|
Can I ask one last mortgage question?
| Posted By |
Message |
Suzanne
May the Force Be With You!
Member since 5/05 2083 total posts
Name:
Suzanne
|
Can I ask one last mortgage question?
I am sorry I am so full of questions but you guys are really a great source of information.
We are doing an 80/10/10 (10% down). For the second loan (10%), which is better:
1. Fixed Mortgage at 7.4% with a balloon payment after 10 years
or
2. Interest only HELOC at prime plus .75% for 15 years
I am not sure which way I should go. Locking in a rate on the second mortgage sounds smart to me but others say it is better to have a line of credit to work with on this loan.
Message edited 4/27/2006 3:53:21 PM.
|
Posted 4/27/06 3:53 PM  |
| |
|
Prudential Douglas Elliman Real Estate
Long Island's Largest Bridal Resource | Long Island Weddings |
DjPiLL
Member since 5/05 3664 total posts
Name:
Richard
|
Re: Can I ask one last mortgage question?
I would go with the fixed 7.4% for 10 years, but pay more every month to avoid the balloon payment.
The prime rate right now is 7.75%. Which means your first interest rate is 8.5%. The Fed hasn't hinted they plan on lowering the prime rate anytime soon. It would take them four quarter point drops to put the prime rate low enough where you break even with this deal.
I dunno... just my opinion.
|
| Posted 4/27/06 3:58 PM |
| |
|
DjPiLL
Member since 5/05 3664 total posts
Name:
Richard
|
Re: Can I ask one last mortgage question?
Posted by Suzanne
Locking in a rate on the second mortgage sounds smart to me but others say it is better to have a line of credit to work with on this loan.
The second mortgage may still be considered a line of credit even if you take the fixed interest rate.
If the 7.4% fixed is a line of credit... and you can eventually draw on it once its paid off... then thats good.
But if its just another loan... then maybe you are right... the line of credit would be better.
|
| Posted 4/27/06 4:00 PM |
| |
|
Suzanne
May the Force Be With You!
Member since 5/05 2083 total posts
Name:
Suzanne
|
Re: Can I ask one last mortgage question?
Posted by DjPiLL
Posted by Suzanne
Locking in a rate on the second mortgage sounds smart to me but others say it is better to have a line of credit to work with on this loan.
The second mortgage may still be considered a line of credit even if you take the fixed interest rate.
If the 7.4% fixed is a line of credit... and you can eventually draw on it once its paid off... then thats good.
But if its just another loan... then maybe you are right... the line of credit would be better.
It is a fixed rate mortgage loan, not a line of credit.
Message edited 4/27/2006 5:17:26 PM.
|
| Posted 4/27/06 4:36 PM |
| |
|
patti08
Happy
Member since 5/05 3893 total posts
Name:
Patti
|
Re: Can I ask one last mortgage question?
I'd go for a fixed rate, we are facing hyper-inflation in our near future.
|
| Posted 4/27/06 5:27 PM |
| |
|
Potentially Related Topics:
Currently 638786 users on the LIFamilies.com Chat
|
