Which Loan? - Posted by Mr. Summers - PA

Posted by michaela-CA on June 04, 2007 at 11:57:39:

Payments are pretty much the same. You need to consider whether htose interest rates are firm or fluctuating. Each one the same time length? Do you have the funds for closing cost? How long do you think you’re going to stay in this home (1st time homebuyers always think they’ll stay in it for the rest of their lives, butafter a year or 2 of owning they will usually be open to something bigger or dfferent). Those 100% or n80/20% loans are usually only firm for 3 years or so. So that can be the big difference.


Which Loan? - Posted by Mr. Summers - PA

Posted by Mr. Summers - PA on June 04, 2007 at 10:27:06:

Someone please help me. This is my first home and I have 2 mortgage options.

100% loan
1068.77 monthly payment
2883.40 estimated closing costs

80-20 loan
6.625% & 8.25%
1060.78 monthly payment
3625.86 estimated closing cost

I would like to thank any responses in advance.

Re: Which Loan? - Posted by Wayne

Posted by Wayne on June 04, 2007 at 12:44:54:

Well, assuming that everything is fixed, including the HELOC on the second plan (which it’s probably not), you’re paying an extra $740 to save $8/month. At this rate (not factoring in diminishing returns), you’d have to have the second plan for 7 years and 9 months to break even.

I’d take the first.