Do you think one of them is using gear pt. 2

CptFKNplanet said:
I'd only recommend doing an ARM (adjustable rate mortgage) if, like you said, you aren't gonna live there longer than the life of the loan. It will definitely cost you more in interest no matter how you look at it. After 5 years, you'll be at almost 13% APR... and trust me, a "max" of 2% means it's gonna hit that every year unless it goes over the "ceiling" on your rate. My guess, is the ceiling is 12.99% which is why they said it can go up 2% every year. Definitely ask your loan officer what the max rate it can adjust to is. ARMs are tricky, kinda like balloon mortgages. I'd advise staying away from ARMs. We don't do those here, ever. As for PMI, you can either do what you said or opt to pay it all upfront in your closing costs. It sounds like you're looking at a Conventional loan, have you looked into FHA? No PMI on FHA, 10% down... rate may be a little higher though, and there is MI (mortgage insurance not through a private company) through the life of the loan but it's a lot cheaper. Just make sure you talk everything through with your loan officer. Did you go to a bank (Wells, BofA, etc), or a private lender?
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We just looked at some of the FHA style loans, at the moment they're a full half a percent over a standard 30 year.
They also slow the process down in s huge way since they need to inspect everything with a fine tooth comb.

I'll have to ask about the rate cap on the ARM loan.

My strategy at the moment is this:
5/1 ARM for the first 5 years.
Put the difference on the principal amount
After 5 years my principal will be significantly less.
Refinance with a 30 year fixed.

I'll eat some refinancing costs but they're half of what I've already saved.


I went to a bank on this one, they're smallish and well known for their good rates.
 
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71Avido said:
We just looked at some of the FHA style loans, at the moment they're a full half a percent over a standard 30 year.
They also slow the process down in s huge way since they need to inspect everything with a fine tooth comb.

I'll have to ask about the rate cap on the ARM loan.

My strategy at the moment is this:
5/1 ARM for the first 5 years.
Put the difference on the principal amount
After 5 years my principal will be significantly less.
Refinance with a 30 year fixed.

I'll eat some refinancing costs but they're half of what I've already saved.


I went to a bank on this one, they're smallish and well known for their good rates.
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True. It all comes down to what fits your needs obviously. Sounds like you've got it pretty well handled. Just make sure when they call you and say "we need you to source these deposits on your bank statements"... DO IT. Don't question it lol. Be a good borrower and things will go much more smoothly.
 
i just got the loan for my parents modified a few months ago.. we were paying an arm and a leg
 
AUGH, the gamble really is where interest rates will be in 5 years...
Looks like I'm losing sleep tonight :/
 
CptFKNplanet said:
They better not be no damn 12% or I'm out of a job hahaha
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You and me both brother.
The difference those couple percentage points make is incredible.

I'm just looking at the historical charts for mortgage rates in the US.
Currently, on a chart going back to 1962, 2013 doesn't even register it's that low...
It's hard to believe they were up around 18% at one point... Yowza.
Going from 4.75% to 9% takes my payment from $585 -> $901!

I need to come up with a strategy by tomorrow.
 
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