99ta Posted September 14, 2008 Report Share Posted September 14, 2008 if you have a 5 yr interest only arm. when your 5 years is up, do the remainder payments go directly to the principle? is there a way to tell how much your payment will go up? Quote Link to comment Share on other sites More sharing options...
rch10007 Posted September 14, 2008 Report Share Posted September 14, 2008 Read: http://www.federalreserve.gov/pubs/mortgage_interestonly/ Quote Link to comment Share on other sites More sharing options...
iwishiwascool Posted September 14, 2008 Report Share Posted September 14, 2008 if you have a 5 yr interest only arm. when your 5 years is up, do the remainder payments go directly to the principle? is there a way to tell how much your payment will go up? Is this the type of mortgage you have? Quote Link to comment Share on other sites More sharing options...
iwishiwascool Posted September 14, 2008 Report Share Posted September 14, 2008 I dont have time to wait for your answer. Lets say you purchase a $100,000 house at a 5% interest rate. Your interest on the first year is about $450/mo. That is your payment (less tax and insurance). You are paying zero dollars to your principal. The following 5 years you are doing the same... you are only paying the interest for THAT year. When your ARM is over you will be liable for the interest in addition to principal payments AND your interest rate will adjust to whatever the terms of your loan dictate. The only way this loan could have worked in your favor is if you planned to renovate and resell the property in a short time, or if the market drove the price of the home up exponentially thereby granting you equity. In other words you are fucked and an idiot for not knowing what you were doing when you signed for this loan. Let me know when the house goes to auction. Quote Link to comment Share on other sites More sharing options...
rch10007 Posted September 14, 2008 Report Share Posted September 14, 2008 All he has to do is refinance. Quote Link to comment Share on other sites More sharing options...
99ta Posted September 15, 2008 Author Report Share Posted September 15, 2008 thanks for the heads up Ken, lol. But I could sell the house now for 20k profit and we make 2x the money now than we did. I knew what I was chosing, my wife was in school full time. so basically after the 5 years i will be paying a 25yr fixed loan? I think we are going to sell anyway, want something bigger. thanks for the info guys. Quote Link to comment Share on other sites More sharing options...
FormulaMatt Posted September 15, 2008 Report Share Posted September 15, 2008 thanks for the heads up Ken, lol. But I could sell the house now for 20k profit and we make 2x the money now than we did. I knew what I was chosing, my wife was in school full time. so basically after the 5 years i will be paying a 25yr fixed loan? I think we are going to sell anyway, want something bigger. thanks for the info guys. I have never seen one that is fixed, though Im sure I have not seen everything. Most are adjustable. I would start looking into refinancing and go to a fixed rate. Quote Link to comment Share on other sites More sharing options...
Akula Posted September 15, 2008 Report Share Posted September 15, 2008 thanks for the heads up Ken, lol. But I could sell the house now for 20k profit and we make 2x the money now than we did. I knew what I was chosing, my wife was in school full time. so basically after the 5 years i will be paying a 25yr fixed loan? I think we are going to sell anyway, want something bigger. thanks for the info guys. There is one flaw in your original logic. Someone has to buy the house. Quote Link to comment Share on other sites More sharing options...
iwishiwascool Posted September 15, 2008 Report Share Posted September 15, 2008 All he has to do is refinance. With the info presented I made the assumption that refinancing would be a challenge with the more recent constraints on loan approvals. Quote Link to comment Share on other sites More sharing options...
Putty Posted September 15, 2008 Report Share Posted September 15, 2008 Refi Quote Link to comment Share on other sites More sharing options...
99ta Posted September 15, 2008 Author Report Share Posted September 15, 2008 your right selling the house might be the hard part, althought I do have a lot of room to work with and its a very nice house with a great location. and I can refi, already looked into it. I am not worried, I just didn't know what happened after the 5 years was up. my payment could triple and I would still be fine.... Quote Link to comment Share on other sites More sharing options...
Stallion Motorsports1647545491 Posted September 15, 2008 Report Share Posted September 15, 2008 In other words you are fucked and an idiot for not knowing what you were doing when you signed for this loan. Let me know when the house goes to auction. this made me laugh. Quote Link to comment Share on other sites More sharing options...
99ta Posted September 15, 2008 Author Report Share Posted September 15, 2008 this made me laugh. me too, seeing how he is the idiot for not knowing anything about the situation. Quote Link to comment Share on other sites More sharing options...
iwishiwascool Posted September 15, 2008 Report Share Posted September 15, 2008 me too, seeing how he is the idiot for not knowing anything about the situation. Chances are he was laughing at you not with... The situation is clear that you were duped by a predatory lender who showed you the short term pros of your ridiculous loan... but surely, reassured by your presentation and demeanor, left out the ramifications of such a short sighted venture with more than reasonable certainty that you wouldn't do your own investigation into its long term impact. This "idiot" is sitting on a 30yr Fixed at 5.25% with double your equity. Quote Link to comment Share on other sites More sharing options...
99ta Posted September 15, 2008 Author Report Share Posted September 15, 2008 really? how much equity is in my house? come on....your the smart one here? your an idiot because you don't know anything about me or my situation but yet you think you do. we may have been laughing at you for different reasons. Quote Link to comment Share on other sites More sharing options...
99ta Posted September 15, 2008 Author Report Share Posted September 15, 2008 I bet you drive a cougar and make $140k a year too..... Quote Link to comment Share on other sites More sharing options...
99ta Posted September 16, 2008 Author Report Share Posted September 16, 2008 thanks for the help Ken, but I knew what loan I was chosing. the plan was only to keep for a few years, and there was so much equity in it we wouldn't have a problem selling it. triple because I can.. Quote Link to comment Share on other sites More sharing options...
Guest GMoney Posted September 16, 2008 Report Share Posted September 16, 2008 thanks for the help Ken, but I knew what loan I was chosing. the plan was only to keep for a few years, and there was so much equity in it we wouldn't have a problem selling it. triple because I can.. If you knew what loan you were getting yourself into, tell me again why you started this thread? On serious note, If you really have equity in your house and it is aleast 20% refi today to fixed 30 year or 15 if you can afford it. You are going to lose your mind when see your payments after the 5 years is up. You basically have to back pay all that you have been not paying for the past 5 years. It will go on top of the normal payment for a standard 25 year with normally a adjustable rate. Quote Link to comment Share on other sites More sharing options...
Tractor Posted September 16, 2008 Report Share Posted September 16, 2008 Hehe maybe it was one of those 30yr interest only loans that MI was selling:-) Oh btw wife says she got an email today at work (she's a 5/3 manager) and prime is going down 1/2%. I wasn't in my car much today so didn't get to hear anything myself. They were giving notice to the branches to expect a lot of refi's. Evan Quote Link to comment Share on other sites More sharing options...
rch10007 Posted September 16, 2008 Report Share Posted September 16, 2008 If you knew what loan you were getting yourself into, tell me again why you started this thread? Here was the question he asked, "is there a way to tell how much your payment will go up?" The answer is yes, there is a way to figure it out. He didn't say..."I'm screwed becasue I'm an idiot!" There are many valid reasons to purchase using an IO ARM. If you ever decide to flip homes, you will be taking out IO ARM's yourself, so to assume the OP is in trouble, is wrong, imo... Maybe he is in trouble, but he asked a simple question. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.