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Refinanced house

Tia

Tia

TUG Member
Joined
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We recently refinanced our house for 10 years at 3.75%, was 5.25%, got a letter that Wells Fargo sold the Mortgage to Fannie Mae. Wells Fargo will still be the servicer. Thought it was interesting, must of not been enough interest for Wells Fargo to keep as they had for the last 15 years. It was a pain all the hoopla they put you through now days to refi.

Am thinking to make extra payments to pay it off as can't get 3.75% interest anywhere on money and not ready to put it into the market, just don't trust the market after the last several years. :(
 
Tia said:
We recently refinanced our house for 10 years at 3.75%, was 5.25%, got a letter that Wells Fargo sold the Mortgage to Fannie Mae. Wells Fargo will still be the servicer. Thought it was interesting, must of not been enough interest for Wells Fargo to keep as they had for the last 15 years. It was a pain all the hoopla they put you through now days to refi.

Am thinking to make extra payments to pay it off as can't get 3.75% interest anywhere on money and not ready to put it into the market, just don't trust the market after the last several years. :(
Click to expand...

It is common practice for banks to bundle mortgages and sell them on the secondary market. Doesn't change the terms of your loan.
 
Tia said:
Am thinking to make extra payments to pay it off as can't get 3.75% interest anywhere on money and not ready to put it into the market, just don't trust the market after the last several years. :(
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It certainly feels good to pay off a mortgage. :D
 
Agreed, Rose. We had a mortgage burning party last month. Nice feeling. We had planned it by refi-ing for 15 about 10 years ago and doubling up on principal when we could. The plan was to have it paid off when I retired, but my former employer had a different timeline. It's all water under the bridge now.

Tia, I sure can't speak to your confidence or investment objectives, but am curious about your statement about 'not trusting the market over the last few years?' The Dow has doubled in the 3 years since the market bottom in 2008. No one has a crystal ball to foresee the future, but the last 3 years have been pretty good and anyone who didn't recoup their losses from 2007-08 just wasn't paying attention.

Jim
 
Passepartout said:
Tia, I sure can't speak to your confidence or investment objectives, but am curious about your statement about 'not trusting the market over the last few years?' The Dow has doubled in the 3 years since the market bottom in 2008. No one has a crystal ball to foresee the future, but the last 3 years have been pretty good and anyone who didn't recoup their losses from 2007-08 just wasn't paying attention.
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Yes, I was surprised by this statement as well. My 401k has done fantastic in the last few years, and has more than just "recovered" from the crash in 2008. Way, way, way more than investing in a mortgage @ 3.75%.

But with that said, it is nice to get completely debt-free. We just refinanaced at 2.125% (5-year ARM, Wells Fargo), and plan to have it paid off in 6 years.

Kurt
 
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Yes, my stock investments have done much better than 4%, more than "recovered", but, I do understand wanting a Guaranteed Return, which you will get in paying off your house. And there isn't volatility in your plan vs the ever bouncing market.
 
The market value of my stock portfolio has done a lot better than the market value of my home over the last three years. The bright side to that is that we just got a notice that our real estate taxes should drop a bit this year.
 
I guess my trusting the market is more based on the economy,jobs, and news stories like MF Global.:shrug:
 
Tia said:
I guess my trusting the market is more based on the economy,jobs, and news stories like MF Global.:shrug:
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... more like being sold a bill of goods by the chicken-littles out there.

In case you had not heard, the enconomy and job market are improving, albeit slowly, which the market seems to think is actually a good thing.

MF Global and other scandals are nothing new. Investors who are out to make a quick buck with private equity and hedge funds will always be vulnerable. Average investors are protected as long as they invest in reputable brokerage houses.

Typical behavior is to get on the bandwagon after the market is toppy, and ride it down in disbelief, panicking and selling out too late. Then miss the turnaround, and stay out far too long, again.

Frankly, the best solution is not to worry about these oscillations, but to maintain a diversified portfolio, trusting that in the long-term, you'll be better off.
 
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Excellent advice, Talent. I refuse to listen to the hype, as I know over the long term a well-diversified portfolio will outperform almost anything.

After crash in 2008, I never had the urge to sell like so many of my friends and co-workers were talking about. In fact, the only change I made was to increase a couple of my automatic after-tax monthly investments a bit (I have always maxed out my 401k contributions). It was tough watching my investment accounts go down in value, but just 4 years later, I am so glad I didn't touch them!

Kurt
 
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I also had friends and co-workers around me get completely out of stocks back in '08 and they completely missed the uptick. Not sure what they've done since then, but I was able to recoup more than my losses and do nicely since then. Still not where I would like to be for retirement, but probably better than a significant % of people heading into retirement.
 
I too am glad that I had a wise person in my ear to sit tight regarding my investments. My 401k has had a 20.8% return since Jan 2010, which makes me happy. :D

Im only 33, so most of my investments are setup to be fairly aggressive.
 
I learned my lesson when I was young and dumber...sold at the bottom and missed the uptick. Never again. I make sure I'm well diversified and sit tight and if I have available cash, buy, buy, buy. Also, make sure you have enough of a cash reserve for your situation so that you don't need to liquidate in a down market.

Ingrid
 
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