Another Mortgage Question
Any advantage to a variable rate mortgage over a fixed ? And whats the consensus here , most guys on 30 year fixed rate ? Rookie first time buyer here .. thanks
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Go with a fixed rate, 15 year mortgage. Keep the total payment to 25% of your take-home pay. Otherwise, you won't own the house; it will own you. 0 -
I go with a fixed unless you are planning to live in your house for less than three years.
With interest rates where they are, it is silly to NOT go with a fixed.0 -
Mortgage rates are very low right now, go with the fixed rate. There probably isn't that much difference between them anyway to justify the risk of future rate increases. 0 -
If you choose a 15yr over a 30 yr fixed of course your payments are higher. The advantage of the 30 over the 15 is payments will be less. Of course you may send in additional principal only each month or when you have extra cash on a 30 yr to reduce the term of the loan. Do not paint yourself in a corner if times get hard and your payment is high on a 15yr loan. Just an option to consider. You may also tell your lender that you will not want an escrow account for taxes and insurance. Pay them out of pocket instead of the bank doing it for you. They will usually overcharge you and hold excess monies in an escrow account. Once a year or whenever they feel like it they will bill you for being under insurance estimates or refund if overcharging. BS ... do your own payments on taxes and insurance. 0 -
quote:Originally posted by select-fire
If you choose a 15yr over a 30 yr fixed of course your payments are higher. The advantage of the 30 over the 15 is payments will be less. Of course you may send in additional principal only each month or when you have extra cash on a 30 yr to reduce the term of the loan. Do not paint yourself in a corner if times get hard and your payment is high on a 15yr loan. Just an option to consider. You may also tell your lender that you will not want an escrow account for taxes and insurance. Pay them out of pocket instead of the bank doing it for you. They will usually overcharge you and hold excess monies in an escrow account. Once a year or whenever they feel like it they will bill you for being under insurance estimates or refund if overcharging. BS ... do your own payments on taxes and insurance.
I do my own insurance, but I escrow the taxes. Taxes are easy -- the state gives you plenty of notice that taxes change. In the first year, we got a huge refund. Each subsequent year, we've had to kick in a little extra to cover the taxes.
I'd rather have to kick in a few extra bucks and have the money accrue interest over there than to have to pony up my terrible taxes all at once.0 -
We refinanced 4 years ago and went with a 20 year fixed. Only 16 more years to go. A lot better than 26 years to go but not as a good as 11. 0 -
30 year fixed is the safest. 15 year is nice AND the interest rate is lower.
Never, EVER go with those ripoff companies that make the biweekly payments for you, they are such a scam!
I have never heard of a bank or mortgage company that will let you make your own tax and insurance payments - and I have tried.0 -
quote:Originally posted by slipgate
30 year fixed is the safest. 15 year is nice AND the interest rate is lower.
Never, EVER go with those ripoff companies that make the biweekly payments for you, they are such a scam!
I have never heard of a bank or mortgage company that will let you make your own tax and insurance payments - and I have tried.
You must not be asking the right way.
Each time I have signed a new mortgage, I've simply told them that I'll handle the insurance and they can escrow the taxes. I never even get an argument.
All the bank really wants to know is that the place is insured. You have to send them a copy of the declarations page annually showing that their name is listed as the mortgage holder and that the policy is in place for the next term.0 -
quote:Originally posted by slipgate
30 year fixed is the safest. 15 year is nice AND the interest rate is lower.
Never, EVER go with those ripoff companies that make the biweekly payments for you, they are such a scam!
I have never heard of a bank or mortgage company that will let you make your own tax and insurance payments - and I have tried.
My current mortgage co. lets us make our own taxes and insurance. Mortgage years ago was the same. I borrowed money on our home after I built it. 30 yr fixed. I send in a few extra hundred a month and bingo.. mortgage will be paid off in around 14-15 yr. Here is a calculator to figure it out. Rates are super low now, so a .005 rate difference between a 15 and a 30 year is pennies a day. Big deal. I now have money to invest which will sure make more for us than the 5.75 rate on the house. I also needed a mortgage exemption for tax purposes.
http://www.mortgage-net.com/calculators/mp_cl.html0 -
quote:Originally posted by slipgate
30 year fixed is the safest. 15 year is nice AND the interest rate is lower.
Never, EVER go with those ripoff companies that make the biweekly payments for you, they are such a scam!
I have never heard of a bank or mortgage company that will let you make your own tax and insurance payments - and I have tried.
Many loan products do not require taxes and insurance to be escrowed, but you will pay a higher rate or pay a premium in closing costs. The better loans such as FHA do require both to be escrowed.0 -
Please stay away form the variable rate mortgages unless you can afford to 1)refinance at anytime 2)you can afford to pay the 30 year payment and actually do pay the difference to a safe side investment.
Getting people out of variable loans who couldn't afford the rate changes has become a full time job. A few clients are in bankruptcy now because they would not listen.[V]0 -
Your name is Johnny B. Goode.
You are like most Americans and are granted credit far beyond what you will ever, ever, ever will make.
You borrow too much as homes are insanely priced as well as automobile and find yourself needing 55 years to pay off a debt, yet you have around 30 years to live.
Are you enslaved? You did have a choice of no home. Enjoy your privelege of Jew forced capitalism as your demise finances many Jewish families in Israel and New York.
The guarantees to Life, Liberty, and the Pursuit of Happiness are all but forgotten in America.0 -
If you can't put 20% down on the mortgage then don't bother. You'll end up paying for it in the end. 0 -
Taxes and insurance plus mortgage insurance are added onto the loan package until you have 20% equity in the property in order for the lender to guarantee repayment should you default. Once you have 20% equity in the property they figure even if you default they can make a quick sale of the foreclosed property for 80% of the actual value. Personally, I would go with a 3 year Variable Rate loan since rates are going down and it looks as if the industry is going to force the rates even lower. 0 -
quote:Originally posted by ObiWan
Your name is Johnny B. Goode.
You are like most Americans and are granted credit far beyond what you will ever, ever, ever will make.
You borrow too much as homes are insanely priced as well as automobile and find yourself needing 55 years to pay off a debt, yet you have around 30 years to live.
Are you enslaved? You did have a choice of no home. Enjoy your privelege of Jew forced capitalism as your demise finances many Jewish families in Israel and New York.
The guarantees to Life, Liberty, and the Pursuit of Happiness are all but forgotten in America.
My mortgage holder is a Methodist and I'll be debt free and retired comfortably by 53. I don't feel like a slave to the Jews.0 -
quote:Originally posted by sav99
quote:Originally posted by slipgate
30 year fixed is the safest. 15 year is nice AND the interest rate is lower.
Never, EVER go with those ripoff companies that make the biweekly payments for you, they are such a scam!
I have never heard of a bank or mortgage company that will let you make your own tax and insurance payments - and I have tried.
Many loan products do not require taxes and insurance to be escrowed, but you will pay a higher rate or pay a premium in closing costs. The better loans such as FHA do require both to be escrowed.
Please explain how you feel an FHA loan is better than a conventional loan at a Bank? And how do you explain paying a higher closing cost cause the taxes and insurance are not escrowed?0 -
quote:Originally posted by bigdaddyjunior
quote:Originally posted by ObiWan
Your name is Johnny B. Goode.
You are like most Americans and are granted credit far beyond what you will ever, ever, ever will make.
You borrow too much as homes are insanely priced as well as automobile and find yourself needing 55 years to pay off a debt, yet you have around 30 years to live.
Are you enslaved? You did have a choice of no home. Enjoy your privelege of Jew forced capitalism as your demise finances many Jewish families in Israel and New York.
The guarantees to Life, Liberty, and the Pursuit of Happiness are all but forgotten in America.
My mortgage holder is a Methodist and I'll be debt free and retired comfortably by 53. I don't feel like a slave to the Jews.
My whopping mortgage is about 40K, which I could pay off any time I wish.
I have no other "debt", paid cash for the vehicles, and hope to beat bigdaddyjunior and retire fully at 50.
Curious to see if anti-semitic remarks get poofed as fast as "rascist" remarks do around here.
To the point of the original thread,.......get a fixed loan, 15 year if you can float it, unless you don't expect to live in the same place for more than 5 years.
20% equity is required to be released from an escrow account, as stated previously. Avoid PMI insurance like the plague,........save enough to put at least 10% down.0 -
I agree with select-fire, but I would add make sure you don't have a "pre payment penalty" in the contract. 0
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