Bam Posted September 25, 2007 Report Share Posted September 25, 2007 Once again, borrowing such a small amount at 30 years does not benefit you. On a 15 yr mortgage your payment is 674/month compared to 474 at 30 years plus after 5 years with a 15 yr you have almost 20k of extra equity in the home Once again I'll reiterate, there is NO benefit rate wise to take out a 20 year mortgage over a 30 year mortgage, SO I'm going to take out a 30 year mortgage, and 99% of the time pay the amount a 15/20 year mortgage would be, with that excess going principal, but having the freedom that if something comes up one month and I can't make that extra payment, being able to still cover my mortgage fine. Understand? I'll have $20k equity immediately I would think, as I'm putting down close to $30k and paying about $15k under value. But who knows. And bill, I didn't mean to come across mean, but you agree that you were clueless as to the way the housing market/mortgage business worked and obviously you got taken somewhat, as do millions of americans and that's what puts us in the epidemic. My question to you is, if you hadn't gotten divorced, and you still owned the same home you back 4-5 years ago, where would you stand? Wouldn't you have some equity, wouldn't you be glad to own your home, etc? My point is, no one can plan for the future entirely, you had no clue you'd get divorced, causing you to have to sell the house, causing you to lose money after a few years, ETC ETC, it never ends. And pdgpd or something, I'm currently debt free, have some investments and have money saved, I don't understand how me taking a 30 year mortgage is bad, or that you know if I will/won't prepay on the mortgage. As I've said, there is no rate benefit to me doing a 20yr loan over a 30yr. Its all the same if I do the 20 year, or do the 30 year and make the 20yr payments, so why not give myself that cushion, as you say? Quote Link to comment Share on other sites More sharing options...
LJ Posted September 25, 2007 Report Share Posted September 25, 2007 Once again I'll reiterate, there is NO benefit rate wise to take out a 20 year mortgage over a 30 year mortgage, SO I'm going to take out a 30 year mortgage, and 99% of the time pay the amount a 15/20 year mortgage would be, with that excess going principal, but having the freedom that if something comes up one month and I can't make that extra payment, being able to still cover my mortgage fine. Understand? Then get a 10 year interest only with no balloon payment and no prepay penalty. Then put $100/month towards principal over your payment. That would put you at $504@ 6.5% Quote Link to comment Share on other sites More sharing options...
Bam Posted September 25, 2007 Report Share Posted September 25, 2007 Then get a 10 year interest only with no balloon payment and no prepay penalty. Then put $100/month towards principal over your payment. That would put you at $504@ 6.5% How does that make financial sense? I'm pay $404/month in interest alone, never touching my pricinpal, so that in 10 years from now I still owe my original mortgage amount? What? Quote Link to comment Share on other sites More sharing options...
LJ Posted September 25, 2007 Report Share Posted September 25, 2007 How does that make financial sense? I'm pay $404/month in interest alone, never touching my pricinpal, so that in 10 years from now I still owe my original mortgage amount? What? No, you pay $404 +$100= $504/month Your interest amount still goes down, as does your principal. Something happens and you can't pay $504, all you have to pay is a low interest payment. Quote Link to comment Share on other sites More sharing options...
TTQ B4U Posted September 25, 2007 Report Share Posted September 25, 2007 I've not said you have debt or don't have investments or money saved?? not sure where that came from? I also didn't say a 30yr note is bad. I have one....although I won't take anywhere near 30yrs to pay it off....and if you do the same, good for you....I never indicated otherwise. And pdgpd or something, I'm currently debt free, have some investments and have money saved, I don't understand how me taking a 30 year mortgage is bad, or that you know if I will/won't prepay on the mortgage. As I've said, there is no rate benefit to me doing a 20yr loan over a 30yr. Its all the same if I do the 20 year, or do the 30 year and make the 20yr payments, so why not give myself that cushion, as you say? Quote Link to comment Share on other sites More sharing options...
Bam Posted September 26, 2007 Report Share Posted September 26, 2007 No, you pay $404 +$100= $504/month Your interest amount still goes down, as does your principal. Something happens and you can't pay $504, all you have to pay is a low interest payment. Ok, but what I don't understand is why I should pre-pay all the interest when I won't be there that long. And a $75k mortgage would only be $474/month, or $70/more than the interest along in your option. I'm still not understanding why you would recommend that? Quote Link to comment Share on other sites More sharing options...
LJ Posted September 26, 2007 Report Share Posted September 26, 2007 Ok, but what I don't understand is why I should pre-pay all the interest when I won't be there that long. And a $75k mortgage would only be $474/month, or $70/more than the interest along in your option. I'm still not understanding why you would recommend that? You definitely aren't. If you can't understand it, I am not going to try to explain it again because I don't want you trying to do something you won't understand. I never once said pay interest only on a normal basis. I said get an interest only loan. You only have that option for 5-7-10 years on a 15-30 yr mortgage Quote Link to comment Share on other sites More sharing options...
Bam Posted September 26, 2007 Report Share Posted September 26, 2007 Oh, I didn't realize that you still got a normal mortgage term, just the beginning was IO. I wondered how you could say no ballon payment or prepayment penalty. Now I understand it, but I still wouldn't use it personally. Thanks for the info though. Quote Link to comment Share on other sites More sharing options...
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