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| | Author | Messages | |
LeonPotter
Posts:451
 | | 08/24/2007 12:05 PM |
 Alert | It's been a year since I signed on to a 20year ARM(refi).
I reported in another thread that my interest rate went down( ever so slightly) after one year.I confirmed today my minimum payment also went down $226.Currently the rate is 6.125%.
The lower payment is a combination of lower rate AND lower scheduled balance with 19 years until maturity. | |
You may remember this from the original 85239:
Proverbs 22:7
The rich ruleth over the poor and the borrower is servant to the lender. | |
| | ggalvan
Posts:46
| | 08/24/2007 1:09 PM |
Alert | | Last year you could have beat that rate on a fixed rate. Why would you risk the rate going up on ARM? | | | |
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| | LeonPotter
Posts:451
| | 08/24/2007 1:30 PM |
Alert |
Reply,
Last year I couldn't beat with a fixed rate. The going fixed rates (APR)were up to a percentage higher including total costs.At best the APR were slightly higher.
This one I got with closing costs ($228)waived if I hold the loan for min. of 2 years.
I don't mind assuming the risk if it cost less to do so. Also, I get the benefit of rates falling without having to pay to refinance.
Another thing, I knew the overall payment has a chance to reduce(giving me more options).With a fixed, that isn't realized until the loan is paid off. I wanted the options open to me for the duration.
My goal is to pay off sooner than later. | |
You may remember this from the original 85239:
Proverbs 22:7
The rich ruleth over the poor and the borrower is servant to the lender. | |
|
| | kjgreifer
Posts:0
| | 08/26/2007 7:55 AM |
Alert | Unless you put good $$ down when you purchased you most likely would not be able to refinance to a conventional because the appraised value is probably less than the amount you owe on the loan.
How often does your loan reset and what is the rate tied to? LIBOR + 2?
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| | LeonPotter
Posts:451
| | 08/27/2007 10:27 AM |
Alert | First off, The original loan was a conventional. I won't do anything else. It was an ARM, too. It was tied to the LIBOR.
The loan I currently have(ARM) resets annually.It is tied to the 10 year treasury. +1 rounding up to nearest 1/8.
Yes, I put a good amount down.
I have another deal in the works and the appraisal came in 35k over the original purchase price. What we owe is just over half of said appraised value.
I don't put too much weight into that anyway. But, in the case of the deal I'm working on, it makes a difference.The fact the minimum required payment went down also helps in terms of the deal I'm looking to make.
| |
You may remember this from the original 85239:
Proverbs 22:7
The rich ruleth over the poor and the borrower is servant to the lender. | |
|
| | kjgreifer
Posts:0
| | 08/27/2007 3:13 PM |
Alert | | You're loan is better than one tied to LIBOR. The credit crunch has lowered the 3 month and 10 year treasury notes but should start rising again the rest of the year. But since your loan only resets anually, you have plenty of time to watch it and decide what is best. | | | |
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|  | LeonPotter
Posts:451
| | 08/27/2007 11:33 PM |
Alert | I don't make it a habit to predict which way rates will go, I only do what improves or best fits my situation. For example, I knew my refi was a better deal than the original loan I had.I was in a position to do it. I got the lowest rate available at the time with no cost, the math was easy.
Now, I'm in position to do another deal. Again, the math is easy. It doesn't matter to me which way rates go. I don't base my decisions on that. I base my decisions on where I am now and where I want to be in the future. I put myself in position to accomplish that. I constantly evaulate my situation looking for ways to improve it. If the opportunity comes along, I do it.
I didn't say this, but I wanted to show that ARMS aren't the dangerous things made out to be. In my view, it doesn't matter how long one plans to live in the house or which way rates will go.Debt is debt and the financial markets don't care when I got it.
Honestly, I cannot predict what I'll be doing or where I'll be next month, let alone x amount of years from now. All that is an exercise in futility to me,As is chasing interest rates and paying for it:refinancing to an ARM because rates dropped,refinanciing to a fix because arm went up, refinancing to an Arm because rates went down, etc.
I just keep it simple. I Get the least expensive loan I could possibly find; a conventional ARM.
In the case of the refi, It happened to be a 20 year note.
| |
You may remember this from the original 85239:
Proverbs 22:7
The rich ruleth over the poor and the borrower is servant to the lender. | |
|
| | LeonPotter
Posts:451
| | 09/11/2007 9:31 AM |
Alert | The rates for the loan type I have are as low as 5.625%.(mine reset to soon). It's with desertschools if any one is in position to do so. The costs are waived if you hold the loan for atleast 2 years. They are minimal anyways(mine were less than $300).
Since the 10 year Treasury has dropped a bit since the rate decrease, it will lower again next month(IF all holds the same). The loan is called the 20 year Master mortage. I have the variable rate one. Lower rate and no origination fees.
They just came out with a new equity loan. It's the based on the 10 year note also so the rate could be as low as 5.625.(it could be .25 lower still with monthly auto payments.) All the fee conditions that apply to the master mortgage apply to this one. This one is called the 15/30 equity optimizer(variable). It's named that because it's a 15 year note, but the payments are amortized over 30 years.
I would only use the equity optimizer if you are on track to payoff within 15 years anyway.
BTW, to get the rates one must have atleast 80% Loan to value and a the minimum credit score of 700 and meet regular underwriting criteria.
At the time I got the Master mortgage the minimum credit score was 660, but this might have changed. | |
You may remember this from the original 85239:
Proverbs 22:7
The rich ruleth over the poor and the borrower is servant to the lender. | |
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