WW Wednesday

VarunaTT

Is this week over yet?  I'm exhausted.

But, in very good news, K has gotten accepted into the nursing graduate residency program!!!  Basically it's a bridge program between college and full time nursing b/c the nursing field has a field drop out rate of like 50+% in the first 5 years.  So programs are being developed to address the problems.  I'm excited for them.

Otherwise, SSDD.

CharmedPam

Awesome news about K!  This is local I take it?  No moving involved?

So someone put a bug in my ear about refi-ing my home to fit in a remodel loan which could roll into my mortgage....and now I’m seriously thinking of doing that for my kitchen and a small add on. Anyone have any experience with this? @short+sassy you better not have taken the day off....

MissKittyDanger

@VarunaTT congrats K! Do they have a specialty portion or is this where it's decided? Exciting though


So humourous phase {I'm assuming it's a phase} right now. BabyKitten is the most friendly kid. Waving at people. No shame to ask people to sit on their laps {often with ulterior motives} but zero words.
Last night M and I went to the travel agency to get some info in regards to our potential trip in Feb 2021 to Mexico, but unfortunately since this was a last min plan we didn't have the stroller. Decided we'd just roll with the punches and let BabyKitten walk mostly.
She did great! She was amazed by the mall and loves escalators lol

While in travel agency she was puttering around while we chatted. At one point she wanders by the desk and the lady leans down to say hi. Waves and arms up to insinuate "up"
Lady obliges {BabyKitten is very good at being extra cute for strangers lol} and asks how old she is. We state she'll be 2 at the end of May. Lady says "oh she'll probably talk soon "
I - kindly - explain that BabyKitten talks a lot, just not while out and to strangers. The lady looks at us as if it's odd lol This kid literally talks so much, it's hard to explain this to other people who just see her as silent
BabyKitten then decided she had enough and got antsy, so I took her to the pet store.
Animals to her are:
Bunny = dog!
Guinea Pig = dog!
Dogs = *silence*
Birds = :O BIRB!! {literal jaw drops}

She loves chow mein noodles lmao M got Chinese food at the food court and BabyKitten made him share. She had about half lol

VarunaTT

It is local.  We had plans on moving to a larger city, but my parents are starting to hit that age where I'm going to need to be more involved in their daily activities.  K's only remaining grandparent is also hitting that very elderly and K doesn't want to lose any time with her.  So, for the foreseeable future, we are staying put.

The wing they're working in will be neurological and orthopedic.  It's not really the specialty they wanted, but they were super happy with their interview anyway and then got the offer the same day, so I'm pretty sure it's a great culture/person match.  It was funny, they were telling me about the interview (b/c they were beaming about it) and the call came in with the offer.  So they are kind of over the moon about it all.

ILoveBeachMusic

Awesome news @VarunaTT! Congrats to K.

I'm so ready for spring. I just changed my door wreaths to my spring ones and put out all my St. Pat's day stuff. I also removed the "evergreen" trees from the pots at the front of the house. They are no longer lit so they aren't really Christmas trees.

I just posted some furniture on Facebook Marketplace - Hope I get some bites!

levioosa

Great news for K! @VarunaTT. Having a bridge/new grad program makes it so much easier. 

SSDD. I was up until almost 11 last night trying to meal prep for the rest of the week. I’m trying to use this as my cycle week for eating more calories but it’s honestly kind of hard. I don’t eat a lot normally and when it’s all healthy food I feel like I’m just eating all the freaking time. At least I was off on Monday so this week feels like it’s going by super quick. 

kerbohl

With the time change this weekend and the slightly warmer weather, it is starting to feel like spring.  My bunnies are finally running around outside - we got a lot of snow last week and they just holed up inside refusing to get fresh air.  Now they are making up for lost time.
I keep forgetting about St. Patrick's Day, not that I'm a big into celebrating it, but because it is my reminder that my nephew's birthday is coming up ... I should send him a card out soon.

OliveOilsMom

Varuna - That's great news for K!  Such good karmic timing to have them call with the offer as K was telling you how great the interview went!

I'm happy with the Super Tuesday results yesterday!  And even better now that Bloomberg dropped out!  Uh, Tulsi, your press conference announcing the same is waiting for you!

DDs behavior at school has been so good lately!  I'm hoping this keeps up!  She is starting the preschool program full time tomorrow and she is so excited about it!  She is moving up with one of her current teachers and a few students.  She has also realized she can color during nap time and she loves it!  

We had a good night last night.  Got the last of the kitchen stuff done from DDs party, which mostly consisted of taking the leaf out of the table and moving it back into its spot.  I head to the dermatologist again soon to follow up for my mystery rash (the biopsy confirmed it was a bug bite) and my annual skin check.  But since I first went to the derm, I ended up with one more spot last Monday and another one started yesterday.  I have no freaking clue what is biting me!  It is all on the same arm too!  That is the weirdest part!  I think I just need to set fire to my house and start over again...

short+sassy

CharmedPam said:

Awesome news about K!  This is local I take it?  No moving involved?

So someone put a bug in my ear about refi-ing my home to fit in a remodel loan which could roll into my mortgage....and now I’m seriously thinking of doing that for my kitchen and a small add on. Anyone have any experience with this? @short+sassy you better not have taken the day off....

I perhaps need more info, lol.  I haven't quite heard of a bank loan product called that, but it wouldn't surprise me at all if something like that exists.

But, thinking like a bank, I'd guess you'd need to either already have equity in the house...that would be the BEST/easiest option to play with.  Or, if you don't have much/any equity, your upgrades would need to increase the value of the house enough so there would be more equity.  This option gets more into construction loan territory, which can get really complicated because there are a lot more moving parts and requirements.

What I am more familiar with is a cash-out refi.  Which is refinancing a property to get some money out of the equity it has.  And then you can use the money for whatever you want.

I assume you also want to refinance because you'll get a better interest rate?  Rates are pretty darn low right now!

However, if that isn't the case, there are easier/cheaper ways to get money from your house to do some remodeling.  But you need to already have equity in the house for either one.  Just to make the math easy, I'm going to pretend we are talking about house that has a $200K value and $100K in equity.  They are:

--Home Equity Line of Credit (HELOC):  This is product is basically a line that has your house as collateral.  As long as your Debt to Income (DTI) will support it, most banks will give you a line that is up to 70-80% of the value of your equity.  Some will even do 90%, if your credit score and DTI are stellar.  Not the total house.  Just the equity.  So, in my scenario, a borrower could request a HELOC of $70K-$80K.  Though they can also request less than that, if they want.  Most banks only charge a few hundred bucks to set up a HELOC, plus the appraisal fee (another few hundred bucks).  But it's also common for banks to waive some/all of that.  Refi fees are typically a lot higher.  And you need an appraisal for those also.

I love HELOCs because they are super flexible.  Once it's set up, it's up to you how much you take from/pay back on it.  Though there are minimum payments required when you have a balance.  You are also only charged interest on whatever the balance is.  In that aspect, it functions just like a credit card.  The interest rate is variable.  It's a fairly low interest rate, but not as low as a primary mortgage/refi would be.  So that is a downside compared to a refi.

--Home Equity Loan (HEL):  Similar to a HELOC, including the terms/fees/requirements.  Except it is a loan, not a line, for a specific amount.  With a set monthly payment and usually a fixed interest rate.  Though usually they don't have a pre-payment penalty and you can also pay down the principal faster, if you want to.  Similar to a primary mortgage.  I think a HELOC is a much better product.  The only advantage of a HEL over a HELOC is if interest rates go sharply high and stay that way for a long time.

CharmedPam

Thank you S+S!  Soooo helpful! I would think a cash out re-fi is what I want... my credit score isn’t stellar but not horrible either.  I did go into debt for my last surgery (and no regrets).... something to look into.  Guess I need an appraisal. I know I have equity in it - just not sure how much. 

short+sassy

CharmedPam said:

Thank you S+S!  Soooo helpful! I would think a cash out re-fi is what I want... my credit score isn’t stellar but not horrible either.  I did go into debt for my last surgery (and no regrets).... something to look into.  Guess I need an appraisal. I know I have equity in it - just not sure how much. 

Just don't get an appraisal ahead of time.  Your bank usually needs to be the one to order it.

But you can usually at least get a ballpark estimate of what your house is worth by looking it up on Zillow.

A few things to keep in mind with a cash-out refi.  You're often borrowing more than the amount on the original mortgage loan.  This will make your mortgage payment higher.  But hopefully it's a lower interest rate, so that will offset it some.  You're also probably lengthening the life of your "total" mortgage.  For example, let's say your original loan is 30 years and you are 5 years into it.  If your refi is also a 30-year loan, you're starting back at the beginning of 30 years.

CharmedPam

Thank you!  Thank you!  I hope to high hell zillow is accurate because then it looks good for me! I re-fi’d the house 3 years ago for another 30 yr mortgage so I’m really not that far into it. Only thing I want to improve is my credit score. 

Eta: how long do you think these good rates will last?  Do you follow patterns of when to refi? 

ILoveBeachMusic

@CharmedPam I hate to burst your bubble but Zillow can be really off the mark. When we were considering down sizing our realtor cautioned us trusting anything on Zillow. We had our house appraised and it appraised significantly lower than for what Zillow has it listed. If someone offered us what Zillow has it for, we could be out this weekend LOL!

CharmedPam

Dammit!  I hope redfin isnt accurate because I don’t like those numbers...

short+sassy

CharmedPam said:

Thank you!  Thank you!  I hope to high hell zillow is accurate because then it looks good for me! I re-fi’d the house 3 years ago for another 30 yr mortgage so I’m really not that far into it. Only thing I want to improve is my credit score. 

Eta: how long do you think these good rates will last?  Do you follow patterns of when to refi? 

Alas, for the bolded, I am not the right person to ask, lol.  I actually don't pay that much attention to interest rates because, in the grand scheme of things, they have been stable enough for years that they don't have too much impact on my monthly cash flow for investing purposes.

The only reason I know that they are especially low right now is I have two online friends on a FB money group that I'm part of, who are both looking to refi right now.  I also text with one of them and he was telling me over the weekend that he's looking at lowering his rate from something like 3.55% to 2.65%.  He's told me in the past that he has exceptionally good credit and, with rates like that, he must.  ((Insert)) me scowling at my phone out of nothing but pure jealousy.  I wish I had those kind of dilemmas, lol.

Zillow definitely needs to be taken with a major grain of salt.  It's most accurate in areas where houses are similar to each other, in terms of condition/age/neighborhood.  If you set up a Zillow account (free) and sign in as the owner of your house, it will usually let you dive deeper with more specific info on houses that have recently sold closest to you.  One of the most important factors is price per sq/ft.  For example, if a nearby comp house has the same number of bedrooms and seems to be in a similar condition to yours...but is 500 sq. ft. bigger (or smaller).  Figure out the price per sq. ft., then multiple that by the sq. footage of your house. 

Unfortunately, there isn't much you can do to quickly increase your credit score.  The only ways I know that will do it are:

--If there is any incorrect negative info (like late payments), write a dispute letter and mail (I think you can also e-mail it now) to the three credit bureaus.

--Decrease your credit card utilization rate.  Optimally to no more than a 25% utilization on all your cards.  This one does happen pretty quickly!  Usually in less than 30 days.  So easy!  Oh, you know, other than the chunks of money to do that, lol.  Unfortunately, the score goes down just as fast when the utilization rate increases.

If you have a free account with Credit Karma or Credit Sesame, they give a good look into the pros/cons of your credit report.

ei34

@ILoveBeachMusic I put my St. Patrick's stuff up too.  And straight to Easter decor from there.  Spring is so pretty.
@OliveOilsMom good luck/congrats to DD on her move up!!

I'm adjusting well enough to the new job.  Everyone is nice.  This afternoon were the return of the kids' swimming lessons.  I like them to go every year from like March-June, just to be ready for summer. 

short+sassy

@VarunaTT, congrats to K!  That is exciting news.

@MissKittyDanger, it's so cute and funny that BabyKitten was calling all the animals "dogs".  Except the actual dogs, lol.

charlotte989875

CharmedPam said:

Thank you!  Thank you!  I hope to high hell zillow is accurate because then it looks good for me! I re-fi’d the house 3 years ago for another 30 yr mortgage so I’m really not that far into it. Only thing I want to improve is my credit score. 

Eta: how long do you think these good rates will last?  Do you follow patterns of when to refi? 

Rates probably won’t go up for a while (as someone who works at a bank & does a lot of forecasting based on interest rates). This was a big rate cut and tired mainly to Coronavirus in order to increase confidence in the economy. Typically the Fed doesn’t cut then raise quickly, especially after such a big cut. I’d say they’ll stay low. It’s possible they get lower if there are big economic impacts of the virus (I’d say unemployment starts to increase or GDP growth slows) but if you’re looking to refi/HELOC it’s not a bad time. 

mrsconn23

@CharmedPam, I know what loan you're talking about.  One of my BFF's and BIL/SIL got one, but before they moved into their house.  You basically borrow more than the purchase price of the house because the remodeling costs are built in.  I believe that you can't borrow more than the appraisal value of the home, but there may also be a calculation of what the house will be worth once the updates are done.  It's been awhile since I talked to either them about it. 

However, I don't know about it being an option once you own the house and taken out the mortgage already. I think you have to borrow against your equity at that point. 

mrsconn23

YAY for K @VarunaTT!

MissKittyDanger

@short+sassy  all black and white cats are Angel {our cat} lmao I mean .... logic?

short+sassy

ILoveBeachMusic said:

@CharmedPam I hate to burst your bubble but Zillow can be really off the mark. When we were considering down sizing our realtor cautioned us trusting anything on Zillow. We had our house appraised and it appraised significantly lower than for what Zillow has it listed. If someone offered us what Zillow has it for, we could be out this weekend LOL!

For me, it's exactly the opposite, lol.  Or at least it was.

The last time I "upped" my HELOC for my personal home (3-4 years ago), my real appraisal came in at $312K.  Zillow had my house at something ridiculously low, like $220K.  Really?  A whole third different?  Any faith in Zillow was lost, lol.  But my personal home is also in an area with wide differences.  My rentals are in areas where the properties/surrounding neighborhoods have a lot more similarity with each other.  Zillow is relatively accurate for those houses.

Lately Zillow has been showing the value of my house at around $398K.  I wish.  Now I think they're way too high, lol. 

I've never looked at Redfin, but just checked them out.

Let's review.  Right now, today.  Zillow has me at $406K.  Redfin has me at $205K.  Exact same house with the exact same info, smh.  Sooooo...yyeeeaahhh.  And, looking at current comps, the real value is probably more at $340K-$360K.  Awesome!  I'm redoing my HELOC in a few months.  Long story short, primarily to lower the interest rate and the way my minimum payment is calculated.  But looks like I'll be able to "up" it again, also.  Sweet!

Redfin especially doesn't make sense.  The comps they're pulling are houses that are mostly smaller than mine.  And every single one sold for a good bit more than the estimate they're giving me.  Weirdos.  I don't know how they came up with that crazy low number.

charlotte989875

short+sassy said:

ILoveBeachMusic said:

@CharmedPam I hate to burst your bubble but Zillow can be really off the mark. When we were considering down sizing our realtor cautioned us trusting anything on Zillow. We had our house appraised and it appraised significantly lower than for what Zillow has it listed. If someone offered us what Zillow has it for, we could be out this weekend LOL!

For me, it's exactly the opposite, lol.  Or at least it was.

The last time I "upped" my HELOC for my personal home (3-4 years ago), my real appraisal came in at $312K.  Zillow had my house at something ridiculously low, like $220K.  Really?  A whole third different?  Any faith in Zillow was lost, lol.  But my personal home is also in an area with wide differences.  My rentals are in areas where the properties/surrounding neighborhoods have a lot more similarity with each other.  Zillow is relatively accurate for those houses.

Lately Zillow has been showing the value of my house at around $398K.  I wish.  Now I think they're way too high, lol. 

I've never looked at Redfin, but just checked them out.

Let's review.  Right now, today.  Zillow has me at $406K.  Redfin has me at $205K.  Exact same house with the exact same info, smh.  Sooooo...yyeeeaahhh.  And, looking at current comps, the real value is probably more at $340K-$360K.  Awesome!  I'm redoing my HELOC in a few months.  Long story short, primarily to lower the interest rate and the way my minimum payment is calculated.  But looks like I'll be able to "up" it again, also.  Sweet!

Redfin especially doesn't make sense.  The comps they're pulling are houses that are mostly smaller than mine.  And every single one sold for a good bit more than the estimate they're giving me.  Weirdos.  I don't know how they came up with that crazy low number.

Is your HELOC a fixed rate? Most are variable so if you extended would you be looking to lower the spread on your rate? Just curious, my team actually does the bank’s HELOC forecasting (among many other portfolios) so I’m interested in how people actually chose to extend/refinance. 

short+sassy

charlotte989875 said:

CharmedPam said:

Thank you!  Thank you!  I hope to high hell zillow is accurate because then it looks good for me! I re-fi’d the house 3 years ago for another 30 yr mortgage so I’m really not that far into it. Only thing I want to improve is my credit score. 

Eta: how long do you think these good rates will last?  Do you follow patterns of when to refi? 

Rates probably won’t go up for a while (as someone who works at a bank & does a lot of forecasting based on interest rates). This was a big rate cut and tired mainly to Coronavirus in order to increase confidence in the economy. Typically the Fed doesn’t cut then raise quickly, especially after such a big cut. I’d say they’ll stay low. It’s possible they get lower if there are big economic impacts of the virus (I’d say unemployment starts to increase or GDP growth slows) but if you’re looking to refi/HELOC it’s not a bad time. 

Thanks for the knowledgeable input!  ((Rubbing hands in anticipation))  OMG, I hope so!  I can't even tell you how outstanding that would be for me.  I'm coincidentally doing a lot of "loan shuffling" over the next 1-5 months.

-In about one more month, I'm doing a cash-out refi for two of my investment properties (not the rehab ones).  Paying off my credit cards and paying down my HELOC-->increase credit score dramatically.

-In 2-3 months, when the rehabs are done, I'm refi'ing the two duplexes we've been working on.  I need to get them out of their higher interest, short-term (12 months) bridge loan! 

-In 4-5 months...when my refi's are done and the two newest duplexes are fully rented out...I'm moving my HELOC to a different bank.  They have lower interest rates anyway.  Even better, if they start out lower.  But I've noticed my current HELOC's bank actually does change my rate fairly often to "match up"...both up and down...with what the Fed rates are doing.  They've changed it 4-5x in the last 12 months. 

--------------------

Edited: @charlotte989875, I was posting this response and then saw your next post, lol.  Yes, my HELOC is a variable rate.  I've talked to a couple banks about moving it.  They are variable rates also but, across the board, have lower interest rates.  More importantly, the minimum payment is "interest only".  Most banks do have an "interest only" minimum payment on HELOCs.  But my current HELOC bank has principal and interest in the minimum payment (I'll get to why that has become important to me below).  They're 10-year lines and are amortized as such.  That's one term I've always found to be the same across all banks.

This is probably way more info than you want to know, lol.  But since I have been forced to become an expert on HELOCs for my own good, here ya go:

Keep in mind, I use my HELOC pretty differently from the average person.  I primarily use it for down payments on my real estate investing.  My typical "MO" is I'll pay it down until I get to a place where I have enough for my next down payment and then start hunting for another property.  Though I also keep enough credit available on it for it to be "oh s**t" resource, lol.  Like if I need a major repair.

So the more money I have available to me on it, the better.

But here's a "catch" I find out about HELOCs last year when I was looking to get my duplexes financed.  I don't even think most loan officers know this because I've talked to many over the years and this was the first time one of them told me this.  When calculating the Debt-to Income ratio, underwriting computes the minimum payment as if my HELOC were maxed out.

OMG, lightbulb!!!!  I kept being so BAFFLED as to why my Debt-to-Income (DTI) was just a bit too lopsided to qualify for the typical Fannie Mae/Freddie Mac loans.  Because it wasn't!  I knew it wasn't.  Yet for years I kept being told, "Oh, you're SO close on the DTI, but it's not quite where it needs to be."  Once I get the units rented out in my new duplexes, I'll cross over that threshold and can get my HELOC refinanced at a different bank...

...who also only charges "interest only" for the minimum payment, which will GREATLY improve my DTI going forward!!!  Between my current HELOC bank charging a much higher than normal minimum payment.  And the underwriting process at all banks computing my minimum payment as if my HELOC was maxed out.  Apparently, that's what was KILLING me to get more affordable loans!

And I had no idea until one of the lenders I spoke to in this last round actually LOOKED CLOSELY at my debt and came back to me with a lot of questions.  And it still took both of us speaking, at length, to figure it out.  Here was the gist of the conversation:

Her:  "Whoa!  Your big problem is that minimum HELOC payment.  What's going on with that?  It's so HIGH!  That seems way off."

Me:  "I know this is a little unusual, but (Bank) charges interest and principal in my minimum HELOC payment.  Plus, you know how HELOCs are.  It's only a 10-year amoritization.  I still don't understand why my DTI is never strong enough.  I usually pay at least twice that HELOC minimum payment!"

Her:  "Ooooh!  They charge principal also.  That makes a lot more sense now.  But, wow!  This is why that's such a problem.  Underwriters don't compute your minimum payment based on your current balance.  They compute it as if your HELOC was maxed out.  Because, technically, you could go and take all that money out at any time."

And the full realization of her words and how really ugly my situation has been this whole time, dawned on me.

Bless her!  She's the one who finally told me what my real problem has been and she also gave me the solution.  Get the loan I want with a private lender, ie doesn't have to follow Fannie Mae/Freddie Mac guidelines...but those loans are also more expensive.  Fix up the properties.  Rent out the units.  And THEN my DTI will be where it needs to be.  Move my HELOC to them...or any bank that does "interest only" payments...and I won't have these DTI problems anymore.

Back to useful info for everyone.  She also told me to "cool it" on credit cards with low balances.  If they're paid off and don't have any payments for 6+ months, then those minimum payments don't count toward my DTI ratio either.

charlotte989875

short+sassy said:

charlotte989875 said:

CharmedPam said:

Thank you!  Thank you!  I hope to high hell zillow is accurate because then it looks good for me! I re-fi’d the house 3 years ago for another 30 yr mortgage so I’m really not that far into it. Only thing I want to improve is my credit score. 

Eta: how long do you think these good rates will last?  Do you follow patterns of when to refi? 

Rates probably won’t go up for a while (as someone who works at a bank & does a lot of forecasting based on interest rates). This was a big rate cut and tired mainly to Coronavirus in order to increase confidence in the economy. Typically the Fed doesn’t cut then raise quickly, especially after such a big cut. I’d say they’ll stay low. It’s possible they get lower if there are big economic impacts of the virus (I’d say unemployment starts to increase or GDP growth slows) but if you’re looking to refi/HELOC it’s not a bad time. 

Thanks for the knowledgeable input!  ((Rubbing hands in anticipation))  OMG, I hope so!  I can't even tell you how outstanding that would be for me.  I'm coincidentally doing a lot of "loan shuffling" over the next 1-5 months.

-In about one more month, I'm doing a cash-out refi for two of my investment properties (not the rehab ones).  Paying off my credit cards and paying down my HELOC-->increase credit score dramatically.

-In 2-3 months, when the rehabs are done, I'm refi'ing the two duplexes we've been working on.  I need to get them out of their higher interest, short-term (12 months) bridge loan! 

-In 4-5 months...when my refi's are done and the two newest duplexes are fully rented out...I'm moving my HELOC to a different bank.  They have lower interest rates anyway.  Even better, if they start out lower.  But I've noticed my current HELOC's bank actually does change my rate fairly often to "match up"...both up and down...with what the Fed rates are doing.  They've changed it 4-5x in the last 12 months. 

That’s what I thought; they’re typically tied to the Prime rate which is driven by Fed Funds and that’s dropped a lot this year. I’d be surprised if they drop again, but I’d be shocked if they went up. Before Coronavirus the Fed was still considering another small rate cut and we got the big .5 percentage point cut so I can’t see them raising rates. Inflation is still pretty low so unless that started to go way up I think they’ll keep rates steady. 

So interesting to hear your perspective! Refi’s are so popular right now (cash out and regular) because of rates, HELOCs less so because of that.