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May 6, 2008
Mortgage?
We are likely taking a $1M mortgage. Any suggestions where to look for the best rates? What are current 30 year fixed rates these days? The house is a place we envision living in for the long term. That being said, thoughts on a 30 year fixed vs a 7 or 10 year ARM... Any advice would be greatly appreciated....
thanks
Comments
Take a 30 year if you are going to hold onto it for 30 years. Otherwise get a short term rate and sell before it adjusts.
Would you ever move and hold onto it as a rental? If so, go long term.
Also, is the building up to code? If not make the alterations now, get the long term loan and never bother with the codes and the refianceing again.
Posted by: guest at May 6, 2008 9:14 AM
Look the rates up yourself lazy ass.
Posted by: guest at May 6, 2008 9:25 AM
go to bankrate.com
I think you will hve to get something called a "jumbo mortgage" and you might not be able to get a 30 year jumbo mortag
Posted by: guest at May 6, 2008 1:46 PM
As a financial professional I would recommend that you use a fixed rate 30 year mortage.It may cost a little more to establish but this may be the last time in many years that rates may be this low.The large money center banks are probably your best bet.
Posted by: guest at May 6, 2008 9:16 PM
I agree with the 9:16 post. We are currently seeing some of the lowest rates in history. a 30 year fixed is the way to go and its what i have taken out.
bankrate.com is a good source
Posted by: guest at May 7, 2008 10:42 AM
you should talk to the broker we used when we bought a few months back,
Ari @ Landmark Funding Group 212-710-8680
Posted by: guest at May 7, 2008 5:18 PM
If you plan to stay in the house 7-10 yrs or so, would you still recommend 30yr fixed? Why not interest-only?
Posted by: guest at May 7, 2008 5:32 PM
I second the question posed by 5:32. If you anticipate staying in a house for 7 years for example, why not just have an interest only loan? The only negative I can think of, is that if property values go down, then you will have to make up the difference if/when you sell. Let's say I'm willing to take that gamble. Is there another factor that would sway one towards paying down principle on a temporary home?
Posted by: guest at May 7, 2008 8:22 PM
You can check with Wells Fargo.
www.myrenovationfinancing.com
Posted by: guest at May 7, 2008 9:04 PM
people like to pay down principal because it's forces you to save money.
also because it gives you a little buffer in the event you need to make a quick sale for unforseen reasons and the housing market is slumping.
Posted by: guest at May 8, 2008 10:47 AM
these comments are all well intentioned, but they miss the essential point: the best mortgage is the one that works for you in your financial situation. It sounds like you've found your house and you know how much you'll need to borrow. That's step one. The next step, BEFORE you look at rates, is to decide how much you can realistically afford in a monthly payment. The 30-year fixed rate mortgage is often (not always) the lowest monthly payment, because you stretch your principal payments out over 30 years, which in turn lets you buy a more expensive house - but that's not an issue for you right now. You will pay a higher interest rate than, say, a 15-year fixed rate mortgage. Adjustable rate mortgages used to be considerably cheaper, but are now sometimes even more expensive. As of today, bankrate was quoting the national average 30-year jumbo rate (what you'll need if you borrow more than about 415K) at 6.99%, with a 5-year adjustable rate (jumbo) at 6.19%. the adjustable rate might work better for you if you believe your financial picture will improve in the years to come, allowing you to a) refinance or b) pay a higher rate (at least for a while) if rates do move higher. Whatever anyone tells you, NEITHER a fixed rate or an adjustable rate is "risk free." They just have different risks: a fixed rate confers the risk that interest rates will go down, and you'll be stuck paying too much, while an adjustable rate gives you the risk that rates will go up, and you'll have to pay more. Either way, you could (hopefully) refinance your way out of a bad deal. Pick the mortgage that gives you a payment schedule you are most comfortable with financially. Talk to a mortgage broker and see what they can do for you, and ask at your bank as well. Shop around: you are the customer, and the banks do want your business, so make them earn it.
Posted by: slopenick at May 8, 2008 3:19 PM
Slopenick, did you really just say that ("Either way, you could (hopefully) refinance your way out of a bad deal.") -- have you been under a rock for the last two months?
You might be able to refinance your way out of a bad deal, you might not. You might end up being part of the next foreclosure crisis. If rates fall and you have maintained good credit, you might be able to re-negotiate a fixed rate mortgage, but I wouldn't enter an ARM on the theory that you can just refinance later if interest rates skyrocket.
It sounds like OP should do a lot more research about how mortgages work before s/he signs a million dollar one. Do a web search for "Understanding Mortgages" or check out on of PACC's first time homebuyer classes.
http://www.prattarea.org/homeservices.htm
PS. I'm with 9:25 on looking up the rates for yourself. Any newspaper with a real estate section publishes that information.
Posted by: amanda at May 8, 2008 5:13 PM
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