Home loans, down payments, etc
- Thread starter Eric
- Start date
You can get just about anything today from zero down to 40 year mortgages. A lot depends on
1. Why you are buying
2. How long you plan to live there
3. Your credit score
Investors are doing 40 year loans aout here in hopes to cash in on the bubble. Personally, if your looking to buy to live and stay, interest rates are still very good compared to the last 20 years. 30 year fixed is actually down in the midwest. Call a good mortgage broker and let them work for you.
cvm4
BoM - July '05 & Dec. '10
I've been listening to Dave Ramsey a lot and some people are actually doing a 50 year mortgage!!! Geez could you imagine paying on your house for 50 years? That's a case of buying too much house than you can actually afford. I would atleast put 10-15% down and go no bigger than a 30 yr. mortgage. But would try to do a 20 year just so I could pay down the principle quicker and not pay so much in interest.
Most of those 40-50 year mortages, interest only mortgages and such are found in Cali as the price of housing out there is sky high and that's the only way some people can get into a house.
A 15 year mortgage is your best choice IMHO. Alot of people simply can't afford the payments for one. 30 year is the standard and as CWS stated, a big part of the equation is going to be your credit score. That will go a long way in deciding what kind of rate you are going to get. The second biggest part of the equation (if not equally or more important) is how long you plan on being in the home. If you aren't planning on staying in one home for a very long time I'm not sure there's a huge difference between a 15 or 20 or 30 year mortgage.
A 15 year mortgage is your best choice IMHO. Alot of people simply can't afford the payments for one. 30 year is the standard and as CWS stated, a big part of the equation is going to be your credit score. That will go a long way in deciding what kind of rate you are going to get. The second biggest part of the equation (if not equally or more important) is how long you plan on being in the home. If you aren't planning on staying in one home for a very long time I'm not sure there's a huge difference between a 15 or 20 or 30 year mortgage.
I think a standard 30 yr mortgage is fine. If you simply make one extra house payment per year (very easy to do for almost all buyers), you will decrease the payoff by 8 years and save many thousands in interest. To do this, divide your normal monthy payment by 12 and then add this amount to your payment each month.
Example: Normal 30 yr payment = $1200
Divide by 12 = $100
Add to regular payment ... so you will pay $1300 each month.
Another bonus is that this extra amount is going directly to pay down the principal ... so you are gaining equity every month.
Example: Normal 30 yr payment = $1200
Divide by 12 = $100
Add to regular payment ... so you will pay $1300 each month.
Another bonus is that this extra amount is going directly to pay down the principal ... so you are gaining equity every month.
My advice is bend over and grab your ankles because the bankers are coming.
Tips, Generally speaking from a homeowner since marriage in 1994: Do as much research before making any decisions. Know your credit score as Chuck says, can try www.freecreditreport.com for starters. Look at your short term in 0-5 years, mid term 6-12 years, and long terms 12 plus year needs, what direct thinks are going in. Things like marriage or divorce, children if you have them or plan to have them, student loans owed or planing on owing, children tuitions to pay for, medical needs for self, spouse, or loved ones. Personally I hate variable rate and even more-so the newer hybrid tax only loans. Those seemed like gems a few years ago when the housing market was booming and growing double digits every year. I am certainly glad I have under 17 years to pay off a 20 year loan at a fixes 5.45% APR.
There are so many things to think about. Tips? This list could go on a long time brother. Let us know a little more and I am sure we can point in the right direction.
There are so many things to think about. Tips? This list could go on a long time brother. Let us know a little more and I am sure we can point in the right direction.
Yea typically the 40 to 50 year mortgages are out in Cali, and there have actually been a few here recently... Nothing that I would suggest, no way no how...
A 30 or 15 year fixed might be the best way to go right now, with the bubble in a "buyers" market you are better off getting a fixed rate... if you go with a variable rate then in all likelihood they will extend to you good terms now and it will be fixed for a pre-disclosed amount of time and it will then become variable changing as the time goes by.. this is also mentioned in the contract, but they are more likely to give you a good rate now, knowing that the rates will change in their favor and they can make up the money from you in the future...
but as everybody has said, do your research, know your limitations and if you can pay the thing down asap....
A 30 or 15 year fixed might be the best way to go right now, with the bubble in a "buyers" market you are better off getting a fixed rate... if you go with a variable rate then in all likelihood they will extend to you good terms now and it will be fixed for a pre-disclosed amount of time and it will then become variable changing as the time goes by.. this is also mentioned in the contract, but they are more likely to give you a good rate now, knowing that the rates will change in their favor and they can make up the money from you in the future...
but as everybody has said, do your research, know your limitations and if you can pay the thing down asap....
If you can swing it, I highly recommend the 15 year mortgage. As noted above though, many people cannot make the higher payment. There used to be a heuristic that 15 year mortgages were approximately 17% higher in monthly payments. With the current bubble that may not hold true.
I actually have a neg-am loan on my primary residence since home prices are going up at a much higher rate than I'd fall behind on my interest (plus we plan on living here five years or less).
On investment properties, we typically take out interest only or 30-year fixed loans, which allows us to positive cash-flow the houses. Doing this covers our mortgage while the equity continues to go up or the tenat pays down the principal.
On investment properties, we typically take out interest only or 30-year fixed loans, which allows us to positive cash-flow the houses. Doing this covers our mortgage while the equity continues to go up or the tenat pays down the principal.
But if I planned on being in my primary residence for a long period of time, I'd definitely take out a 15-year fixed.
brainvictim
Whats going on over here?
- Joined
- Dec 26, 2005
- Messages
- 282
If you are a first time home buyer, the city or state usually have prgrams for you to take a course, and they will give a certain amount towards your closing costs, home repairs, or some sort of incentive for you taking the course and buying a home. It is usually not much, but still worth checking out to see if you qualify for such programs. Also, if you plan on refinancing make sure you understand the pre payment policy. In massachusetts banks cannot charge a pre payment penalty as off a couple of years ago, so you might want to check that out as well for your area.
All good points. It depends on what you are doing. Home forever 15, 20 or 30 year fixed, what ever you can stand. Investment - max term minimum down and minimum payment. You are riding the wave.
Bingo!!! Screw putting money down at closing on investment properties. We normally work it where we cash out all but 80% of the equity in the property, and that can be a nice chunk of change particularly if you are helping someone out of foreclosure. And with investment properties, it is all about NOT paying a mortgage payment (that is letting the tenant pay it), and possibly even postitive cash flowing it meanwhile the equity goes up and up.
