 In a financial nightmare, mortgage? |
Help!
We live in flordia and now owe more than the home is worth. we purchase the home 3 and a half years ago for 225k. we got into one of those ARM/intrest only gigs. well the first three ... |
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I have recently vacated a flat that we looked after impeccably. The landlord claims to have found a small stain on a mattress that he describes as the size of a finger nail.
He is now ... |
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The owner of the house I live in told me that in 3-4 weeks I'm going to have to move out !
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Can some one please explain to me in lay mans terms the different ways of paying back a mortgage ie:
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dont know if too many people will know an answer to this but help me if you can.
how will the Chicago Land area's real estate be for the next year or so? i really need it to do well. its ... |
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 Help me come out of this situation.My Landlord is going to sell the property after the contract period.? |
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 Can you buy a home with no money down? |
| My husband and I would love to buy a home but we have no money for a downpayment and can not afford to pay more then $600 a month including the insurance on the house. Is there any way we could do ... |
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jp_poolplayer | Which type of mortgage is best? |
Which is better, 10 yr fixed mortgage or a 30 yr fixed with extra principle payments? |
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swddrb
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the best mortgage is one that's already paid off lol
ok ok
it would depend on too many factors to give a simple answer here
talk to someone you know and trust then make your decisions |
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barraganf2001
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You pay less in interest on a 10 year loan. A 30 year loan you pay a higher interest rate and more interest. The advantage of a 30 year is the lower payment and the longer tax right offs. 30 years give you more flexibility and greater cash flow. This allows you to invest your money in other properties or a Business.
If your looking for a home loan check out: http://www.firstmeridiancapital.com/
It has a calculator that shows you the difference between paying a 15year loan v. 30year loan.
The Home Loan officer is willing to pay for the appraisal. |
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Heather
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the only difference is the payment and the term - if you can afford the 10 year I'd go for it but if you want a cheaper payment take the 30 year - the lower the term the lower the interest rate |
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W. E
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Here is a mortgage calculator - with out going to anyones web page:
http://www.i-mortage.com/mortage-calculator.aspx
If you are looking for a longer tax write off - go with the 30 year - 20 yr or the 15 yr. I think if you can afford the payment, than go with paying if off early is a awsome idea. Not many can do it, and to have your home paid off is a verynice feeling....a 10 yr fixed rate is better than the 30 yr fixed rate. For 10 years your will still have the Mortgage Exception Credit (it lowers your property taxes) and see if you can get the Homestead Exception Credit also - Not sure what state you live in, but you may qualify for other credits too - Go to your local court house, and check it all out, that may help you make up your mind to. You will get a 1099 INT form from your Mortgage Company, at the end of the year, if you can go long form, you can include your interest paid.
Other things to consider:
Talk with a broker, a broker underwrites for many company's (I underwrite for 150 companies) so I only have to pull credit 1 time, and they look at my credit. A single lender (not a broker) has programs available, but they may not be able to help you and your situation, so you go elsewhere, and than that person pulls your credit (see what I mean.) If you shop, your credit is pulled and that is considered a soft pull, for a 30 day period. Just like shopping for a auto, it is good for 30 days. If you apply for a credit card, that is considered a "hard" pull and it drags down your credit score. When looking for a home, please do not apply for a credit card, Department Charge Card, Gasoline Card or make any major purchases, like a auto, etc. This will pull your credit down.
Try to find someone (broker) that will pull your credit one time, and submit your loan application to company's that will go off his credit report. By the way, a loan application is called a 1003, and they will issue you a GFE (Good Faith estimate, with-in 3 days, that is per the RESPA laws, and the TIL (Truth in Lending). This will tell you the up-front closing cost (etc) associated with your loan. This is a estimate only - not the final - but it does help you figure things out.
Good Luck to you - A Broker, who cares, will go over it all with you and be in contact with you daily. The one on one customer service is important, to you, the client, to let you know the whole loan process |
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SCCRealEstateUNCENSORED.com
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In reality both loans are good. There are not really any bad loans, only so called loan officers that put their customers into a loan that does not fit their lifestyle, future goals and financial situation.
If you are trying to compare between the two, it will be really hard because they are both used by two very different types of consumers. Consumers that do not want to stay in the property for more than 10yrs use the 10yr. They might be thinking on moving within 6-7 years so they would normally would get a 10yr fixed to have a 4-3 year cushion in case something happens and they cant move when they originally planned to.
The 30yr fixed are for consumers that are pretty much set on staying on the home for a very long time (normally over 15 yrs).
You can probably compare them both in how much principle you pay on either one BUT short term interest rates have been creeping up that a 10yr fixed has almost the same interest rate as a 30yr fixed. If the 10yr fixed you are comparing it to is an interest only than obviously you will have a much higher advantage in paying more principle with the 30 yr fixed.
Here is an article I wrote about FRM and ARM, I hope you enjoy it:
"Confused about ARMs and FRMs??"
A year ago if you were planning to get a 30-year fixed loan and compared it to a variable loan, you might of chosen what seemed as the best choice at the time. This choice would have been a variable (with a fixed term of course) loan. Today that decision for many homebuyers and homeowners is not as simple.
Today’s variable mortgage rates are very close to the fixed mortgage rates. Why is this happening? Since a year ago the Federal Reserve has raised the Federal Funds rate (short term rates) from 2.75% to 5%.
The Fed’s action has pushed the rate for short-term mortgages higher while long-term rates have kept relatively with out any major changes. Interpretation of these actions is that inflation is threatening to holders of long-term debt and increasing short-term rates is designed to prevent inflation.
What difference does it make to me and what does it mean to potential homebuyers? Obviously it presents a more difficult decision as to what type loan to use when purchasing or refinancing.
A year ago the difference in payments of a 30-year FRM loan was substantial compared to the monthly payment on an ARM loan. Today the difference is not as significant.
A simple solution to the dilemma of a low payment, which could rapidly increase at the end of the fixed term of an ARM is 30-year fixed rate mortgage with an interest only option for 10 or 15 years.
A year ago a 5/1 ARM loan (first 5 years the rate is fixed) at 4.75% for an amount of $650,000 had a payment of $3,390.71. Compare that to an interest only at 6.5%, which has a monthly payment of $3,520.83. This payment is slightly higher but knowing that the interest rate is fixed for next 30 years is a great peace of mind. By fixing a rate for a long term with an option to make interest only payments eliminates the danger of payment increase due to rising interest rates. And to add icing to the cake, when the borrower makes principal payments, the monthly payments are reduced.
This is a great safe option for many homeowner and homebuyers. |
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vetteman
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It totally depends on your financial situation, if you can handle the bigger payments go with the 10 year you would save alot in interest, or do the 30 year and pay it off sooner( as long as there is no penalty) at least then if you get in a tight spot you would'nt have the bigger payment... |
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matchew318
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A shorter term loan will have less interest to pay and usually lower rates than a longer term loan.
You can expect to pay 3x as much per month on a 10 year loan than a 30 year loan. A larger % of the monthly payment will go toward the princepal.
For example:
On a $500k @ 8% (30 year) you would pay a little over $3k a month and in 5 years you would still owe $475k.
The same numbers but a 10 year you would pay around $6k a month and owe $465k in 1 year.
This means you would owe less in 1 year on a 10 year then in 5 years on a 30 year loan.
If you can afford a 10 year loan I suggest you get a 30 year and make the payments of a 10 year. I suggest this because you should pay it off in about the same time maybe less, but if you cant afford it every month you don't have to. |
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~Trey
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Hello jp,
Depends on what the rates are to be and how much in extra principle you will be throwing at the loan.
With the additional info I could definitely give you a amortization schedule to help answer your question.
~Trey |
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JRob
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the best mortgage is the one somebody esle is paying. |
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amolheda
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Hello,
Based on the answers I have read to this point, a 100% downpayment is the best. Because everyone seems to be focussing only on the total interest paid. But Mortgage works very differently.
If you have good income. If the mortgage amount is high enough, the Mortgage Interest and Property taxes paid together are tax deductible. If a couple, married filing jointly is making good income, their tax slab will also be high.
Let's compare the rental expense every month to a mortgage payment.
Rent is not tax deductible and is increased invariably at the end of the lease term. So we all know that rents track inflation, or much worse depending on how personal situations change and how the landlord positions the property.
In case of Mortgage, If you are paying a mortgage and get atleast a 80 / 20 Loan, you will end up paying almost 80% of the monthly repayment in Mortgage. So 80% amount is tax deductible. Secondly, if you add property taxes, almost the entire Mortgage is tax deductible.
If you consider the Federal and state taxes put together, you will see atleast 30% of the total Mortage paid as tax deductible.
So you own a home at two thirds the Mortgage paid.
Now let's look at the benefits of having the mortgage, it fixes your payment for the term of the Mortgage. I have seen situations where the mortgage equals the projected rent for a much bigger home in about 5 to 7 years.
If mortgage interest is tax deductible in your situation, pl. assess based on that. If you can email me your details, I'll be able to let you know what I think personally.
Best regards, |
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Molly R
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It really depends on what you need. If you are trying to pay down the loan fast you could do a 10 year term. The payment is higher and if you get into trouble you can't make a 1/2 payment without hurting your credit. If you go to a 30 year term you could still make the 10 year payments and you would pay it off pretty fast. For example let's say you have a loan for 100,000. With great credit you would get a rate of about 6.625 today on a 30 year fix. The payment on this would be 640.35 a month. On a ten year term your should be able to get 6.25 with a payment of 1123.07. Now let's says you make the 1123.07 payment on the 30 year fixed rate, you would be paid off in 10.24 years. The nice things about doing it the 30 year way is you are able to make the lesser payment if something happens. Anyway, I would go see a mortgage broker and have them run the numbers on your loan and see what you come up with.
Hope this helps. |
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mzfilly
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The answer is simple... mortgage companies agree: you can always pay more, but you can NEVER pay less.
Take the longer term and make principle payments whenever you can. This is the way to avoid years of interest (which is front end loaded into all fixed rate loans). Anyone with a loan calculator can give you payments for any term with a few clicks of a button. 40 year to 2 year... it's just a different keystroke!
Now you can have 30-40 years of write offs, equity that you build yourself, and flexibility of payments over that time frame. Having a bad month? Pay your required payment. Having a bang-up month? Plunk down a chunk of principle. EASY.
Always pay more... |
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