post about personal finance, can you recommend someone to talk to me about credit card debt? I have zero debt. The reason I want to talk to someone is strategies to boost credit ratings.”

Well Wally, you and I are knit from the same cloth because I don’t have any credit card debt either.

Here are my scores:

787 Equifax

781 Experian

774 Transunion

Considering I don’t have any debt and paid off a significant chunk of my student debt, I’m perplexed my scores aren’t in the 800s. I am, however, a refi fiend and the numerous credit inquiries have resulted in my scores taking a bit of a tanking.

Anyone have any ideas on how to boost your credit score?

I don’t place too much weight on credit scores as long as they’re above average. Does it really even matter?

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Money Monday: Mortgage Shopping

Posted on April 30, 2012 // 1 Comment

For reasons I won’t disclose here, my most recent refi was denied. You can ask me offline for the details, but I made a stupid mistake which caused the reviewer to question my residency.

Back to the drawing board. I read in the news clips that Costco is now offering mortgages through a handful of stringently-screened brokers. OK, if you haven’t refi’d yet. This is it. This is the Kayak.com of low interest rates. Go to Costco.com, then search for mortgage. It’ll step you through a questionnaire, then spit out rates offered by their vendors. I am eyeing the 3% 15-year or the 3.625% 20-year offered through CapWest Mortgage. But if these vendors are backed by the Costco name, I’m sure they’re all fine. Those rates are for a condo with zero points. And the fees are around $1k. Hot damn.

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Budget: Extreme Makeover

Posted on October 18, 2011 // Leave a Comment

I’ve been crunching numbers non-stop lately.

It started when my tenant gave notice that he’d be leaving at the end of this month. Quick to Craigslist. What’s the going rate for a 1-bedroom apartment in Lower Pac Heights? I’ve been renting my place for more than two years, steadily increasing the rent with each new lease. But this time, I aimed a lot higher. The rental market is dot-com hot. I’ve got Googlers, engineers, doctors, interns, VCs emailing and calling. A New Yorker hired at Facebook told me he was contending with crowds of applicants at every open house. Bejesus! Instead of 20%, I should have increased the rent by 30%. I still would have had the demand.

With the rental money covering my mortgage, HOAs, and property taxes combined, I don’t want to be one of those un-disciplined Americans who takes that extra money and spends it. Like when we get raises, we adjust our lifestyle accordingly. No, I want to be fiscally conservative.

More research! Even before the tenant changeover, I have been eyeing mortgage rates, targeting a 4% or lower 30-year rate. Then a friend tipped me off to consider a 15-year. THANKS KITTY! I couldn’t seem to make the numbers work, but I kept on it. Determined to cash in on these low rates, I searched all the major banks’ websites for mortgage rates. I scoured the web. I looked at ING and First Republic. I called Residential Finance Corporation because they had mailed me a promotion. And lastly, I checked Navy Federal Credit Union who I used to refinance my private student loan. There it was, a 3.125% 15-year mortgage rate – right on the money.

A little bit of luck, ample social networking, friendship, a lot of research, and persistence. It pays.

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