Prodeje79 Posted June 23, 2005 Report Share Posted June 23, 2005 Please excuse me as I do not know much about home loans. I am planning to get a house and only stay in it for about 5 years. I am pretyt sure I cannot afford a 30 year fixed, so I am leaning towards interest only loans. I cannot seem to find many people that support the interest-only loans though. I was thinking about getting a 5 year arm at a fixed rate for those 5 years. I would probaly then put the house for sale after 4 years and give it a year to sell. It is impossible to tell when/if the interests rates will go up. It seems they have been low for awhile now and can only go up. Please share any information you think is helpful. Quote Link to comment Share on other sites More sharing options...
excell Posted June 23, 2005 Report Share Posted June 23, 2005 Interest only loans are stupid unless you are getting such a good deal that it HAS to make money. BE CAREFUL, because if the housing bubble burts, you are going to be FUCKED on an interest only loan. Left with a house that lost 25% of it's value and no way to get out of it. DO NOT do an adjustable rate mortgage! Those four years will come up FAST and you will be caught with your dick in your hand on number 5. A lot can happen in 5 years. A friend of mine just had this happen to him. He planned to get out of it in four years, and got an ARM. His credit situation has since changed and he cannot refinance nor buy another house, and his ARM just kicked in raising his payment $500 a month! He is forced to sell now and move into an apartment, IF he can sell before he's in deep shit. Otherwise, its foreclosure time. Do a 15 or 30 year fixed, it's the safest way. Quote Link to comment Share on other sites More sharing options...
smokin5s Posted June 23, 2005 Report Share Posted June 23, 2005 80/20 loans > * Quote Link to comment Share on other sites More sharing options...
Akula Posted June 23, 2005 Report Share Posted June 23, 2005 You can do interest only if the property value is going to increase dramatically in the next few years (to make up for the fact that you aren't going to gain any equity in the property). If the property value drops, you will have to sell the house for a loss. If you have good credit get a 15 year mortgage with a bi-weekly payment plan. In 5 years you will almost have 1/3 of the principle paid off and when you sell you will be max positive equity. Quote Link to comment Share on other sites More sharing options...
Prodeje79 Posted June 23, 2005 Author Report Share Posted June 23, 2005 Well it looks like we are getting an appriased value of $180k for the house and the loan is going to be $160k. We are buying it from a family member and getting $20k "gift of equity" or something. I really cannot seem to find an ARM supporter. I am worried about the house bubble bursting, but my understanding is that the bubble is not as big in the Columbus area, let alone Ohio. Quote Link to comment Share on other sites More sharing options...
Orion Posted June 23, 2005 Report Share Posted June 23, 2005 simple interest loan > anything amortized. Quote Link to comment Share on other sites More sharing options...
Guest powers Posted June 23, 2005 Report Share Posted June 23, 2005 Columbus is not in the bubble. We are so far down on the list it is not funny. As far as interest only they are only for certain people depends on your plans and needs. A 15y is the way to go IF you can swing the payment. Alot of people live in homes they cannot afford. To say that ALL ARM's are bad is just a stupid thing to say. Anyone who says it does not know what is available. There is no such thing as simple interest on a mortgage. You will always owe interest that month on what your balance is. The only time this is untrue is on a negitive amortization loan. If you have 20K true equity I would do a pay option arm with a low margin if your are worried about the payments. They carry payment caps not rate caps. The payment cap is 7.5% of the previous minimum payment so you never have to worry about your payment getting out of control. There are just too many options to cover. Ask me specific questions and I will get you real answers. Quote Link to comment Share on other sites More sharing options...
Casper Posted June 23, 2005 Report Share Posted June 23, 2005 I heart Greg Quote Link to comment Share on other sites More sharing options...
OSUGT Posted June 24, 2005 Report Share Posted June 24, 2005 I just did an 80/20 loan. The 80% is interest only for 10 years locked at 5%. The 20 is a 15yr balloon. I'm building the equity in my second mortgage. I'm planning on being out in 5-7 years with the second mortgage paid off and appreciation on the property value. Just my .02 Quote Link to comment Share on other sites More sharing options...
Prodeje79 Posted June 24, 2005 Author Report Share Posted June 24, 2005 Upon running some numbers it seems the 5 year fixed arm will allow more equity to be built up. On a 30 year fixed, it would be around $840/ month. Over 5 years I would build around $10,000 in equity. If I pay the same payment as I would on a 30 year fixed, but towards the 5 year ARM ($600 + $240) = $840 a month, I will build $17,000 in equity over 5 years. FOr sure I do not want to stay in this house long. I will start to try to sell it once 4 years pass. That will give me a full year to sell and get a new house. What am I missing for this scenario? This sounds too good to be true, please enlighten me. :> Quote Link to comment Share on other sites More sharing options...
Guest powers Posted June 24, 2005 Report Share Posted June 24, 2005 this advice is offered becasue you do not plan to take the loan full term or live in this house forever. Take that same money you were gonna use to pay down the balance 17K, put the money into stocks or bonds of some sort, and allow it to grow. Your house will still be worth the same at the end, and your 17K will be more than 17K becasue you invested it in something that will return money to you. You are young take a little risk that is the only way to truely have money. If your not going to stay in it for 30yrs why pay for a rate that will be locked for 30yrs. [ 24. June 2005, 08:20 PM: Message edited by: BIG PAPA ] Quote Link to comment Share on other sites More sharing options...
Buck531 Posted June 24, 2005 Report Share Posted June 24, 2005 If you don't mind Greg, I'd like to call you on Monday and ask you a few questions.. or via PM.. doesn't matter to me. Quote Link to comment Share on other sites More sharing options...
Guest powers Posted June 24, 2005 Report Share Posted June 24, 2005 I can be reatched at the office from 9:30 to 6:30 m-f. 734-1859. It is the easiest way for me to discuss any details due to the fact I will be able to give you numbers. Quote Link to comment Share on other sites More sharing options...
Bam Posted June 25, 2005 Report Share Posted June 25, 2005 Shit, only $840 for 30years on a $160k house? Damn I figured it'd be over a grand a month. I'm looking to buy a condo, actually found a few and should be purchasing mid july, and I think the quotes I've been getting are around $500/month. Still not bad considering to rent the same place would be around $750+/month. Good luck, but honestly if you can only afford to pay the interest, don't do that type of loan, you'll be fucked at the end or when you sell it for sure. Quote Link to comment Share on other sites More sharing options...
Guest powers Posted June 25, 2005 Report Share Posted June 25, 2005 Originally posted by BAM6I4: Shit, only $840 for 30years on a $160k house? Damn I figured it'd be over a grand a month. I'm looking to buy a condo, actually found a few and should be purchasing mid july, and I think the quotes I've been getting are around $500/month. Still not bad considering to rent the same place would be around $750+/month. Good luck, but honestly if you can only afford to pay the interest, don't do that type of loan, you'll be fucked at the end or when you sell it for sure. the payment will be higher than that for 5% interest only loan 160 @5% is 667 a month if he is doing one loan he will be at 88% loan to value using an appraised value of 180K which means he will have mortgage insurance unless he breaks it up into 2 loans pmi would be 81.33 a month then add the 240 amonth for the escrows total interest only payment 988.33 for a fully amortized loan @5% the payment would be 1187.33 FYI if you rae getting quote for 500 a month for a 125K loan the person giving you those quote is on crack. 125k @ 5% (which you wonlt get unless you have a decent down payment) is 671.03 Plus pmi plus taxes plus the homeowners association fee if it's a condo and plus homeowners insurance if it is a home. Quote Link to comment Share on other sites More sharing options...
Bam Posted June 25, 2005 Report Share Posted June 25, 2005 No, sorry, that was for 92k I believe. We've found quite a few condos we like ranging from 80k to around 93k. And that has been thru 5/3, they have mortgages with NO $$ down, and NO PMI. And honestly, all you need is good credit history and job history and your set. I'm not doing an 80/20, and it won't be 5%, I believe it was like 5.33%. I don't remember the specifics, it was about 3 weeks ago when I went over everything with them, but we think we found the right place so I'm going in to talk to our guy on Monday. We'll see. Quote Link to comment Share on other sites More sharing options...
lemosley01 Posted June 25, 2005 Report Share Posted June 25, 2005 Greg, are you a mortgage broker (just curious)? Quote Link to comment Share on other sites More sharing options...
Guest powers Posted June 25, 2005 Report Share Posted June 25, 2005 Originally posted by Larry: Greg, are you a mortgage broker (just curious)? Yup. I manage a small company in dublin. Quote Link to comment Share on other sites More sharing options...
OSUGT Posted June 26, 2005 Report Share Posted June 26, 2005 Its not Infinity mortgage, is it? Quote Link to comment Share on other sites More sharing options...
Guest powers Posted June 26, 2005 Report Share Posted June 26, 2005 nope Alan Benjamin Mortgage Services 5995 wilcox place suite A We have about 15 employees Quote Link to comment Share on other sites More sharing options...
OSUGT Posted June 26, 2005 Report Share Posted June 26, 2005 Thats cool, my brother used to work for Infinity Mortgage. The owner, Greg, was a serious cokehead and ran the thing into the ground. Glad you are not him! Later, Jason Quote Link to comment Share on other sites More sharing options...
Trouble Maker Posted June 26, 2005 Report Share Posted June 26, 2005 Originally posted by BAM6I4: And that has been thru 5/3, they have mortgages with NO $$ down, and NO PMI.Look into that more. When I was looking at houses I contacted 5/3 because I do all of my banking through them as do my parents. With no money down they wanted to bump up my interest rate. The increase in my payments from doing this was about as much as PMI was going to be. The obvious difference being that PMI 'goes away' after you get the house paid down to 80% of the principle. That extra I would have had to pay in interest never goes away. Quote Link to comment Share on other sites More sharing options...
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