All Forum Posts by: Jonathan Peters

@Upen Patel The condo we're purchasing is a 90% financing building, so the minimum we can put down is 10%. We want to put down 20% to keep the monthly payments more manageable. 

@Jessica G. The way I got my head around it was we have ~$75k in debt between student loans and credit cards. The interest rates on those are higher than what the cash out refi mortgage will be. And the minimum monthly payments add up to over $1k. So using the cash out refi money to wipe out all of our debt leaves us with a hefty chunk of cash for our down payment. And it actually lowers our monthly expenses, even though the PITI is higher than what the renters pay.

@Alex Furini Thanks for your insight. We decided to move forward with the cash out refi at 5.5% and are pulling out the $397,500. I was charged the appraisal fee yesterday, so we're hoping to have that deal closed in the next ~2 weeks. We didn't end up exploring the HELOCs too deeply, especially since the variable rate (and current climate around interest rates) made us think the fixed rate on the cash out refi suited us best. We also confirmed with our mortgage broker that there is no penalty for paying down the new mortgage early, which we may do once we can assess our financial situation after closing on the Brooklyn condo.

@Jonathan Peters I said high threes, but really mid fours without the last 3 items

@Zack Karp Thanks, Zack. Ok, so if we take out the last three items, the closing costs are still in the high threes. I'd love to get some perspective from @Chris Mason.

@Zack Karp

So, the closing costs are pretty high on this cash out refi. Am I getting hosed?

The costs are

-$1740 origination charges

-$650 appraisal fee

-$65 credit report

-$150 title endorsement fee

-$695 title escrow fee

-$450 lenders title insurance

-$50 title messenger fee

-$300 title notary fee

-$50 title wire

-$425 recording fees & taxes

-$933 prepaids (insurance, property taxes, interest)

-$1043 homeowners insurance

-$1792 property taxes

TOTAL CLOSING COSTS: $8,343

@Zack Karp Thanks. This is really helpful. I may be high on my closing cost estimate. I will look at the disclosures and make sure they're not that high. I will be moving forward on the 5.5% cash out refi. Thanks for all the help.

@Matt K. Ok, thank you. I'll continue moving forward on the cash out refi to get that done. I do plan to use the cash for that for my down payment, but I'll keep that to myself for the time being.

@Matt K. Thanks for sharing your experience and words of caution. I too am on a tight timeline, as our offer on the Brooklyn home is accepted, so we need to get the cash out refi (or HELOC) on the California home closed ASAP to put the down payment on the Brooklyn home. It sounds like, from your point of view, we're not in a terrible spot with the cash out refi when weighing against the HELOC. Is a HELOC only for shorter terms than a mortgage? If that's the case, then I think the cash out refi is better for us since it'll kick off a new 30 year term.