Ramhock Posted February 24, 2007 Share Posted February 24, 2007 Please, can someone post a payment amount scale on the lowest payment full refinance product. To see how fast and high the payments get. Is this type of product fixed or variable rate? Not that it matters much, as it's all about the payment amount. Use 100K in your example, making it useful, as I'm sure I'm not the only curious one. Thank you in advance. My thoughts are that this type of loan can buy you some years, in situations where expenses should be going down (i.e. kids moving out), and maybe your income going up, somewhat. Quote Link to comment Share on other sites More sharing options...
Footballjoe Posted February 24, 2007 Share Posted February 24, 2007 I would think if someone wanted an extremely low payment amount it is because they are planning on moving in a few years and would rather use the money elsewhere. The first years of the mortgage you are putting almost nothing into your equity. If you want a very low payment because you cannot afford a larger one now and are thinking you will be able to make more on the payment later, this is a mistake. You cannot afford that house. I hope this made some sense. Quote Link to comment Share on other sites More sharing options...
Ramhock Posted February 25, 2007 Author Share Posted February 25, 2007 ^ for the Monday morning money managers Quote Link to comment Share on other sites More sharing options...
alexgaddis Posted February 25, 2007 Share Posted February 25, 2007 I do not understand the wording of the question... Quote Link to comment Share on other sites More sharing options...
TimC Posted February 25, 2007 Share Posted February 25, 2007 I would guess if you wanted the absolute minimum mortage payment with no regard to equity, money management, the future, etc, etc....an interest-only loan would be the way to go? Quote Link to comment Share on other sites More sharing options...
Chavez Posted February 25, 2007 Share Posted February 25, 2007 I would guess if you wanted the absolute minimum mortage payment with no regard to equity, money management, the future, etc, etc....an interest-only loan would be the way to go? Well, really, you could get yourself into a negative amortization mortgage, where your payment doesn't even cover the interest - the unpaid interest is then added to the principal. Most mortgage brokers don't give a crap about you as long as they get the close. Every fiber of my being screams that unless you KNOW you can flip the house in a short time period for a significant profit, or that you are going to hit the lottery, to avoid under any and all circumstances going into an I/O or negative am mortgage. Quote Link to comment Share on other sites More sharing options...
Ramhock Posted February 25, 2007 Author Share Posted February 25, 2007 I do not understand the wording of the question... The mortgages that are advertised everywhere, 200K for $660/mnth. I would assume at some point that the payment increases. Quote Link to comment Share on other sites More sharing options...
Chavez Posted February 25, 2007 Share Posted February 25, 2007 The mortgages that are advertised everywhere, 200K for $660/mnth. I would assume at some point that the payment increases. Just seeing an excessively low payment doesn't tell you anything. It could be any number of things - - ARM with an extremely low teaser - and be careful of these teaser rates, sometimes they're good for all of a week or so. - interest only - your payment pays NONE of the principal, it only pays interest - negative am - explained above - your payment doesn't even cover the interest; unpaid interest gets added to the principal so that you actually go "backwards" as you pay - balloon - low payments but your final payment is MUCH larger than all previous ones; say, standard 30 yr note, you pay 359 payments at $660 and one of $198,000 As a rule of thumb, none of these are products you want. I'd say the safest bet would be a balloon or I/O - but make sure you get it at a fixed-rate. Plus you need to realize your going to eat a few grand worth of fees twice - once for the initial finance and once on the re-fi. And I don't know the situation with your income going up, but counting on a pay raise isn't necessarily the safest thing to do. Quote Link to comment Share on other sites More sharing options...
Ramhock Posted February 26, 2007 Author Share Posted February 26, 2007 ***- interest only - your payment pays NONE of the principal, it only pays interest - balloon - low payments but your final payment is MUCH larger than all previous ones; say, standard 30 yr note, you pay 359 payments at $660 and one of $198,000*** These 2 examples would be one-in the-same, no? I will be getting a somewhat better paying job. My wife will be heading back into the workforce within the next few years, after managing our home for the last 22 years, when my 2 youngest start HS. My home is worth 300K. My 1st mortgage is 110K, 30-year fixed @ 5.5%, $800 payment. My interest only equity line, grows each year and is now around 40K, $300 payment. Need to replace the deck and the 2nd car, maybe a used CRV for 12-15K. At 48 years of age, taking care of these things and having $660 payments for the next 29 years, 11 months, seems worth considering. As of this second, we have decent -D/I, due to losing a very high-paying job about 5 years ago. Quote Link to comment Share on other sites More sharing options...
Rockerbraves Posted February 26, 2007 Share Posted February 26, 2007 (edited) Not in the mortage business but there is a mortage called a reverse mortgage that actually pays you instead of you paying them if you have the equity. Not sure of the qualifications so here is a link to learn more. http://www.ftc.gov/bcp/conline/pubs/homes/rms.htm Edited February 26, 2007 by Rockerbraves Quote Link to comment Share on other sites More sharing options...
Chavez Posted February 26, 2007 Share Posted February 26, 2007 ***- interest only - your payment pays NONE of the principal, it only pays interest - balloon - low payments but your final payment is MUCH larger than all previous ones; say, standard 30 yr note, you pay 359 payments at $660 and one of $198,000*** These 2 examples would be one-in the-same, no? Close; but with a balloon you are paying varying amounts of the principal as opposed to only the interest. Capisce? My home is worth 300K. My 1st mortgage is 110K, 30-year fixed @ 5.5%, $800 payment. My interest only equity line, grows each year and is now around 40K, $300 payment. Need to replace the deck and the 2nd car, maybe a used CRV for 12-15K. At 48 years of age, taking care of these things and having $660 payments for the next 29 years, 11 months, seems worth considering. So...for $5 a day you don't want to pay off your house? Quote Link to comment Share on other sites More sharing options...
Ramhock Posted February 26, 2007 Author Share Posted February 26, 2007 Close; but with a balloon you are paying varying amounts of the principal as opposed to only the interest. Capisce? So...for $5 a day you don't want to pay off your house? Well, actually it's $15/day, or less than a penny per minute! So, when you put it that way, Khloe, Kim and Kourtney Kardashian am I thinking?! Quote Link to comment Share on other sites More sharing options...
Azazello1313 Posted February 26, 2007 Share Posted February 26, 2007 your lowest payment (short of dipping into the negative amortization crap) will be with an interest only ARM. might not be a terrible idea, as long as you know you'll have to re-fi at the end of the ARM period, at whatever the rates happen to be then. you could roll everything into one of those at 200K (cashing out some equity, obviously) and get a pretty low payment. of course, you're hurting your long-term situation by giving up a lot of equity, but you realize that. if you're really strapped and expect your cash-flow to improve, it's not the worst idea ever. Quote Link to comment Share on other sites More sharing options...
alexgaddis Posted February 26, 2007 Share Posted February 26, 2007 30 Fixed rates are about the same as ARM's right now...so it wouldn't make much sense to get into an ARM...The loans you are talking about are Negative Amortization Loans that Chavez described...they have a low start rate for the first year or three years and you are paying less than interest only so your principal goes up in the first few years...they also tend to have HUGH prepayment penalties as thats how the LO makes his money on these loans...I have never writen a NEG AM loan as I haven't had a client who fits that product... You have a very good 1st mortgage right now so it really depends on your overall situation...I would look into refinancing that 2nd mortgage... Quote Link to comment Share on other sites More sharing options...
Azazello1313 Posted February 26, 2007 Share Posted February 26, 2007 (edited) 30 Fixed rates are about the same as ARM's right now...so it wouldn't make much sense to get into an ARM... probably true, i think the difference is sitting at about a quarter point or less. edit: but, if you know you're going to want to be refinancing in a number of years, the ARM might still make the most sense. Edited February 26, 2007 by Azazello1313 Quote Link to comment Share on other sites More sharing options...
alexgaddis Posted February 26, 2007 Share Posted February 26, 2007 probably true, i think the difference is sitting at about a quarter point or less. edit: but, if you know you're going to want to be refinancing in a number of years, the ARM might still make the most sense. yes i just checked, it is about a quarter of a point...it wasn't even that much last year... Quote Link to comment Share on other sites More sharing options...
Joessfl Posted February 26, 2007 Share Posted February 26, 2007 If only Suze were here...Suze Orman would know what to do. Quote Link to comment Share on other sites More sharing options...
Chavez Posted February 26, 2007 Share Posted February 26, 2007 If only Suze were here...Suze Orman would know what to do. The problem is Ramhock isn't looking for a long-term strategy - he's looking for a short-term cash grab. I don't recommend that. Quote Link to comment Share on other sites More sharing options...
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