The Home Ownership Thread

[Gibonius]

I've been trying to convince my wife that there's no reason to make a big point to pay extra on the mortgage, especially after a refi. They're giving us almost free money for 30 years!

 

[brokencycle]

I've been trying to convince my wife that there's no reason to make a big point to pay extra on the mortgage, especially after a refi. They're giving us almost free money for 30 years!

If I knew I was going to stay here for a long time, I'd pay the $2k to refinance at a point lower and pay it off as slowly as I could.

It took convincing with my wife to not pay extra now. We're at 3.625%. My threshold is about 4-4.5% where I start deciding the guaranteed return is better than the risk premium.

 

[Omega Male]

The existential question around here is going to be un-insurability. Just the current California fires to date represent a potential property loss of over $11 billion. There is already only one carrier that will write policies in size in our woodland neighborhood (AIG Private Client) and my guess is they'll kick us off at the next renewal. If it was a completely unemotional decision, I would sell the house right now to one of the rich tech crowd bugging out of SF and get somewhere less flammable by the water in Tiburon. But I don't wanna.

 

[Ataturk]

So, how does that work when you literally can't buy insurance for the house? Wouldn't impossibility be a defense to foreclosure? Sounds like a free lunch to me. It's not like its your money that burns with the house.

 

[RedLantern]

You're still personally liable on the mortgage, no? I was under the impression that the mortgage was just a security interest in the property.

 

[Gibonius]

If I knew I was going to stay here for a long time, I'd pay the $2k to refinance at a point lower and pay it off as slowly as I could.

It took convincing with my wife to not pay extra now. We're at 3.625%. My threshold is about 4-4.5% where I start deciding the guaranteed return is better than the risk premium.

We're at 3.9% and are going to refi imminently.

It was a struggle to sell a 30 year over a 15 year to the wife. I originally sold that one by dangling extra payments, and now I gotta try to claw back the extra payments.

I made a little bit of ground back by showing that I made six months of mortgage payments back in gains on some marijuana stocks this year. But that's probably not a stable theater of engagement. Can't always guarantee 160% annual returns.

 

[Ataturk]

You're still personally liable on the mortgage, no? I was under the impression that the mortgage was just a security interest in the property.

I don't know cali-forn-i-a, but generally speaking the reason an insurance company wouldn't be willing to sell you insurance isn't that your property is just that damn risky so it's impossible for them to sell a policy that'd make a profit, it's that the state regulators won't let the insurance company charge as much as the insurance company thinks it needs to ensure it doesn't go belly up if there's a fire.

 

[RedLantern]

I don’t understand how that changes the assertion that it’s not your money that burns up if the property isn’t insured?

 

[Ataturk]

He was just going on about how he had an interest-only loan. You can't burn interest, at least not interest you owe to someone else.

Edit: and, yes, damn it, I realize the property can appreciate. It doesn't change the fact that if it burns the bank is up **** creek, so to speak.

 

[RedLantern]

I don’t think you understand what you are talking about.

 

[otc]

The real trick is getting PG&E deemed responsible for the fire.

That way the insurance companies get to charge an arm and a leg in premiums and then get repaid for all of their subrogated loses by the utility (which of course ultimately comes out of the pockets of the ratepayers who live there)

 

[Ataturk]

If you owe a million dollars on the property and it burns, who's out a million bucks? Not you. Is this so difficult?

 

[RedLantern]

If you owe a million dollars on the property and it burns, who's out a million bucks? Not you. Is this so difficult?

You’re still personally liable for the loan, the property is a security interest, it’s still a recourse loan.

 

[Ataturk]

Yeah, you're still liable for a million dollars of unsecured debt. Could they collect that from you?

 

[Ataturk]

blood from a stone - Google Search