Mortgage Professional (to check my statements)?

Leveraging, renting vs owning, making an investment or buying a home?
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MikeVB
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Mortgage Professional (to check my statements)?

Post by MikeVB » 13 Jun 2017 01:28

Could anybody advise of a company or organization or law firm I might ask to look over my mortgage statements? The bottom line is, I suspect that I owe substantially less than my principal indicates. Here's some very brief information:

In 1998 I purchased a home for $180,000 USD. Around, perhaps, 2004 I refinanced. I refinanced once more in 2010. All mortgages were for 30 years fixed, and somewhere in the vicinity of 3-5% interest (obviously I financed for lower interest rates). My mortgage has also been passed to and between at least 3-4 servers now (Ocwen, Chase, et al.) since 1998.

The rub is, after almost 20 years (next year/2018), or at this moment, I still owe approximately $130K from my original $180K. A friend of mine purchased in 2011 for $190K and now owes $100K. Since I refinanced at around $160K in 2010, why is there such a huge discrepancy between what I owe and what my friend owes? Something seems very fishy to me,

I believe that I DO have all my mortgage statements, but this is the first and probably only house I've ever purchased, and frankly I've been happy enough with my low monthly mortgage rates to just accept things and am still a novice on mortage statements and payments. I only this year began to question whether or not my principal should be lower and can't shake the nagging feeling that there's a possibility I'm being bamboozled somewhere.

That said and again, is there some person, title of person, lawyer or company that one might employ to professionally look over my statements with a fine tooth comb to tell me if things are OK, or if I actually owe less on my house? I guess I'm wondering if there's an H&R Block for mortgage problems.

Thank you for any help or suggestions you might have. - Mike

brucecohen
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Re: Mortgage Professional (to check my statements)?

Post by brucecohen » 13 Jun 2017 09:27

Mike, this is a Canadian forum and Canadian mortgages are structured much differently than those in the US. You can probably get help by posting on our sister US forum, Bogleheads.

cr21
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Re: Mortgage Professional (to check my statements)?

Post by cr21 » 13 Jun 2017 17:53

If you reset the amortization period on each refinancing (ie. extend the mortgage the full 30 years from the date of the refinancing) then the numbers look plausible.

Without knowing the exact details it is impossible to be precise, but using an online mortgage calculator:

$180,000 in 1998 @ 5% over 30 years would have a principal balance of $161,743 in 2004
$161,743 in 2004 @ 5% over 30 years would have a principal balance of $143,026 in 2010
$143,026 in 2010 @ 4% over 30 years would have a principal balance of $126,475 in 2016

Your specific mortgage would have had different rates and different rules for precisely when interest compounds, and may have had a built in insurance component or they rolled refinancing fees into the principal each time ... but if you were optimizing for a low monthly payment it would be reflected in a much longer payback period.

MikeVB
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Re: Mortgage Professional (to check my statements)?

Post by MikeVB » 13 Jun 2017 19:33

Thanks for your responses folks, both of which provide good advice. Separately today, I did the basic math in calculating alternatively the aggregate principal I've paid (roughly) over the 19.x years and believe it or not, subtracting it from the amount owed when I started it came out to almost exactly what is indicated I currently owe.

Certainly I should have approached things that way (and or other ways) before posting but still appreciate the help and input here. All is good now and I can let go of the conspiracy theories all us Americans love (haha).

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Re: Mortgage Professional (to check my statements)?

Post by OptsyEagle » 14 Jun 2017 10:12

One last piece of advise. Stop re-amortizing your mortgage for 30 years every time it comes up for renewal. I am sure you are enjoying the low monthly payments but you need to know that if you keep re-amortizing your mortgage that it is a mathematical impossibility for you to ever pay off your mortgage. You could transfer that house and mortgage down 5 generations and someone will still owe money on it if you keep doing that.

If you have a 30 year amortization when you start a mortgage and 5 years later you renegotiate it, at the very least you should not have more then a 25 year amortization when you leave the renewal bank's office. Hopefully you can see how that works.

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Re: Mortgage Professional (to check my statements)?

Post by Peculiar_Investor » 14 Jun 2017 10:21

OptsyEagle wrote:
14 Jun 2017 10:12
One last piece of advise. Stop re-amortizing your mortgage for 30 years every time it comes up for renewal.
Remember that the OP is American and the US mortgage rules and specifically mortgage interest deductibility (tax advantage) on their tax returns changes the equation and philosophy.
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Re: Mortgage Professional (to check my statements)?

Post by AltaRed » 14 Jun 2017 10:26

Yeah, but that ultimately incites the wrong behaviour. I personally like Canadian rules much better as it helps (or should help) motivate owners to pay down their mortgage ASAP.

Alas, current interest rates just causes most of them to use their house as an ATM. Sad....really sad. It is scary to look at this kind of stuff....

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adrian2
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Re: Mortgage Professional (to check my statements)?

Post by adrian2 » 14 Jun 2017 14:46

Peculiar_Investor wrote:
14 Jun 2017 10:21
OptsyEagle wrote:
14 Jun 2017 10:12
One last piece of advise. Stop re-amortizing your mortgage for 30 years every time it comes up for renewal.
Remember that the OP is American and the US mortgage rules and specifically mortgage interest deductibility (tax advantage) on their tax returns changes the equation and philosophy.
For more than half of US people with a mortgage, they can deduct a big fat $0 of mortgage interest on their taxes.
It's very far from what we consider a tax deduction, e.g., RRSP contribution.
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kcowan
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Re: Mortgage Professional (to check my statements)?

Post by kcowan » 14 Jun 2017 16:48

Yes AMT plays a huge role but the myth continues...
For the fun of it...Keith

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Re: Mortgage Professional (to check my statements)?

Post by adrian2 » 14 Jun 2017 19:20

kcowan wrote:
14 Jun 2017 16:48
Yes AMT plays a huge role but the myth continues...
Not so much the AMT, but the standard vs. itemized deductions.
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Re: Mortgage Professional (to check my statements)?

Post by OptsyEagle » 16 Jun 2017 09:56

Peculiar_Investor wrote:
14 Jun 2017 10:21
OptsyEagle wrote:
14 Jun 2017 10:12
One last piece of advise. Stop re-amortizing your mortgage for 30 years every time it comes up for renewal.
Remember that the OP is American and the US mortgage rules and specifically mortgage interest deductibility (tax advantage) on their tax returns changes the equation and philosophy.
I don't disagree, but I believe the OP's issue was the lack of principle reduction on his mortgage over the years he had been paying. It is his "re-amortization" behaviour that is causing this. He obviously is not familiar with how a mortgage is amortized or he would not have needed someone else to confirm the bank's numbers, so I thought I would help him understand it a little better, so that he doesn't repeat the same mistake.

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