| Nephythys |
03-26-2007 09:46 AM |
This is a message I got-
Quote:
Between this and the thread you started, you were given some good info on interest only mortgages and some not so good. It's true that if you're paying interest only then you're not paying down the principal, but it doesn't mean you aren't building equity. In other words if your mortgage principal stays the same but your home is going up in value, then you're still gaining equity
As far as your other question, here's a general rule of thumb: If the amount the loan will save you over the course of two (2) years does not equal or exceed the cost of the loan, then it's not worth it. For instance, you state that you're gonna save $156/mo. $156 times 24 months equals $3,744. Now, take the closing costs of the loan you want to obtain (you can get fairly accurate figures off your Good Faith Estimate the lender should provide for you) and add to that the 6 month pre-payment penality. Now you tell me, is it equal to or less than $3,744? If it's more, it's probably not a good deal.
Also, the 6.875%first and 11% second sound high to me. Right now 30 yr fixed are in the 6.0 % to 6.25% range and a second should be in the 8% to 9% range, but I'm not looking at your credit so I don't have all the details I really need.
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I am going to put this off till next year. The $156 makes little to no difference right now. I would be spending MORE to save almost nothing.
So thanks again- |
