Wednesday, June 19, 2013

Refinancing Research, Revelations, Realities, Reflections

Dear Readers:

As you probably know I've been busy these last four weeks, since my return from my first ever several month RV adventure, working on such diverse activities as:  budget / investment organization and planning, house cleaning and maintenance after two years total of being away, home refinancing to allow for future adventures, studying the benefits / negatives of updating Daphne Dolphin vs buying a newer, more oomph, somewhat larger RV.  Gradually things become clearer and some decisions and changes have been made.

This morning I received two possibilities for refinancing my home.  Even though I've been involved in many home purchases in the course of my marriage, this will be the first time I will have refinanced a home on my own.  In a nutshell, the two possibilities are:

1)  A conventional loan that lowers my interest rate by a full percentage point lowering my monthly payment by about $250 - with no closing costs.
or 
2)  An FHA loan that also lowers my interest rate by a full percentage point but actually increases my monthly payment by about $100 and has fairly substantial closing costs.  However, it also includes a very tidy number of dollars that I could use to buy a newer / nicer RV and still have a goodly amount of money left over for savings.

When I rent the house I'm told, by my  realtor friend, that I can expect to collect rent that would cover the increased house payment.  Do I want to do that?  I haven't decided whether I want to fix Daphne Dolphin or buy something new.  I do know that I love the RV lifestyle; at least for a reasonable amount of time, I plan to RV in the future.  But, might I also like to adventure without the RV from time to time?  I think so.  If I decide to trade Daphne for a newer (more costly) RV and I went the conventional route, I'd probably have to take money out of my retirement saving investments or make monthly payments to cover the difference between what I get for Daphne and the cost of a new RV.  Would it be better to leave the equity in the bank, with lower monthly house payments and the possibility of having to procure a finance arrangement for a newer RV?

I'd love to get your input.  Happy Wednesday, friends.
mary-pat

PS:  I've decided that I don't want to sell the house even though it may turn out that I never live in it again.  The market is just starting to get a little on track here and I think it behooves me to hold on to it for now.

19 comments:

  1. Hi Mary-Pat,
    I drive a 38' Class A Winnebago Adventurer. It's big, but it's my only home. I'm not fond of driving it, but when I get to my volunteer assignments, I'm very comfortable living in it.

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  2. I hear you - I don't want to give up my home, but I see me spending less time there and more time in my RV traveling...

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  3. We understand your dilema' MP. As many people have told us, there is no perfect RV. We were, momentarily thinking of selling Euri. We have, happily, decided to keep him. We have continued to do the proper maintenance for the van and are very happy with our decision to stay with a smaller footprint. Also, we too may want to explore without the van. Next year we are doing some contemplation to going to Ecaudor (flying of course). Maybe Euri will get a rest next winter!!

    Lots to think about, MP, isn't there?! Combined, of course, with all your other decisions about refinancing!! Don't get a headache and good luck!!

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  4. I suggest you make due with your present Rv! Puts some money into it as there is no perfect Rv. Keep the house as its nice to get out of your Rv from time to time! Happy trails, jack

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  5. Thanks for your suggestion. You're right, there is no PERFECT RV.

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  6. Retirement is about enjoying the remaining part of one's life. Active stock investing, house mortgage/rental or keep up are just too much headaches. Simple way is to match one's expected net worth to life expectancy. Then adjust the life style accordingly. And leave the unexpected part to God.
    That sounds pessimistic. But rving is about minimalism. Less is more.

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  7. Renting can be a good possibility or a bad one depending on whether you have someone to keep an eye on the house and the type of tenants. And be sure to have a fund for repairs and maintenance on the house too.

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  8. Hi Colleen:
    Thanks for the comment. The refi is in progress; the house is getting spruced up and I have two couples interested - nothing for sure yet.
    I'd love to read your blog - what is it?

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  9. We have a house in San Antonio which we rent out. We have found that it is worth paying for a background check. We charge the prospective tenant the fee. This weeds them out very quickly from the start. Even though we live in Mexico, our San Antonio neighbors keep us up-to-date on what is going on. The house is older, 57 years old, and we have had two major repairs but were able to handle them from a far. Our tenant, a single working mom with two middle school kids, has a list of preferred repair people to choose from. She has learned that it is wise to be a good shopper and now uses Craigslist to find repairmen for minor things helping us to keep costs down.

    In short, owning and renting from afar is a managable thing. P.S. Did you get a new motorhome?

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  10. Hi living:
    Thanks for your comments, which I take as encouragement and a guide to use my house as a tool for furthering my goal to live life to the fullest hacking away at that long bucket list. Or, on the not so adventurous days, sit back and relax and do nothing!
    I'm going to direct you to today's blog post [which I haven't written yet] to answer your last question...... I'd also like to look at your blog....

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  11. Stop and think. Sit back with a coffee in the back yard take some time
    Look in to the fact that the camper is a second home and therefor a right off so the Money u get back in to the loan (s) will it make up for any higher cost
    If u don't have a loan on the camper you can't right the taxes off on it only the home
    Even so sit down with a GOOD tax guy and spell it out let him give u something to pounder on pro or con and go from that point joy your day

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  12. O and one more thing Don't be the renters agent your better off paying someone to do that they will have a workers list and are better off to deal with renters ,,, even if u pay a tax on the $$ U get from renting How is you re- loan set up will the bank let u do this
    Rat,s back to the tax guy we go
    By

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