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mortgage question

Discussion in 'Anything goes' started by WildBillyCrazyCat, Jun 23, 2006.

  1. Thanks for the responses here.

    What is so bad about the interest-only?

    What if we did an interest only and vowed to pay down part of the principal every month?
  2. Idaho

    Idaho Active Member

    We avoided PMI by splitting the loan into an 80/20 mortgage. The 20 is technically the down payment, but is a different loan so you can somehow avoid PMI.

    And, as DD said, if you can afford the payments from a 15 year loan, go for it. It pays off fast, fast, fast. If you anticipate selling the house in only a few years, though, a 30-year mortgage is probably a better option.
  3. linotype

    linotype Well-Known Member

    Totally agree on the anti-PMI rant, Modaho, if for no other reason than all of the interest you pay on the 80/20 is tax-deductible. That isn't true for PMI.

    I'm in the middle of sealing an 80/15/5 loan on what soon will become my first house -- 80 percent is the first mortgage, 15 percent is the piggyback mortgage and I'm putting 5 percent down.

    Make sure when you're shopping interest rates that you get 4, 5, even 6 Good Faith Estimates. I was about to jump off the ledge after sorting through four or five that were nearly identical. Then, I got the sixth and used that as leverage to negotiate a better rate and lower closing costs with another lender.

    I then locked my rate Thursday at 6.75 percent, mere hours before the Fed hiked up its rates and mortgage forecasters were calling for the average rate to climb above 7 percent. (I've been pretty proud of that over the past 30-odd hours, so now I'm waiting for it to backfire.)
  4. Idaho

    Idaho Active Member

    My, how things have changed in a year.

    We closed on our mortgage on July 5, 2005. We got a 4.875 rate on our 15-year loan.
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