Random Thoughts Thread

[Ray McKigney]

What is LTV?

 

Lakers Television a.k.a. Time Warner Cable Sports Net

[nate]

Nate lives in a place where his rain has calcium in it.

 

Even in CA with a dark colored car rain would leave obvious spots on a clean car.

[gotbeer]

Even in CA with a dark colored car rain would leave obvious spots on a clean car.

 

Yup.  More of the pollution.  Especially kick back from the ground.

[Angels_Make_Me_Drink]

Gotta be up in 2.5 hours to start up the smoker. Smoking a brisket and some beef ribs tomorrow. This day is going to drag.

[Angels_Make_Me_Drink]

Never went to sleep. I feel like death.

 

But the brisket and beef ribs look damn good.

[Sully151]

What kind of smoker do you use?

[ten ocho recon scout]

Brandon, do you do loans or related to that industry?

[mrwicked]

I am curious as well, never had a smoker.

Ordered a new BBQ last week though, a Weber S-330. Pretty exited to have that bad boy delivered.

[nate]

I am curious as well, never had a smoker.

Ordered a new BBQ last week though, a Weber S-330. Pretty exited to have that bad boy delivered.

 

I have a couple year old Genesis 330, it is awesome.  Make sure you get a smoker box for it.

 

I have a MES 40 smoker.  Also badass.  You can control/monitor the temp via a smartphone app which is convenient. http://www.amazon.com/Masterbuilt-20070512-Controller-Discontinued-Manufacturer/dp/B007ZTMTCG

 

Edited August 9, 2015 by nate

[Brandon]

That looks badass

[Brandon]

Brandon, do you do loans or related to that industry?

 

Yeah, about 15 years or so.

 

Basically grew up in the industry and was even doing minor stuff even in the 90's as a kid.

[Tank]

all of our teachers had to attend a workshop today on sexual molestation. a very sobering and depressing day to learn in greater detail what people do. there were several video clips of offenders explaining what they did and who they targeted, and even some who tried to justify what they had done. an absolute nightmare of information.

[gotbeer]

all of our teachers had to attend a workshop today on sexual molestation. a very sobering and depressing day to learn in greater detail what people do. there were several video clips of offenders explaining what they did and who they targeted, and even some who tried to justify what they had done. an absolute nightmare of information.

 

So was this a training session?  Just sounds like if someone was going to be a sexual predator, the workshop just gave them a wealth of information.  

[Tank]

it was focused on what we should look for as teachers, both in behavior from kids and from adults, and the fact that it happens at school, church, and home. 

 

i know we've kidded about it in the past, but today we watched a short interview with a couple of guys from nambla, and it was one of the most disturbing things i've ever seen.

[ten ocho recon scout]

Yeah, about 15 years or so.

Basically grew up in the industry and was even doing minor stuff even in the 90's as a kid.

this is going to be too broad of a question for a simple answer, but as much as you can, can you give a rough estimate of:

How much more a 15 year loan would cost monthly vs a 30?

How much should you pay extra a month to pay down in a significant amount of time?

How much does it help to put more money down on a house? As in its eorth it if you can pay 10 percent more but not less than that for example

[ten ocho recon scout]

it was focused on what we should look for as teachers, both in behavior from kids and from adults, and the fact that it happens at school, church, and home.

i know we've kidded about it in the past, but today we watched a short interview with a couple of guys from nambla, and it was one of the most disturbing things i've ever seen.

ive seen some really bad things over the years at work. Its a lot more common than people think.

[Brandon]

this is going to be too broad of a question for a simple answer, but as much as you can, can you give a rough estimate of:

How much more a 15 year loan would cost monthly vs a 30?

How much should you pay extra a month to pay down in a significant amount of time?

How much does it help to put more money down on a house? As in its eorth it if you can pay 10 percent more but not less than that for example

Good questions and not broad, but there are variables that affect different outcomes.

I ran some basic calculations off of a 200k loan amount and they seem a bit off in some parts, but a good general idea in others.

Off of 200k, and I didn't fully alter the algorithms used to calculate, a 15 year payment is about 1500 and 30 year about 1000. With that, the interest portion is about the same for both at 750, but in a 30 year term only 250 of that payment goes to principal and in a 15 year situation it's about 780.....obviously, a shorter term means more goes toward principal. That ratio seems close. If I see a mortgage payment of 2000 and someone wants to reduce their term to 15 years, the new payment for 15 would probably be anywhere from 2800 to 3200....probably close to the 3200 number.

Your second question is the secret to mortgages. Ones that seem to grasp how interest works will take a 30 year term, so they aren't obligated to the 15 year term, but add 300-500 a month extra. Any extra always goes to principal thus your balance decreases quicker. Also, you are theoretically creating a 15 year loan without the obligation.

There is no magic number to pay extra, I just say whatever is comfortable. What I see a lot of is people with 30 year loans from, say, 2005 and what they will do is refinance down to a 15 year today (cutting off 5 years) and you're also getting a lower rate/payment because you are now lending on a much smaller loan amount as you've paid off 10 years. That's why I laugh at people focused solely on rate....a 4.5 to a 4.25 on a 100k loan amount is so miniscule, but the closing costs associated with that lower rate, once rolled into the loan, is a losing proposition.

Your last question is really based on your long term goals. I run into people from the south where they are simple 9-5 types that just want to pay off the home quick and retire there while the CA investor guy just wants 30 year 3/1 or 5/1 ARMs to keep the payments as low as possible and stay cash flow heavy. For most people, I'd just say avoid any kind of mortgage insurance because it's a waste which means 20% down on a conventional loan. So think of avoiding mortgage insurance as a minimum and anything extra is a bonus. Obviously the more money down the better. If you ever see a TIL (truth in lending form) with a loan it's comical. It's there in four boxes broken down where something like a 250k loan paid over 30 years ends up being about 750k. I constantly restructure loans for people where maybe pain a bit extra a month or shaving off years literally saves them 100k or more in the long run.

The great news for you, if I remember correctly, is you're a vet and VA loans are the best. Also, USAA has the lowest homeowners insurance policies. Use that entitlement and save a ton.

Hope this helps and wasn't too much.

[ten ocho recon scout]

Thanks for the breakdown Brandon! Lots of good info

The next house i buy will hopefully be "the one" and last one i buy (unless i get salty in retirement and want to move far away to somewhere cheap). The problem is im not exactly young anymore so dont really want to still be paaying a mortgage too late in life. The 30 year but paying extra vs the higher payment of the 15 year loan makes a ton of sense. Im hoping i can time it kimd of close so that when inretire, my deferred comp will have enough in it to at least pay off most of the remaining mortgage.

But i keep kind of toying with the idea of buying a rental place now, like a condo, as an investment for later too. Keep flip flopping. But i have to figure something out to better invest my money than just a savings account.

[Brandon]

Yeah, no worries dude. I'm as active as I was back in the day, so any time. People used to ask questions here, mostly personal messages, and I can answer questions or help where I can.

It's all dependent on situation and goals, some people know they can't take the money or debt to the grave and just constantly shoot for lowest payment....like the dude that always leases opposed to buying. You get to write off the interest as well.

If I was older looking for an investment property I'd shoot for something like a 10/1 ARM to keep my payments as low as possible so that the rent is passive income. Just fully consider all costs like taxes and insurance. I see a lot of times where people collect 1500 for rent with a payment of 700 and it looks great on paper as 800 a month. But up keep, repairs, and taxes and insurance quickly eat into profit and in some cases they are losing money monthly.

[nate]

Is there a general rule for rental properties how much you should plan for overhead?  I mean tax, insurance, etc is a known amount but upkeep and repairs is the unknown.

 

One thing we have considered is doing a 30 year with 20% down on two properties and use one for a rental.

[Brandon]

Not that I am aware of, but I'm sure something will pop up on Google. I'm sure it's simply setting x amount or % aside. Most people have a property management company handle the day to day.

I do a ton of business in WI, actually in general where people buy townhouses and live in one, rent the other out, and basically pay for both units. Not sure of calculations outside of loan guidelines with regards to rental income and occupancy figures.

[nate]

Yeah there are a ton of duplexes that really are just old houses that at one point got split in half.  They are usually on an acre or half acre so it's a pretty nice home.  A while back we almost bought one to renovate and turn back into a single family home.

[gotbeer]

Went to the In N Out in Temecula.  The shake machine was broken.  I was sad.  The double double helped ease the pain.

[Tank]

Went to the In N Out in Temecula.  The shake machine was broken.  I was sad.  The double double helped ease the pain.

 

you know, you could have just driven another mile or two to another INO. they're so plentiful out here you can hardly swing a dead cat without hitting one. 

 

i mean, it's not like we live in wisconsin or anything.

[Don]

Tank seems to be an expert on the physics of dead cat propulsion... Interesting.