Re-fi
Today I'm sitting at home, waiting to do the paperwork on refinancing my home loan. I'm switching from a 6 month ARM tied to LIBOR to a 5/1 ARM tied to US Prime. I'm doing this just in time. LIBOR has moved up a bit, and my first 6 months are coming to an end. My rate was about to go to 5.375, and by moving to the ARM I've been able to lock in 5.25 for the next 5 years.
This length of time seems about right since I'm not certain that I'll be in this house more than 5 years from now. Like the LIBOR loan, this one is interest only, and I plan on investing the difference in the market so that I can reduce the principal with one big payment in 5 years, if I don't buy a new house before then.
This plan works with my idea of me keeping my money for as long as possible. With automatic investing and dollar cost averaging, I should be able to make a decent amount more than 5.25% in the market, so investing makes more sense than paying down the principal.
So far, the only hitch in the re-fi has been that the money people look at you with a blank stare when you tell them that you're going to need bank wire information. They're all set up for dealing with cashier's checks. Too bad E*Trade doesn't actually issue cashier's checks (and makes doing wire transfers a serious hassle).
Let's hope they don't do again what they did last time, which was after verifying that the wire transfer happened, still asking me if I had a cashier's check for that amount.
You would think that people whose sole job is to manage paperwork, and the money associated with it, would do a better job of it.
This length of time seems about right since I'm not certain that I'll be in this house more than 5 years from now. Like the LIBOR loan, this one is interest only, and I plan on investing the difference in the market so that I can reduce the principal with one big payment in 5 years, if I don't buy a new house before then.
This plan works with my idea of me keeping my money for as long as possible. With automatic investing and dollar cost averaging, I should be able to make a decent amount more than 5.25% in the market, so investing makes more sense than paying down the principal.
So far, the only hitch in the re-fi has been that the money people look at you with a blank stare when you tell them that you're going to need bank wire information. They're all set up for dealing with cashier's checks. Too bad E*Trade doesn't actually issue cashier's checks (and makes doing wire transfers a serious hassle).
Let's hope they don't do again what they did last time, which was after verifying that the wire transfer happened, still asking me if I had a cashier's check for that amount.
You would think that people whose sole job is to manage paperwork, and the money associated with it, would do a better job of it.
posted by Mark at 9:16 AM
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