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I'm looking for the lowest initial monthly payment, which would obviously be loan 3, and then if I wanted to (and the rates were decent), I could always refinance within those first 10 years to a traditional 30-year mortgage.
But it is hard to pass up on that 5.25% locked in, even if it is with PMI.
I'm looking for the lowest initial monthly payment, which would obviously be loan 3, and then if I wanted to (and the rates were decent), I could always refinance within those first 10 years to a traditional 30-year mortgage.
But it is hard to pass up on that 5.25% locked in, even if it is with PMI.
If you're going to stay in the house for a long time, then I say pick option 1. You can always get rid of the PMI once you hit 20%. It's a crapshoot if and when you have to refinance, so I say go for a good thing.
Getting rid of PMI is not going to be the same as it used to be.
If the economy doesn't pick up then you'll be paying a lot longer than normal.
Quote:
Originally Posted by Moonlady
If you're going to stay in the house for a long time, then I say pick option 1. You can always get rid of the PMI once you hit 20%. It's a crapshoot if and when you have to refinance, so I say go for a good thing.
You can play with the numbers to figure out the turn point for the no PMI {Is it also no fee} loan. When I did it would be 5-6 years at a 0.5% differential.
If you are talking re-fi I would be scared of future inflation - look at mortgage rates for the last 40 years - that is about how far back you have to go to beat 5.25.
I'm looking for the lowest initial monthly payment, which would obviously be loan 3, and then if I wanted to (and the rates were decent), I could always refinance within those first 10 years to a traditional 30-year mortgage.
But it is hard to pass up on that 5.25% locked in, even if it is with PMI.
Thoughts?
You need to buy a less expensive house and save some of that money.
You need to buy a less expensive house and save some of that money.
20yrsinBranson
Thanks Branson, but that really wasn't the question. We can afford the home, I'm just looking for some advice on what seems like a better loan in the long run.
We did a 10/1 IO ( at the time it was the LOWEST of % offerred to us) and used the money we saved to fix the place up decorate and put new floors in the entire house. We make an extra payment when we can and if there is anything left over from our tax refund we dump it into the mortgage. Between putting 20% down, the upgrades and extra payments we have almost 100K in equity in just 4 years, even with the declining market. If interest rates go above what we are paying now I will be in a good position to refi easily.
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