Off Topic Poker Forums

Does anyone know anything about refinancing? I have a few options, and I'm not sure which one is best for my situation. Is it better to do a 30 year loan with low payments or to shorten the loan to 20 or 15 years, thus lowering the amount of interest paid? The 30 year obviously has the lowest monthly payments (a little over $200 less each month than now) and requires 7k at closing to bring my loan down to the desired amount. The 20 year monthly payments would be equivalent to my current payments and would also require 7k at closing. The 15 year would add $250 each month, but would only require 5k at closing.

What if I sell it in a few years?

I realize this probably hinges on when I plan to sell, but I have no idea. I'm content with where I live, and even though I may be looking to start a new job in the nearish future, I wouldn't need to move at all for it. The only thing I can see causing me to move would be a fantastic job opportunity somewhere else (unlikely) or if I were to get married (recently single so not happening in the near future).

Any advice is appreciated.

It depends on what are going to do with the extra money. If you plan to put the extra money in the bank and let it collect negative real interest then go with the 15 year.

On the other hand, if you are interested in investing then you should go with the 30 year because now interest rate is so low and I think it's criminal to not borrow from the bank. Remember money is not a number but a representation of your purchasing power. You can buy a whole lot more stuff 10 years ago than you can now with the same amount money -> paying 10k 10 years later is much better than paying 7k now.

Good advice, blah234.

I don't really have any interest in investing so any money I save would be sitting in my savings account most likely. So if I'm just going to be holding onto that money, you're saying I might as well pick the 15 year and put that money toward SOMETHING, right?

So if I'm just going to be holding onto that money, you're saying I might as well pick the 15 year and put that money toward SOMETHING, right?

Yeah you're better off building equity in your home (and paying less interest) than you are letting your money depreciate in a bank account.

I don't really have any interest in investing so any money I save would be sitting in my savings account most likely. So if I'm just going to be holding onto that money, you're saying I might as well pick the 15 year and put that money toward SOMETHING, right?

yes

I don't really have any interest in investing so any money I save would be sitting in my savings account most likely.

any particular reasons for this? Money doesn't need to be invested solely for retirement.

Ok cool. Thanks all. Now I just have to decide if I can afford the 15. At the very least, I will do the 20 since it's only $10 more than what I'm paying now.

any particular reasons for this? Money doesn't need to be invested solely for retirement.

Ignorance. I put some money into Edward Jones several years ago and lost money. I know it's a long run thing, but I simply don't like putting my $ places where I'm ignorant of the pros/cons. I do have my retirement savings being invested, but then I have my regular savings just chillin because I don't know any better.

Modulo the U.S.'s terrible fiscal future and dysfunctional government, you're much better off investing money in an index fund than a savings account. Index funds basically match the market as a whole, reducing volatility, and have some of the lowest maintenance costs.

And if the stock market implodes, everybody's going to be much much poorer regardless of where you invest your money.

you're much better off investing money in an index fund than a savings account.

I don't even know what that is or how to go about doing it.

And if the stock market implodes, everybody's going to be much much poorer regardless of where you invest your money.

Good point.

Depreciation in a random savings account is obviously not ideal, but I often feel that economists/finance guys (I study this myself btw) tend to overstate it for people that have no deeper knowledge of investing.

In the end its still better to save then to not save atall for fear of depreciation. Also longterm interest rate on a savings account is close to the longterm inflation.

In the current climate I've seen people advice others to pile on debt cause its all super cheap (Europe atleast) and you can outearn it just with inflation, in the end this isn't solid advice if you don't know what your doing and aren't active about it.

Just one last quick point, I'd much rather invest into solid company's with high dividend (admittedly in the US this is far and inbetween) then an index fund. In the current climate you can get dividend yields of up to 8-10% on lots of stocks in the dutch index.

I don't even know what that is or how to go about doing it.

Let's be perfectly honest with yourself and this is the best thing you can do if you're not interested in investing. Keeping money in the bank is safe and much better than donating it away on someone's investment advice.

And if the stock market implodes, everybody's going to be much much poorer regardless of where you invest your money.

this is not true. Look at John Paulson who became a billionaire during the recent housing market crash that also crashed the stock market.

Just one last quick point, I'd much rather invest into solid company's with high dividend (admittedly in the US this is far and inbetween) then an index fund. In the current climate you can get dividend yields of up to 8-10% on lots of stocks in the dutch index.

How do you look after companies which yield high dividends?