Yeah I know, I think it’s crazy too.
I know it’s nuts. They are an old school founder run company. They just hired a full time HR person last year after not having one ever before despite 100 employees and $20M/yr in revenue.
And welp, they already dropped it in the mail. Nothing quite like the feeling of having mid five figures floating around in limbo at a time like this…
A few years ago my Dad’s company forced all employees to switch to direct deposit. Dad has never had a credit card and never used an atm, so this put a bit of a cramp in his style. Every payday he would roll up to the local bank branch, give the teller a personal check made out to “cash” and the teller would give him money. It’s how he had handled his finances for 50+ years, so why change now?
Fortunately, my stepmom finally taught him some new tricks, or he probably would have already caught covid while hanging out in a bank lobby sometime in the past 6 months.
I am super annoyed that I still have to pay my rent via a check in the mail.
Part of the reason we still have checks is the blatant price fixing in credit card processing that forces merchants to pay 2%+ to take payments via card.
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I write 3 or 4 checks a month because I can’t figure how else to pay them without making more effort than just writing a damn check. But maybe that’s because I’m older.
What bills are these? Every bill I’ve had for years has had online payment available, if you need to pay an individual you can do various bank e-pays, venmo, PayPal etc. I think may last regular pay by check thing was college rent in 2008
One is a HELOC that I know can be paid online but for some reason I couldn’t get the online access squared away and finally gave up. There there are my water and sewer bills, neither of which appear to have any option other than a check. I’ve heard I can just set it up to tell my bank to send checks for things like this for me, but I couldn’t figure out how to do that either and gave up. I also pay my lawn service by check about once per month. Only other option there is cash.
Then every month there are one off things like checks written to the school system, checks written for graduation or wedding gifts, checks written to the guy who maintains my sprinkler system, stuff like that.
Looking at my records I average about 5 checks per month and could probably knock it down to 2 or 3 with some effort. I have no idea how people get away with zero checks though.
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Person to person etransfer of funds is extremely common where I live. We pay people like the dog walker, the snow clearance guy, and the lawn guy by email.
I got offered 2.5% on a 15-year loan. Rolling the fees ($~3,400) and escrow into the loan would result in an increase in monthly payment of $235 but would shave 8 years on the time to pay off the house. According to a refi calculator, I’d be saving close to $50k in the lifetime of the loan.
This seems like a no-brainer. Anything I may be missing?
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Looks like you’re paying ~2% in fees. So there may be half a point worth of crap tacked on there that you can get rid of. Push back on it and see if they take some off.
Thanks. I thought the fees were a little high as well, specially after seeing what spider posted earlier in the thread.
I should have done a 15-year-loan when I refied.
Just wanted to post a huge thank you to all those that mentioned the rates being so low. Got my numbers today from our guy and they were pretty much exactly the same as what you posted here. Seems like a huge no-brainer to me to save so much and shave a good number of years off.
I was told that the half point rate increase was already factored into the rates we were quoted. I’m not too in the weeds but our guy was none too pleased about the increase and called it just a huge money grab because the reason given for the adjustment was increased risk due to uncertain economic times. But the risk of default by those refinancing (assuming they’ve been making their current payments on time) really should not justify the rate hike.
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I think the pro move is to do a 30 year but pay extra principal to turn it into a 15 year yourself. If rates go up, stop paying extra principal.
I thought about doing that when I did my last refi but decided to get the 15 in order to force myself to pay it off earlier. Then of course I almost immediately got laid off and was unemployed for 2.5 years and kicking myself for the higher monthly payment.
This seems like the worst option since you’re paying a higher rate on the 30 than the 15.
If you’re risk tolerant, the best move is to get the 30 and put the extra money in the market. You should easily be able to beat the interest rate you’re paying in the market (especially when you factor in that interest is tax-deductible against regular income while capital gains tax is lower).
A home is pretty much your only chance for cheap money (other than some student loans) so why not take advantage of that. Never really understood the Ramsey quest to be debt free as quick as possible.
Of course, this may not be for everyone depending on your other assets, risk tolerance, etc., but it is almost always the + EV move (assuming not an abnormally high spread between 15 and 30 year).
The rate is like .25% higher. Over the life of a 30 year loan, interest rate volatility is historically like 20 times that or more. Its like a super-cheap option.
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Sure, but why pay off at the 15-year pace in the first place.
Because it is a guaranteed return that’s higher than the risk-free rate (treasuries). But it could easily be the case in the future that treasuries yield more than your interest rate, in which case you make a risk-free profit by directing the extra principal elsewhere (you have to account for taxes too but the point is obvious).