Tilted Forum Project Discussion Community  

Go Back   Tilted Forum Project Discussion Community > The Academy > Tilted Life


 
 
LinkBack Thread Tools
Old 08-09-2004, 05:51 AM   #1 (permalink)
Psychoholic
 
iamtheone's Avatar
 
Location: Ein tov she'ein bo ra!
Mortgage Loans - Adjustable Rates - Anyone have experiences to share?

Hey folks, I have always been the 30yr fixed kinda guy and have recently started thinking about adj rate mortgages to save a couple bucks on the month while the wife is off work with the twins..... Any thoughts? Horror stories? etc, etc?


Thanks!
__________________
Music is holy, art is sacred, and creativity is power...

Think for Yourself Question Authority
iamtheone is offline  
Old 08-09-2004, 07:16 AM   #2 (permalink)
Upright
 
Location: St. Louis, MO
As long as your balance is over $80,000 I would say a fixed rate is the wrong thing to have. The main reason a mortgage broker would advise a fixed rate is because they can get paid more off of them. I know this because I am one.
tingly is offline  
Old 08-09-2004, 07:31 AM   #3 (permalink)
Non-Rookie
 
NoSoup's Avatar
 
Location: Green Bay, WI
Hmm... I would have to disagree with you here tingly

I would say that it is entirely dependant on your situation.

How much longer are you planning on living in your home? Are you expecting a substantial increase in income? If so, when?

Also, how tight are you on monthly payments right now - worse case scenario, would you be able to afford an increase in payments and still keep your standard of living the same?

After these questions, I should be able to suggest something for ya
__________________
I have an aura of reliability and good judgement.

Just in case you were wondering...
NoSoup is offline  
Old 08-09-2004, 07:52 AM   #4 (permalink)
Junkie
 
Location: NJ
I recently refinanced and went from a 30 yr fixed to an ARM with a ten year lock in. I'm locked at the low ARM rate for the next ten years (it was a full percentage point below the fixed rate at the time). It seemed to fit my situation as I think over the next ten years we will see interest rates rival current levels again and should I wish I can refinance again and get a fixed rate. But I'm not too sure if I'll even be in this house that long.

The difference between the ARM and fixed rate is going to the principal.
__________________
Strive to be more curious than ignorant.
onetime2 is offline  
Old 08-09-2004, 08:40 AM   #5 (permalink)
Psychoholic
 
iamtheone's Avatar
 
Location: Ein tov she'ein bo ra!
well, as I mentioned above, I recently had twins and the wife is only working part time and the cost of day care for two girls is taking a nice bite out of our income. I thought about selling our home but could not even come close to what we have now. The balance of the loan is roughly 180k, the house would apraise for right around 300k. We have a 5.78% fixed rate for 30yrs now, basically I am looking for something to buy some time until we can get rid of some things..... What is the difference between those 3/1, 5/1 and 7/1 ARM and Jumbos. There are also interest only loans as well.
__________________
Music is holy, art is sacred, and creativity is power...

Think for Yourself Question Authority
iamtheone is offline  
Old 08-09-2004, 10:21 AM   #6 (permalink)
Non-Rookie
 
NoSoup's Avatar
 
Location: Green Bay, WI
Quote:
Originally posted by iamtheone
well, as I mentioned above, I recently had twins and the wife is only working part time and the cost of day care for two girls is taking a nice bite out of our income. I thought about selling our home but could not even come close to what we have now. The balance of the loan is roughly 180k, the house would apraise for right around 300k. We have a 5.78% fixed rate for 30yrs now, basically I am looking for something to buy some time until we can get rid of some things..... What is the difference between those 3/1, 5/1 and 7/1 ARM and Jumbos. There are also interest only loans as well.
Well, that is an excellent 30 year fixed rate, I'd leave it alone if I were in your shoes.

Basically, the difference in the ARMS is the first number represents how many years the loan is fixed for, the second is how often it can change. For instance, the 3/1 ARM means that the rate is locked for 3 years and can change every year thereafter. The lower the "locked in" period, the lower the interest rate.

Jumbo loans are called "Jumbo" because they exceed a certain state instituted amount. Here in Wisconsin, I believe that amount is 387,000 - but it varies from state to state.

You mentioned "getting rid of some things" - did you by chance mean to pay off some other debts? If that is indeed what you are thinking about doing, you may want to consider a second mortgage. That way, you'll still have your rate on the first, but consolidating with a second will often times lower your payments substantially, in addition, the interest is generally tax deductible.

If you have any more questions, just ask
__________________
I have an aura of reliability and good judgement.

Just in case you were wondering...
NoSoup is offline  
Old 08-09-2004, 08:34 PM   #7 (permalink)
Insane
 
To ARM or not to ARM.. that is the question.. lol.

The question is answered by what you need out of your mortgage.. it sounds as if you need a break from your payments..

An ARM could certainly accomplish this for ya... you could pay as little as 1.95% for the next 5yrs if ya like... there is a possiblility that by doing this you could owe a bit more on your mortgage than you do now.. but.. again.. what is it you need.. people pay ungodly interest rates on credit cards all the time.. is it wise.. hell no.. but that person wants something.. or needs something... .. so there is that answer.. make the mortgage work for you needs.

;]
90degree is offline  
Old 08-10-2004, 03:21 AM   #8 (permalink)
Psychoholic
 
iamtheone's Avatar
 
Location: Ein tov she'ein bo ra!
Thanks for all the information guys! Much appericated! I guess it is time to rate shop..
__________________
Music is holy, art is sacred, and creativity is power...

Think for Yourself Question Authority
iamtheone is offline  
Old 08-11-2004, 02:35 AM   #9 (permalink)
Insane
 
TheKak's Avatar
 
Location: Virginia
There can be penalties for selling if you are using an ARM and sell before the fixed date ends. The way it looks to me, is you use an ARM to save you some money, and then refinance when your fixed period is up.

When I was buying a house, the plan I was going for was 80/20 on a 3/1 ARM, saving almost $5,000 from a fixed 30yr loan in the 3 year period, since it was a 100% loan I didn't have to make a downpayment, but I still didn't have to pay mortgage insurance.

Just depends on your situation!
__________________
Roses are red, violets are blue, I'm a schizophrenic and so am I.
TheKak is offline  
Old 08-11-2004, 06:29 AM   #10 (permalink)
Banned from being Banned
 
Location: Donkey
I have a 3/1 ARM.

My interest is only at 4.25 right now.

People say, "It depends on how long you'll live there" or "Depends on your situation", but interest is interest. Even if you had a 5.3% on a 30 year loan, you're still paying $150 more than I am a month. Personally, I'd much rather pay 4.25% than whatever the going rate is at now

Besides, with the extra $$ you save in interest, you can just dump it right back towards the principal

It's the way to go, IMO, but don't take my word for it, I'm by no means a real estate expert.

Mine caps at 6.25, I believe, if it were to ever go that high (not likely anytime soon).
__________________
I love lamp.

Last edited by Stompy; 08-11-2004 at 06:32 AM..
Stompy is offline  
Old 08-11-2004, 12:08 PM   #11 (permalink)
Insane
 
hey stompy.. whomever told you your loan caps at 6.25 was lying to you... I would be willing to bet any amount on it.
90degree is offline  
Old 08-12-2004, 08:02 AM   #12 (permalink)
Upright
 
Location: St. Louis, MO
it more likely caps 6.25% above your initial rate.
tingly is offline  
Old 08-12-2004, 11:31 AM   #13 (permalink)
Psycho
 
Location: Broken Arrow, OK
there is acompany called world mortgage that can start you out with 1.95 % in a differed interest program, it basically works as a 5 year arm, starting out at 1.95 and working up 7.5% of your payment every year (1000.00 year one, 1075.00 the next year and so on untill you catch up to the interest rate which is tied to prime. ) The good thing about this is that you are already in good shape in terms of equity, and since you set it up with bi-weekly payments you are not going to go"upside down" that much. Its a good program that I had signed a couple of people on, its worth a look. It would help you out cause your payments are very small comparied to a 30, which by the way you do have a good 30 year rate, but the question that makes pr breaks whether you do anything is how long you plan on staying in your house.
__________________
It's hard to remember we're alive for the first time
It's hard to remember we're alive for the last time
It's hard to remember to live before you die
It's hard to remember that our lives are such a short time
It's hard to remember when it takes such a long time


Last edited by phyzix525; 08-12-2004 at 11:33 AM..
phyzix525 is offline  
Old 08-12-2004, 11:53 AM   #14 (permalink)
Psychoholic
 
iamtheone's Avatar
 
Location: Ein tov she'ein bo ra!
Well, I went with a pay option 1 year ARM. You have an initial min payment based apon a 1.25% rate that does not change for the year, you have a interest only payment that can fluctuate depending on what LIBOR does. They put their 2% ontop of the LIBROR rate. There is also a 30 yr "fixed" rate that can be paid as well. SO, I don't it was too bad of a deal. Closing cost were low, (below 1k), there is no pen for early termination of the loan. So, with this loan, I could do the min payment (you will get hit with neg amorization) or the interest only payment or the 30 yr payment.
__________________
Music is holy, art is sacred, and creativity is power...

Think for Yourself Question Authority
iamtheone is offline  
 

Tags
adjustable, experiences, loans, mortgage, rates, share

Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On



All times are GMT -8. The time now is 09:33 AM.

Tilted Forum Project

Powered by vBulletin® Version 3.8.7
Copyright ©2000 - 2024, vBulletin Solutions, Inc.
Search Engine Optimization by vBSEO 3.6.0 PL2
© 2002-2012 Tilted Forum Project

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 193 194 195 196 197 198 199 200 201 202 203 204 205 206 207 208 209 210 211 212 213 214 215 216 217 218 219 220 221 222 223 224 225 226 227 228 229 230 231 232 233 234 235 236 237 238 239 240 241 242 243 244 245 246 247 248 249 250 251 252 253 254 255 256 257 258 259 260 261 262 263 264 265 266 267 268 269 270 271 272 273 274 275 276 277 278 279 280 281 282 283 284 285 286 287 288 289 290 291 292 293 294 295 296 297 298 299 300 301 302 303 304 305 306 307 308 309 310 311 312 313 314 315 316 317 318 319 320 321 322 323 324 325 326 327 328 329 330 331 332 333 334 335 336 337 338 339 340 341 342 343 344 345 346 347 348 349 350 351 352 353 354 355 356 357 358 359 360