Re: Interesting Offer From Mortgage Company

"Jonathan Kamens" <jik@xxxxxxxxxxxxxxxxxxxxxx> wrote in message news:fonb50$l0$1@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
"Dave" <noway@xxxxxxxxx> writes:
Option 2, Collect all money owed sooner. Meaning, the sooner they can
under-write a mortgage for someone else, or simply invest the money. Either
way, the money starts working for them sooner. (they already have your
interest, now they want someone else's)

How do they already have your interest? They haven't collected it
yet. And if you pay off sooner or with a lower interest rate, then
they collect less of it.

They have a mortgage. If you pay it, they win. If you don't pay it, they foreclose, sell the house, and win again. Oh, and when you comment about paying off sooner, you assume that the home-owner is going to remain in the same home for 30 years plus. NOW YOU GET IT. (right?) Or put another way, 130 payments before selling is better than 120 payments before selling. To the bank, that is.

This ignores the fact that if you HAVE the extra money, you should invest it
so that it works FOR YOU instead of the mortgage company. So not only is
option 2 a good one for the mortgage company, but it is a BAD ONE for you,
even if you think you can afford it. (you can't) -Dave

That's true only if you can invest it at a higher net rate of return
than your mortgage rate, taking into account the fact that you'll have
to pay taxes on your gains and the mortgage interest is tax-deductible.

Are you SERIOUS??? A poor investment returns about 10%. That's piss-poor. Mortage rates are in the FIVES at the moment. Shit, you could almost put your money in an online savings account and beat your mortgage rate. Yes, after all taxes are added to the equation. -Dave