If you’re focused on paying off your mortgage, good for you. It’s generally always good to pay down debt. However, I’d also like to share with you the biggest downside to paying off your mortgage that may surprise you.

It’s been six years since I paid off my rental property mortgage. It was a mortgage for $464,400 I took on in 2003.

For the first year after paying off my mortgage, I felt great. But after that, the satisfying feeling of getting rid of debt wore off.

Perhaps the reason why the feeling was so ephemeral was because there was no congratulations card or fancy French Laundry dinner celebration. The only thing that changed was the extra ~$2,500 a month in cash flow, which went straight to savings or investing.

Before taking on this mortgage, I experienced an eerily similar feeling of ambivalence in my early 20s. After working for 60 – 70 hours a week from 1999 – 2001, while saving 100% of every bonus and 50% of each paycheck, I started thinking: what’s the point of it all? 

Maybe I was experiencing a quarter life crisis back then. What I did know was that my enthusiasm for working in finance faded after the September 11, 2001 terrorist attack.

In 2003, with my lack of enthusiasm, I was *this* close to leaving San Francisco for Honolulu until I found a 2/2 condo overlooking a park in Pacific Heights for $580,000. Once I took out the $464,400 mortgage, my motivation to work hard shot through the roof!

Suddenly, my work felt more meaningful because if I stopped paying my mortgage, I’d lose my $116,000 down payment and trash my credit score. Without dependents, finally, I had something tangible to work hard for.

When there are mortgage market abnormalities, we must take advantage to get the lowest rate and best terms possible.

Currently, there are two mortgage abnormalities in 2021 to be aware of:

1) The average 15-year mortgage rate is way below the average 5/1 ARM rate. Therefore, you should take advantage.

and

2) The average 30-year mortgage rate has been going down while the 10-year bond yield has been going up. Therefore, the 30-year fixed rate mortgage looks very enticing as well.

As a result, if you are looking to refinance your mortgage or are buying a house, get either a 30-year fixed or a 15-year fixed. Both are offering the best value out of all the mortgage products that current exist today.

Credible is my favorite place to refinance a mortgage or get a new mortgage. You’ll get real, no-obligation quotes from competing lenders in minutes. Take advantage of the current mortgage market abnormality!

Refinancing a mortgage today is a smart move because interest rates have fallen to all-time lows due to the coronavirus pandemic. Investors fled from stocks and into the safety of bonds, thereby pushing Treasury yields and mortgage interest rates to the lowest they’ve ever been. This post will teach you how to get the lowest mortgage interest rate possible to save money.

Thankfully, homeowners have gained a huge amount of equity since 2012. They aren’t going to foreclose or short-sale for nothing. In fact, I think 2021 and beyond is a good opportunity to buy real estate due to rising affordability and an underperformance in real estate prices compared to the S&P 500 in 2019 and 2020, which was up 31% and 16%, respectively.

I’ve refinanced multiple mortgages across multiple properties since 2003. I also recently refinanced my mortgage in late 2019 and got a new mortgage for only 2.125% in 2020. Here are my strategies for how you can get the lowest mortgage rate possible.

Yes, you can get a mortgage in one state to buy a property in another state. Many people are now considering moving to a lower cost state due to the acceptance of working from home.

Due to the extended lockdowns, I’m more motivated than ever to relocate from San Francisco to Honolulu. I have been looking seriously at Honolulu property since 2015 and I’m finally seeing some great deals in the area.

My logic for moving is this: If I’m going to shelter-in-place for months on end in the future, why not shelter-in-place in a nice property that has plenty of land, lots of indoor space, a pool, a hot tub, a garden, good weather, and is close to the beach?

When you have kids, you crave for as much space as possible to enable them to run around and have fun. Hearing their screams of delight is so wonderful.

Given we have enough passive retirement income to sustain our lifestyle, there’s really no need to remain in expensive San Francisco.

One of the most common paths to building wealth is through homeownership. However, when there isn’t a level playing field for all people to buy a home, then there’s a problem. This article looks at mortgage interest rates by race to see if there are any differences.

Below is a chart highlighting mortgage rates by race by Pew Research. The chart is from 2015 when mortgage rates were much higher than they are in 2021. However, the data is being used to form a baseline.

The first area of the chart to look at is the ALL row to find your baseline. Then you compare the ALL percentage with the percentage next to each race by mortgage rate.

For example, 31 percent of all races paid a mortgage rate of between 3 – 3.9 percent. In comparison, only 25 percent of Blacks paid a 3 – 3.9 percent mortgage rate. Conversely, 38 percent of all Asians paid a 3 – 3.9 percent mortgage rate.

Said differently, 19.35% fewer Blacks paid a mortgage rate of 3 – 3.9 percent compared to all races. Conversely, 22.5% more Asians paid a 3 – 3.9 percent mortgage rate than all races.

Thankfully, mortgage rates between 4 – 5.9 percent don’t look too distorted across all races compared to the baseline.

Notice how the All row percentages are very similar across all mortgage rates to the Whites percentages. This is likely because Whites are the majority race in America.

Obviously, it is better to have a higher percentage of your race paying the lowest mortgage interest rate. With mortgage rates at-or-near all-time lows, hopefully, every race is taking advantage.

For the longest time, I’ve been a proponent of the adjustable rate mortgage (ARM). Paying a higher rate for a longer duration than necessary doesn’t make economic sense. However, with the average 30-year fixed mortgage rate now under 3%, the bias is no longer as heavily weighted towards adjustable rate mortgages.

A sub-3% average 30-year fixed mortgage rate is so low, it must be spurring more people to buy homes. In fact, the average 30-year fixed mortgage rate is just under 3%, despite the 10-year yield ticking up in 2021.

If you’re looking to refinance, check out Credible, my favorite place to refinance a mortgage or get a new mortgage. You’ll get real, no-obligation quotes from competing lenders in minutes. Take advantage of the current mortgage market abnormality!

With a global pandemic still raging on, I am curious to know who is buying a home in this environment. Let’s read some homebuyer profiles of people taking advantage of record low mortgage rates.

As soon as your real estate offer gets accepted, you notify your lender with the relevant ratification documents and lock in a rate. The rate lock is usually for 30 – 60 days. However, sometimes things take longer than expected and you need to get a mortgage interest rate extension. A mortgage interest rate extension is also sometimes called a rate lock extension.

A rate lock is a guarantee assuring that a mortgage lender will honor a specified interest rate at a specific cost for a set period. If mortgage rates go up during the rate lock, the lender will still keep your mortgage rate the same. If mortgage rates go down during the rate lock, you can ask for a new rate lock.

Given the rate lock is usually only for 30 – 60 days, there is pressure on borrowers to make sure they close on homes before the rate lock period expires. If it’s looking like the property will not close within the initial rate lock period, you may need to pay a mortgage rate extension fee.