| Posted By |
Message |
andreat
LIF Infant
Member since 10/06 155 total posts
Name:
|
Mortgage question .. crunching numbers
Hypothethically speaking... imagine this scenario.
$500,000 Home Price
$15,000 closing costs
------------------------------
$515,000 Total
$40,000 Cash on Hand
So $475,000 Needed
Non-Jumbo Loan can be a max of $417,000
Difference of $58,000
The non-jumbo loan would be at 6.5% interest plus or minus.
The $58k would be at what interest rate?
I can take that amount (58k) from my 401k for a 10 year loan. Is this a bad idea? This would also mean that I wouldn't have PMI.
Anybody have any thoughts?
|
Posted 9/11/07 1:52 PM  |
| |
|
Long Island Weddings
Long Island's Largest Bridal Resource | Prudential Douglas Elliman Real Estate |
Mrs-D-Girl
Love my fur baby
Member since 8/07 5183 total posts
Name:
|
Re: Mortgage question .. crunching numbers
I would say you are looking at 8.0%-8.5% on the $58K
I have done the crunching # backwards and forward, it works out in the end to do the "piggyback" loan and not pay the PMI.
IMO I would not take from your 401K, I am sure the return on that money is a lot higher
Also want to add, you don't pay closing costs on the piggback loan, so you are also saving there.
Good luck 
Message edited 9/11/2007 2:11:10 PM.
|
| Posted 9/11/07 1:59 PM |
| |
|
Blu-ize
Plan B is Now Plan A
Member since 7/05 32475 total posts
Name:
Susan
|
Re: Mortgage question .. crunching numbers
Posted by Mrs-D-Girl
I would say you are looking at 8.0%-8.5% on the $58K
I have done the crunching # backwards and forward, it works out in the end to do the "piggyback" loan and not pay the PMI.
IMO I would not take from your 401K, I am sure the return on that money is a lot higher
I agree with this. We did it with a 80/10/10 loan. No PMI and the rate on the first mortgage was 6% and the rate on the second loan was around 7.75%. Now the rates are a bit different but these numbers made more sense than taking the money from a retirement account. And the entire second loan is tax deductible since it will be interest only.
Message edited 9/11/2007 2:03:13 PM.
|
| Posted 9/11/07 2:02 PM |
| |
|
MrsFlatbread
Skinny jeans are in my future
Member since 6/06 10258 total posts
Name:
Baby Momma
|
Re: Mortgage question .. crunching numbers
Better to get the second mortgage
|
| Posted 9/11/07 2:58 PM |
| |
|
MegZee
My bunny
Member since 5/06 8777 total posts
Name:
Meaghan
|
Re: Mortgage question .. crunching numbers
what would your rate be borrowing from your 401k?
Also, can you find a program where you borrower over 80% and dont have to pay PMI? Might not be able to with a jumbo, but its an idea.
I think your rate would be about 8% if you did the second mortgage.
|
| Posted 9/11/07 3:13 PM |
| |
|
leese
Sarge!
Member since 5/05 1965 total posts
Name:
Leese
|
Re: Mortgage question .. crunching numbers
Better to get the second mortgage for that remaining loan - as long as the interest rate isn't that high. Depending on the time of year, credit scores and other issues it could be anywhere from 8 up to 10%. Gotta shop around and find the best deal!
|
| Posted 9/11/07 3:14 PM |
| |
|
angnick
Life is So Wonderful!
Member since 8/06 6663 total posts
Name:
Angela
|
Re: Mortgage question .. crunching numbers
can you put down a bit more to get yourself in the under a jumbo rate?
|
| Posted 9/11/07 3:53 PM |
| |
|
lakrav
LIF Infant
Member since 8/07 89 total posts
Name:
|
Re: Mortgage question .. crunching numbers
OK...I am a bank manager so here goes...
If the home price is 500,000 you need to put 5% down minimum. So $25000 down and you should be pretty much OK with the 40K cash you have give or take. You can do an 80/15/5 where you take 80% as a fixed mtg and the other 15 as a home equity. Then you also don't have to pay PMI.
If you want more info or you want me to give you someone to call let me know and FM me!
|
| Posted 9/11/07 8:50 PM |
| |
|
andreat
LIF Infant
Member since 10/06 155 total posts
Name:
|
Re: Mortgage question .. crunching numbers
Thanks for the input, all.
|
| Posted 9/12/07 8:13 AM |
| |
|
