2006-09-17 15:00:27 · 5 answers · asked by Nightflyer 5 in Business & Finance ➔ Renting & Real Estate
The best deal you will get today is the 30 year fixed. Arms are a little cheaper right now, but not enough to take them over the 30 year fixed.
I just check rates this morning for this question and the best you could get on a 30 year is 5.8% with discount points or 6% with no discount points. The discount would cost $300.00 on a $200,000 loan and would be well worth the long term savings.
The1%, 2%, and 3% payment loans (option arm) are all arms with no fixed period. The 1%, 2%, or 3% is not the rate on you money, that is a variable rate in the 7% range. The I have one of these on my investment properties and they are good loans if used correctly. I would not recommend them for 99.9% of the american population.
Matt
http://www.diversifiedlender.com/
2006-09-18 01:16:14 · answer #1 · answered by Matt J 3 · 0⤊ 0⤋
30 year fix rate is less than 6.75% now. It is close to all time low. Try to get it now.
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As housing market continues to slump, if you don't plan to delay your plan, please interview several and pick a good realtor or agent.
Bad ones will talk you into buying the largest property at your credit limit. Good ones will find you a good deal (Sellers are offering discount and incentives now).
Try to stay away from Adjustable Mortgage, because 30 year fix mortgage rate is very low right now. There is no reason to use Adjustable loans except fatter commission for loan agents.
Interests only loans are not good iether. Mortgage payment consists of two parts: interests and principal. Interests are like rent, which doesn't add to the equity to your house. It simply disappear as your pay it. If you want to use interests only loans, might as well rent, especially during market downturn, because housing price won't appreciate.
Finally, for tax benefits, talk to your CPA or tax accountant. Do not consult finance with realtors or agents. They get commissions when you sign the check!
Good luck!
http://biz.yahoo.com/brn/060909/19463.html
http://money.cnn.com/2006/09/08/real_estate/caught_in_the_bubble/index.htm?postversion=2006090814
http://money.cnn.com/2006/09/05/real_estate/Ofheo_home_prices/index.htm?postversion=2006090514
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Options ARMs are ideal for rich people who has enough money to pay off the loan anytime, but wants to use the introductory low interests rate to delaying paying off the property.
While the loan is delayed to be paid off, he or she can use that money to invest else where.
Options ARMs, for less wealthy people, are double edged swords. If things continue to be fine, then everyone happy. If housing market continues to slump, then those home owners will face larger debt with no equity and lower housing price. The worst combination of all.
People have this misconception that paying off mortgage bills are adding equities to houses. However, mortgage payment consists of two parts: interests and principal. Interests are like rent, which doesn't add to the equity to your house. It simply disappear as your pay it.
Most people who apply for Option ARMs are those who can't afford paying the principal. So, they can only pay the interests, which is like paying rent. The worst part is, .... the amount is usually larger than rent.
For example, let's buy a $500,000 condo with 0% down and apply interests only loan (just like renting a place). Mortgage payment would be $3250/month. It is a bad buy, because you can enjoy same property for $2000/month.
Please note that I assume the tax benefits from home cancel out fees from home association and property tax. For more accurate calculation, consult with your CPA or accountant. But NOT your realtor, whom will say anything to get the deal to go through.
2006-09-18 06:24:41 · answer #2 · answered by Price is what you pay for value. 3 · 0⤊ 1⤋
Read some mortgage tips and more on this site to help you with it
2006-09-17 22:03:04 · answer #3 · answered by Anonymous · 0⤊ 0⤋
I saw a special deal on TV last night for 3% fixed if you buy from a particular development
2006-09-17 23:35:27 · answer #4 · answered by Anonymous · 0⤊ 0⤋
There are more options than I have lines to type.
I'm a nationwide mortgage broker and would be happy to assist you with your questions.
Please contact me: Steve@SLarson.com www.SLarson.com/contact
2006-09-18 03:13:09 · answer #5 · answered by Anonymous · 0⤊ 0⤋