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Posted by on May 3, 2007, 6:32 am
I am in a conundrum and need some help.
Mortgage 1- 80% of value would be 30 yr fixed at 6.45 % 0 points, 10%
would be interest only of prime minus 0.5 and 10% down
Mortgage 2- 80% of value 30 yr fixed at 6.125%, 0 points, 10% would be
30 yr fixed at 9 percent and remaining 10% down
Mortgage 3- 93% of value 30 yr fixed at 6.5% with PMI and 7% down
I will probably live in this hous 3-6 years and my income will
significantly go up after year one of the loan.
What do you think?
By the way, I have some personal allegiance ot mortgage 1's bank
Thanks
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Posted by Bill Woessner on May 3, 2007, 7:35 am
On May 3, 6:32 am, palle...@hotmail.com wrote:
> Mortgage 1- 80% of value would be 30 yr fixed at 6.45 % 0 points, 10%
> would be interest only of prime minus 0.5 and 10% down
> Mortgage 2- 80% of value 30 yr fixed at 6.125%, 0 points, 10% would be
> 30 yr fixed at 9 percent and remaining 10% down
> Mortgage 3- 93% of value 30 yr fixed at 6.5% with PMI and 7% down
Assuming prime - 1/2 stays where it is, option 2 is your best bet.
But if the prime rate plummets, again, the first option will become
attractive. That's the gamble you take with variable rate loans.
> By the way, I have some personal allegiance ot mortgage 1's bank
I hope that's not getting in the way of you getting the best possible
mortgage. The rates you cited are on the high side. According to
BankRate.com, the average 30 year mortgage is currently at 5.76%.
That's not HUGELY less than what you quoted, but enough that it's
worth looking in to.
--Bill
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Posted by Daniel T. on May 3, 2007, 12:49 pm
> According to BankRate.com, the average 30 year mortgage is currently
> at 5.76%.
Don't bankrate.com's rates assume a 20% down?
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Posted by Bill Woessner on May 3, 2007, 2:12 pm
> > According to BankRate.com, the average 30 year mortgage is currently
> > at 5.76%.
>
> Don't bankrate.com's rates assume a 20% down?
Probably. Who knows where BankRate.com gets those numbers from. But
the OP was contemplating an 80-10-10 mortgage. I believe that's
usually considered a 20% downpayment for purposes of the primary
mortgage (hence how you get around paying PMI).
Since everyone talked about spreadsheets, I put together one and put
it up for review:
http://woessner.dyndns.org:8080/~bill/Mortgage/
It shows that the 2nd option is the clear winner in terms of total
interest paid. I assume the variable interest rate for option one
stays at 7.75%.
--Bill
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Posted by on May 3, 2007, 3:33 pm
> On May 3, 6:32 am, palle...@hotmail.com wrote:
> > Mortgage 1- 80% of value would be 30 yr fixed at 6.45 % 0 points, 10%
> > Mortgage 2- 80% of value 30 yr fixed at 6.125%, 0 points, 10% would be
> > Mortgage 3- 93% of value 30 yr fixed at 6.5% with PMI and 7% down
> mortgage. The rates you cited are on the high side. According to
> BankRate.com, the average 30 year mortgage is currently at 5.76%.
I don't know where BankRate.com gets their numbers from,
but the Freddie Mac Primary Market survey shows the average
for this week at 6.16% with 0.5 pts. That'd translate to
a touch more without the points.
Frankly, I trust Freddie's numbers more. And, in fact,
Bankrate has, on another page ("Interest Rate Roundup")
their _weekly_ survey showing 6.28% with 0.26 pts - much
more inline with Freddie's numbers.
One expects their "daily rate" to bounce around a bit
and diverge from the weekly one, but the full half-percent
difference they're showing seems a bit odd.
Anyway, 6-1/8 to 6-1/4 sounds pretty normal right now.
--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting
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