‘Tis the season to be thankful and I‘m starting with you r/personalfinance

[miaooor]

@flowerbud They are not required to do it, nor is it required to be free. In general they have guidelines, which you should be able to ask them for in advance. Most of the time it's there to prevent min/max people from ruining it for everyone by asking them to recast it every time they put an extra dollar of principle on there. I believe most banks peg a minimum at 10%.

As with everything mortgage related, they're going to check that you are in fact up to date on your payments, a quick automated calculation that your house is still worth what they think it is, and how nice they're feeling that day. In general it works out to their advantage due to the increased interest revenue from you.

If they don't agree to it you can always appeal, they are human. Otherwise refinancing is an option, though it will cost ~$1500-2500. It's a MUCH easier process than buying a house as there is no ticking timer.

 

[flowerbud]

@miaooor I agree, I can just pay down the additional amount now, apply for a recast and in case they don't agree, just refinance the lower principal now to lower the monthly payment.

Given the fact that I am talking about a 40% down payment towards the principal, they better agree else I refinance. Would I be wrong to take such a stance? If they don't recast, they stand a chance to lose out on all interest.

I got an appraisal for the house and it is definitely worth more than it was when I got the mortgage.

 

[aniska]

@flowerbud Keep.in mind that you typically pay a charge to re-fi. Once you find out that cost, you may find it is easier just to pay what you are and pay the house off earlier.

 

[miaooor]

@flowerbud They don't care about your specific interest. If they decline the re-cast, ask for it to be escalated, ask why it was declined to see if you can work with them, etc. If they still decline I wouldn't say "or else I'm going to re-fi." They will just transfer you to someone to sell you a mortgage which is more profitable for them. Otherwise, they get a paid-in-full loan success story on their books, plus the fee(s) for giving you "payoff statements."

Nothing they do on this front is worth getting your blood pressure up over. They certainly won't break a sweat. They have various goals and targets which are completely opaque to you, and potentially even the person assessing your loan for recast.

 

[flowerbud]

@miaooor not boiling blood over but it would be pretty stupid of Chase to let go of the interest from a good standing account just because they would not want to recast as someone was not in the right mood?

 

[edavisunc]

@ovis90 Yep. This sub is one of the best things on Reddit. This kind of stuff should be a normal part of our education.

 

[lami]

@ovis90 I understand that contagious feeling you had after making large payments to your loans! I used to think having money in my savings account was better than paying off my unsubsidized loans until I realized how much interest was accumulating. I ended up using my savings to make huge payments on my loans and it felt amazing.

From then on I saved (even on my poor grad student salary) and put all of it into paying off my loans. I started with about 15k and the day my balance hit zero felt awesome even though my savings was practically gone. I still have my subsidized loans to pay off, but at least those aren’t accumulating interest right now and I can start saving with out guilt!

Anyway, nice to hear your story! Congrats!

 

[ovis90]

@lami Exactly! It’s risky taking from your savings or emergency fund but someone said the only thing worse is not making a decision with the money you have. That really resonated with me.

Good luck with the rest of yours!

 

[buckleysg]

@ovis90 Congrats! I started my own debt reduction journey in November of last year. I still have $15k of CC debt and $46k of student loan debt to go, but that's better than where I started!

If I could upvote you a thousand times I would, for The Wire quote.

Another Lester Freamon quote, one of my favorites:

"A life. A life, Jimmy, you know what that is? It’s the shit that happens while you’re waiting for moments that never come."

 

[ovis90]

@buckleysg I take your thousand upvotes and raise you another thousand upvotes for knowing it. The entire show is so quotable and you highlighted one of my favs.

Also, I knew it was Freamon. I second-guessed myself. Damnit.

 

[buckleysg]

@ovis90 This one from Beadie literally turned my life around:
Beadie:
All the guys at the bar, Jimmy, all the girls; they don't show up at your wake. Not because they don't like you. But because, they never knew your last name. Then a month later, someone tells them, "Oh, Jimmy died." "Jimmy who?" "Jimmy the Cop." "Ohhh," they say, "him". And all the people on the job, all those people you spent all the hours in the radio cars with, the guys with their feet up on the desk, tellin' stories, who shorted you on your food runs, who signed your overtime slips. In the end, they're not gonna be there either. Family, that's it. Family, and if you're lucky, one or two friends who are the same as family. That's all the best of us get. Everything else is just...

I used to go out and drink pretty much every night. Really put things into perspective for me.

 

[starpuppy]

@ovis90 And here I am, feeling like I’m gunna be broke forever. Oh well, its only moneys

 

[ovis90]

@starpuppy What’s your story? Feeling like you’re going to be broke vs actually being broke for the rest of your life are two very different things. Maybe someone can help?

 

[starpuppy]

@ovis90 Maybe someone can help. I don’t want to post in this subreddit because it seems like you need to have a well-thought out thesis, bibliography, as well as 3 pages of 12 point font backing up your thesis with primary sources.

Long story short, 21 years old. 45 grand in debt because of school and car loan. I am struggling to finish my college education because I’m a depressed miserable fuck who’s aiming for a degree that I don’t really want but am trying to get because I think it’s easy (it isn’t). I have a job and try to save a good amount, but when you’re pissing away 800$+ for loans and shit, you realize that you’ve really, really, really fucked up and that your life as a serf is only just beginning.

 

[flowerbud]

@starpuppy you will be surprised how much difference even saving $100 a month and paying down the principal makes in terms of interest saved.

 

[cfs50]

@flowerbud It is a long game. I know more than one person that took on student loan and credit card debt, and followed that up by purchasing a brand new car as soon as they got out of college. Not the best decisions? Absolutely. But here we are, many years down the road and we are all doing fine. They had to dig their way out of it, but they did. You can too.

I used to run out of gas in my car because I was too broke to fill it up. My friends and I lived on boxed mac-n-cheese and hotdogs for weeks. I am at the other end of that equation now. It can be done.

Congrats to OP for buckling down and making it happen!

 

[ovis90]

@cfs50 Thank you. For me it was all about starting somewhere. Not diminishing the psychology of feeling behind and lost but a plan and integrity to stick to it can only help both financially as well as emotionally.

 

[resjudicata]

@starpuppy Sounds like your mental issues are your biggest concern. I'm in 21k debt and 26, make near minimum wage, pay 1200 a month in bills (I make 1300 if I dont get overtime). Saving 50 bucks a month is better than not saving at all, being homeless and starving to death. Which you're not. Your bills are your privilege.

 

[yogesh]

@resjudicata I hear people throw around the word privilege more than I'd like, but this is definitely the worst privilege I've heard of yet! lol Goal Posts are really moving.

 

[starpuppy]

@resjudicata I save money usually.

But I don’t buy that bills are a privilege. Would rather be homeless and stress free than living in a home that is essentially a prison because of debt. At least when you’re homeless, you’re free to do what you want, when you want.