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02-05-2007, 03:14 PM | #1 |
No Longer a Member Join Date: Apr 2005 Location: Arizona
Posts: 1,424
| Anyone know about Mortgages?? How bad is it really to get a mortgage only loan?? Is it possible to go upside down on the loan? Is it a good move to do that so that I can afford a home? I'm working with Country Wide to get a loan on a new home.. yes im a first time buyer.. so im super excited Can anyone give any "bewars" or "cautions".. Or any "good job!" or "way to go" All those help |
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02-05-2007, 03:21 PM | #2 |
No Longer A Member Join Date: Aug 2005 Location: NEW YORK
Posts: 16,218
| Good luck with you loan and your new home. My son works for Country Wide in New York. It's an exciting time for you and hope everything works out. Carol & Buddy |
02-05-2007, 03:26 PM | #3 |
No Longer a Member Join Date: Apr 2005 Location: Arizona
Posts: 1,424
| Thanks!! I want to give the kids a place they can call home too Right now, it looks like we are going to be in a cardboard box |
02-05-2007, 06:42 PM | #4 |
No Longer a Member Join Date: Apr 2005 Location: Arizona
Posts: 1,424
| bump Anyone?? |
02-05-2007, 07:16 PM | #5 |
No Longer a Member Join Date: Jul 2005 Location: California
Posts: 5,368
| A mortgage only loan? Is that where you only pay on the interest? |
02-05-2007, 07:28 PM | #6 |
No Longer a Member Join Date: Apr 2005 Location: Arizona
Posts: 1,424
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02-05-2007, 07:38 PM | #7 |
Donating YT 1000 Club Member Join Date: Jul 2005 Location: Chicago Suburbs
Posts: 3,306
| You mean an interest only loan. I'd say it's bad if it's 100%. If you put a decent down payment down then you won't be upside down right away. You never know what the market will do. We are in phase 2 of our neighborhood. The exact same townhomes are built across the street, but were sold for $30k-$50k less than ours less than 5 years ago. Now they are all about the same price - and all of their houses have gone up $30-$50k and ours have maybe gone up $5k. Maybe. In nearly 3 years. And the houses that are on the market are not selling. Who would have known that? The people across the street hit a jackpot while people over here are probably upside down on their houses. The market just completely stalled out. Also, if your house doesn't appreciate much and you go to sell it - you won't have enough for realtor's fees, closing fees, etc. A good compromise would be to take out an 80% interest only or a 40 year mortgage. Then put something down (even 5%) and take out 15 year 2nd mortgage. Pay THAT down, send extra, whatever you can do until you have 80% equity in your house. That's a much better safety net than being upside down! I totally understand trying to do whatever you can to buy a house! They say you should only spend 25% of your income on the mortgage - but ours is higher than that even owning one of the less expensive houses in the area. There isn't much to choose from on the low end here - everyone is building $500,000 houses...
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02-05-2007, 07:50 PM | #8 |
I love TBCG! Donating Member Join Date: Feb 2006 Location: MD
Posts: 7,227
| I am a Home Mortgage Consultant for Wells Fargo I am going to give you advice as a homeowner and mortgage consultant. In all honestly 100% financing interest only is not terrible. 1.) It gets you into the house 2.) It gives an affordable monthly payment and it's not a loan that you have to stay in forever. Just make sure even with the interest only you can afford the payment. Sometimes people get the interest only or 40 year loan and they still can't afford it. Also, check into the 40 year mortgage it's another good option where the loan is amortized over 40 years and your payment is lower. I would talk to your loan officer about all your options and make sure you feel informed. Remember down the road you can refinance and get into a more comfortable loan program. I am here to help so PM me or email at mo939rg@aol.com. Good luck
__________________ Morgan Mommy toGeorgie boy & Isaiah RIP sweet Coco 10/12/99-8/1/12 Read About Georgie's Experience with Atlantoaxial Instability (AAI) Here! |
02-05-2007, 07:54 PM | #9 |
No Longer a Member Join Date: Apr 2005 Location: Arizona
Posts: 1,424
| ok, so its an 80, 20 interest only loan. I'm spending about 35% of my income on it. The thing is that... it's less than $100 difference from renting then it is from owning.. thats why im looking into owning. I have to pay around low to mid 700 in rent... and with the mortgage, i'd be paying low 800. I just dont want to get in over my head. |
02-05-2007, 08:00 PM | #10 |
Donating YT 1000 Club Member Join Date: Jul 2005 Location: Chicago Suburbs
Posts: 3,306
| Yeah we thought that too. Our mortgage was only like $100 more... but our taxes are $4600/yr. Escrowed=$380 a month. Also, we stretched a LOT of get this house so it took us 2 years just to buy a couch. We are still paying off debt and still have no furniture in our bedroom. I would only consider it if you've paid off all other debt, drive cheap cars, don't go out to eat, etc. Also, buy the least expensive house you can. Lenders will sometimes offer you more than you can really afford. They know you will pay the mortgage before you pay your other bills!
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02-05-2007, 09:00 PM | #11 |
Yorkie Yakker Join Date: Sep 2006 Location: california
Posts: 41
| interest only loan I manage an escrow company in california and I see interest only loans all of the time, in fact I have one on my house and wouldn't go any other way. It keeps the payments low and you can always put extra (like another hundred a month) if you have it, towards the principal whenever you want. Even if you have a prepayment penalty, which most interest only loans have,most prepays let you still pay down the principal every month if you want, as long as the total prepaid amount doesn't exceed 20% of the outstanding principal a year (which most fully amortized loans don't even do!). Just be sure to read the prepay clause and make sure you understand it. Good luck and go for it!
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02-06-2007, 03:52 AM | #12 |
YT 500 Club Member Join Date: Jun 2006 Location: Bacliff, TX
Posts: 947
| Mentioned in previous post - don't forget taxes and insurance. Depending on the area you're in, that could raise your payment considerably. Keep in mind too, that when you own, all repairs are on you. If something does happen, you will have a deductible with your insurance. Owning a home is great, but there are lots of things to consider. Best of luck in making your decision. |
02-06-2007, 04:54 AM | #13 | |
Donating YT 1000 Club Member Join Date: Jul 2005 Location: Chicago Suburbs
Posts: 3,306
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02-06-2007, 06:15 AM | #14 | |
No Longer a Member Join Date: Jul 2005 Location: California
Posts: 5,368
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02-06-2007, 07:41 AM | #15 |
Donating Senior Yorkie Talker Join Date: Jan 2007 Location: South Dakota
Posts: 340
| From buying our first home and from my previous job as a collector for a mortgage company, I can tell you a couple things. As a general rule, your house payment shouldn't be more than 25% of your take-home pay. Do whatever you can to get a 15 year mortgage, if possible. It sounds like that might not be an option in your case. It wasn't an option for me and hubby either when we went to get our first loan 3 years ago because he was self-employed and they wouldn't use his income to qualify. We ended up getting a balloon payment mortgage in order to get into the home on my income only, which we have to refinance in the next few months to a regular mortgage. We are going to do everything possible to get a 15 year mortgage this time. Here are a few stats you might find interesting about a 30 year mortgage vs. 15 year mortgage....If you borrow $110,000 for your home, your monthly payment at 7% interest is $732 on a 30 year loan. On a 15 year loan, your monthly payment goes up only $256, so $988 per month. When you look at interest, you pay almost $86,000 more in interest on the 30 year loan. So if you can scrape by an extra $250 per month for your payment, you'll save $86,000 in interest. I've never considered a 40 year loan...yikes. One other thing I have to say (from experience at my previous job), NEVER, EVER put much money into (and by no means finance) a mobile home. Please tell me this is a stick-built home you're trying to buy. Even the newest mobile homes will depreciate just like cars, no matter what you do to make them seem like a regular home (permanent foundation, basement, etc). In a few years you will owe several times what the house is worth. And definitely check the housing market in your area. Where we built, land and houses are going up in value like crazy, so I'm glad hubby and I scraped by and built this house when we did. Even though we are looking to refinance shortly, our land and house has gone up significantly in value over the last 3 years. You'll have to check different areas where you live. We live outside the city, in an area where land prices are getting ridiculous. I'm 27 and hubby is 29, which makes us the youngest people in our area (most are retired), but we shopped carefully to find land we could afford in an area where the value consistently goes up. I hope that helps a little, and good luck! Buying a home is exciting! |
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