Would it be wise to pay off my second mortgage with my 401k?

[DBL]

Originally posted by: Pakman
Ok, so touching my 401k will be out of the question. I guess it's time to look into refinancing. Any recommendations there? Where should I start? Should I get an appraisal first?

If you have a good rate on your 1st mortgage, It is probably not worth it to refinance.

I think you need to give specifics (amounts, rates, credit, etc.) to get an idea. Have you asked about locking in your 2nd mortgage?

Have you adjusted your withholding based on both of your mortgages?

 

[Xavier434]

Originally posted by: Pakman
Ok, so touching my 401k will be out of the question. I guess it's time to look into refinancing. Any recommendations there? Where should I start? Should I get an appraisal first?

First and foremost, get a fixed rate unless you plan to sell or flip the house you are in sometime soon. If you plan to keep it for a while then fixed is the way to go. You don't want those surprise letters coming to you in mail informing you about rate increases that can't do anything about.

Second, I don't believe there is any benefit to get an appraisal, but there are probably experts more educated on that matter than I am. I was under the impression that appraisals are only good when you are planning to sell the house. At the very least, I don't think they play any part in refinancing.

Lastly, if you want to lower the total monthly cost for your home, do more than refinance. Start doing web research on improvements to your house which could lower your insurance. There are sites out there dedicated to providing the public with bullet point lists of improvements that you can do which could result in a lower insurance rate. For example, depending on where you live, adding hurricane shutters to every door and window can lower your rate. That is just one example. There are many of them. Once you get your hands on a list of these things, call you insurance company and talk to them about it to find out which improvements are worth it. After that, make the improvements and get a formal inspection from your insurance company and you are done.

 

[Pliablemoose]

Originally posted by: DBL

Originally posted by: Pliablemoose
#1. WTF were you thinking about taking out a 2nd mortgage?

#2. Cashing in your 401K is dumber than taking out a 2nd mortgage.

There are often good reasons for taking a second mortgage. Why make such a statement?

OP, now that the rate has just dropped 3/4 of a point, why not look into locking the rate of your 2nd mortgage?

Also, have you adjusted your withholding based on the interest you are paying on your 2nd mortgage every year? That could supply you with a lot of breathing room.

Carry on, sorry for interrupting...

 

[Pakman]

Originally posted by: DBL

Originally posted by: Pakman
Ok, so touching my 401k will be out of the question. I guess it's time to look into refinancing. Any recommendations there? Where should I start? Should I get an appraisal first?

If you have a good rate on your 1st mortgage, It is probably not worth it to refinance.

I think you need to give specifics (amounts, rates, credit, etc.) to get an idea. Have you asked about locking in your 2nd mortgage?

Have you adjusted your withholding based on both of your mortgages?

I would consider my first mortgage a decent rate at 6.25. I would like to leave that. I'm leaning toward getting a fixed rate for my second. I don't plan on selling anytime soon. This is my first house, and I plan to live in it for a long time. My credit is what most would consider excellent. I haven't adjusted my holdings. I should probably do that, but I'm not in a financial crunch. I just feel like saving some money.

 

[dmw16]

simple answer. nope.

 

[tfinch2]

Originally posted by: Pakman

Originally posted by: DBL

Originally posted by: Pakman
Ok, so touching my 401k will be out of the question. I guess it's time to look into refinancing. Any recommendations there? Where should I start? Should I get an appraisal first?

If you have a good rate on your 1st mortgage, It is probably not worth it to refinance.

I think you need to give specifics (amounts, rates, credit, etc.) to get an idea. Have you asked about locking in your 2nd mortgage?

Have you adjusted your withholding based on both of your mortgages?

I would consider my first mortgage a decent rate at 6.25. I would like to leave that. I'm leaning toward getting a fixed rate for my second. I don't plan on selling anytime soon. This is my first house, and I plan to live in it for a long time. My credit is what most would consider excellent. I haven't adjusted my holdings. I should probably do that, but I'm not in a financial crunch. I just feel like saving some money.

You feel like saving some money, so you're going to spend money you've already saved?

Why the fuck does everyone have a right now attitude? Think long term.

 

[alkemyst]

Originally posted by: Pakman

Originally posted by: Pliablemoose
#1. WTF were you thinking about taking out a 2nd mortgage?

#2. Cashing in your 401K is dumber than taking out a 2nd mortgage.

I'm sorry, I wasn't here for a lecture, just some advise on my current situation.

texans sued the banks claiming the didn't know equity lines and 2nd mortgages actually were secured by their homes.

Thing is they won...

Equity lines and 2nd mortgages are smart moves if you have the right reasons. Buying Harley's and boats isn't one of them.

 

[Xavier434]

Originally posted by: tfinch2

You feel like saving some money, so you're going to spend money you've already saved?

Why the fuck does everyone have a right now attitude? Think long term.

A bit blunt, but he's right. When thinking "homes", you cannot do anything but consider long term if you want the most bang for your buck. A lot of people get confused as of late because the past 5 years or so have been crammed full of "real estate" talk. There is a big difference in priorities when financing real estate vs financing your home.

 

[DBL]

Originally posted by: Pakman
I would consider my first mortgage a decent rate at 6.25. I would like to leave that. I'm leaning toward getting a fixed rate for my second. I don't plan on selling anytime soon. This is my first house, and I plan to live in it for a long time. My credit is what most would consider excellent. I haven't adjusted my holdings. I should probably do that, but I'm not in a financial crunch. I just feel like saving some money.

Strange.

So you have not adjusted your with-holdings at all despite have two mortgages? What does your refund look like?

Let's say you pay 1.5k/mth in interest on both mortgages. Instead of waiting until the end of the year (essentially giving the govt an interest free loan), why not adjust your withholding and put that extra money away every paycheck? If you pay 1.5k month in interest, that gives you about an extra $4-500 per month to save. Put that in an interest bearing account and you can receive the interest on your money rather then the Govt.

Or use the extra to pay down your second mortgage.