Looking to refinance, FICO scores, and interest rate trends?

[Anonymous]

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incognitony wrote: Its been my experience that credit cards report the new balance when the new statement is cut. It may take a few days to update on the credit reports after that. The scores probably won't go up more than a few points until at least 2 or possibly all report.

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Yes, I think I was wrong particularly for routine things like monthly statements.  In this situation, the other two are the same bank and same closing date -- they should come in together in early December..

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incognitony wrote: Sounds like you did a good job getting your kids off the payroll.

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We scrimped, but in many ways we were lucky -- the right kids got born to us.

[IOBA]

Think of things from a different perpective...you kids don't need the money, and you and your wife will die in the house.

So, how do you feel about giving 35% of your income to line the pockets of big bankers?   

What would you do with an extra 35% in your pocket?  Would you and your wife go on a cruise?  Travel?   Indulge yourselves?

Freeing yourself from the mortgage (as well as the other debt) gives you more options, more money in your pocket, and deprives bankers from their extra large bonus checks.  Well, reduces their bonus checks because you are paying yourself rather than paying them.

The 35% figure is used just as an example.   I don't know how much your debt is of your income.   And if your house is paid off before you die, it makes things easier for the kids to settle the estate.   No one has to sit on top of the finances and figure out how to make the mortgage payments.   And who knows which kid will step to the plate and take over paying your bills.   If no one does?   Your house could be foreclosed on before  the estate is settled.  

[Anonymous]

IOBA

Again, thanks, but not sure that it works for us.

The property gets foreclosed on if we die?  You have not met my daughter.

The mortgage will get 20% of our fixed income even with our existing FICO scores.  And we have no credit card or installment debt.

And we are taking enough out to pay off that mortgage for 20 months -- assuming that our money earns no interest.

20 months is the short-run?  Yes, but at our ages it could also be the long-run.

What are alternatives?  A fifteen year mortgage with higher monthly payments?  15 years really is the long run.

Take out all savings -- majority of it now tax-deferred -- and pay off our mortgage?  That does not sound good to me.

I certainly appreciate everything you have said.  And it has helped me to look at some things from different angles.  But I just don't see that it fits us.

I

[incognitony]

If nobody in the family would want or need the house after your passing then maybe a reverse mortgage would be an oddball alternative.  I think the kids could stil buy it out anyways.

[IOBA]

keepstrying - I love your push back.     Tell me about your daughter, please.

You will do what is best for you.   Thanks for presenting the rest of us with the questions and reading our thoughts.

My parents did a reverse mortgage.  For them, it was wonderful.  For the five siblings - well, let's just say that as we know it, when mom and dad move to heaven, we have about 30 days (from what my parents understand) to clear out the house or settle the debt with the lender that did the reverse mortgage.   My parents could have misunderstood the terms.   And their lender doesn't feel the need to talk to us about the terms.   So we will wait and see.   But for mom and dad - it was a great option.  

[Anonymous]

Thanks to both of you for suggesting a reverse mortgage.  But I looked into that (not as carefully as I might of) and decided -- so far -- against it.

1. Despite everything I have said, my wife and I have a target for what we want to leave our kids.  To meet that target we have to leave them a big hunk of  equity.

2. I think the reverse mortgage terms are way, way  too stingy considering my wife and my ages and the equity in our home.  My immediate reaction when I first heard the specifics  was -- "you've got to be kidding."  IIMO if you have no choice, then yes.  Otherwise, there has got to be something better -- much better.

3.  When I hear how the kids are treated with a reverse mortgage when the parents die, then I am reinforced NOT to go with a reverse mortgage.  There is no way I am going to let some financial institution treat my children badly.  That is not going to happen.

My daughter.  She is sweet and charming and a wonderful mother and  sharp as a track.  But don't ever cross her.

[IOBA]