Leonard Skinnard 0 Posted August 2, 2007 Here's my sitch... Wife and I are first-time buyers here in the real estate mecca called California. For those who have been in hibernation, that means you spend billions and billions of dollars on a home that's the size of most people's bathrooms in other states. But I digress. We are half way through our 30 day escrow on our first house in southern California, and getting close to locking in our rates. I've tried to "comparison shop" the rates our broker is quoting us, but it's been difficult matching apples to apples (I've used sites like bankrate.com, etc). Can anyone out there in the mortgage know tell me what you'd consider competitive interest rates for the following types of loans? Purchase price: $540K-ish, 5% down 1st loan (80%): 5 yr or 7 yr ARM (LIBOR) Interest Only 2nd loan (15%): Closed End 2nd Balloon 30/15 Credit scores are both 800+ We plan on another move or a refi within 5-7 years, thus the reason for Interest Only and the Balloon 30/15. Oh, and also because housing in so Cal costs a focking fortune. Any suggestions, help, insight, honest opinions, etc. from any financial geeks out there would be much appreciated. GFIAFP, Skinnard Share this post Link to post Share on other sites
TylerRoseFan 16 Posted August 2, 2007 Seriously, move. Do you have any idea what 1/2 mil will buy in tx/louisana???? That's absurd. Anyway, if you can't afford a full mortgage now, there's a good chance you won't be able to in the future. Share this post Link to post Share on other sites
Drizzay 651 Posted August 2, 2007 5 or 7 yr LIBOR interest only?? SERIOUSLY??? Please don't do the interst only...if shiot blows up, you could be screwed. Never bank on the fact that you will be able to refi and get a lower fixed rate. There are many factors that could play in that could cause your credit to go to the shitter: medical expenses, nationwide economic reasons, identity fraud, etc. It is a risk, but if you think you can handle it financially, then go for it. Just focus on building equity (ie, don't settle for the minimum payments the first 5 years). Share this post Link to post Share on other sites
redtodd 7 Posted August 2, 2007 If you can't afford the house as a 30 year fix, you shouldn't buy it. Share this post Link to post Share on other sites
Cdub100 3,453 Posted August 2, 2007 If you can't afford the house as a 30 year fix, you shouldn't buy it. Share this post Link to post Share on other sites
Yer mom 2 Posted August 2, 2007 Go to my website: www.amerisave.com/partner/bwilliamson If you havent locked in yet, your guaranteed to get the lowest combination of rate/closing costs in the industry period or we pay you $500. Browse around the site and check the credibility, its an absolute no brainer. Call me with questions (my number is on there) and I will guide you through things and break down what options make the most sense for your situation. Also, if your loan doesnt close (which it guaranteed will) by the close of escrow date you get $1000. Check it out! Share this post Link to post Share on other sites
edjr 5,724 Posted August 2, 2007 Go to my website: www.amerisave.com/partner/bwilliamson If you havent locked in yet, your guaranteed to get the lowest combination of rate/closing costs in the industry period or we pay you $500. Browse around the site and check the credibility, its an absolute no brainer. Call me with questions (my number is on there) and I will guide you through things and break down what options make the most sense for your situation. Also, if your loan doesnt close (which it guaranteed will) by the close of escrow date you get $1000. Check it out! amerislave Share this post Link to post Share on other sites
G-in O-town 0 Posted August 2, 2007 Make sure you get at least 3 Good Faith Estimates from mortgage brokers in your area and stay away if at all possibe from those internet companies (stay local). Let each company know you want the best possible rate with NO points or origination fees and don't be afraid to tell them your getting other estimates to compare. Since your 1st mortgage amount is over 417K you'll be a jumbo mortgage where rates are slightly higher. With respect to rates, if you were coming to me you'd be looking at 5/1 IO Libor at 6.625% and your second somewhere in the upper 7% range. The 7/1 Libor would be about .25% higher on the rate vs 5/1 Libor. Now I'm in the state of Florida, but pretty sure these rate are close to what you should get in CA. Lastly, when you do decide on a mortgage broker make sure you get a lock-in agreement from them at the time of your lock. Good luck Share this post Link to post Share on other sites
TimmySmith 2,782 Posted August 2, 2007 One more time for those who are slow. IO ARMs are NOT inherently dangerous. The low down payment on an inflated priced house is the dangerous part. Putting only 5% down on a house is scary these days, but since none of us has a crystal ball, who knows what prices will be in 5 years when you decide to move on. If you are truly on a 5 year plan, there is no use in attempting to put the small amount of equity in your house, when you could invest the same money in CD and get a better return. Share this post Link to post Share on other sites
Groundhog 24 Posted August 2, 2007 Here's a recommendation: keep renting. Your strategy of doing a re-fi in a few years, or moving, is predicated on housing prices remaining steady or improving. In a declining market, what choice will you have? - A refi is going to take into account the market value of the home. If the market value drops, you might not be eligible to refi the entirety of your current mortgage balances, great FICO score or not. You might need to come up with a considerable amount of down payment as part of the refi. - If you stay in the same house and don't refi, you run the risk of not being able to make the suddenly higher payments. - If you decide to move, you might discover that the new market value of the home you put up for sale doesn't cover what you still owe in principal. Basically you are setting the stage for not being able to live where you are, and not being able to move elsewhere. And when that happens, you could go into foreclosure. The silver lining in all of this, is that if your household income can be expected to grow - and by grow, I mean by a LOT - then you might be able to afford those suddenly higher payments in 5-7 years. The key is whether that expectation is reasonable or not. It is cases such as this where an IO loan can make sense. Bottom line, it sounds like you'd be taking on an awful lot of risk to buy a house now. Why not keep renting, bank some more down payment money, and wait for prices to come down? Share this post Link to post Share on other sites
GettnHuge 1 Posted March 9, 2009 Here's a recommendation: keep renting. Your strategy of doing a re-fi in a few years, or moving, is predicated on housing prices remaining steady or improving. In a declining market, what choice will you have? - If you decide to move, you might discover that the new market value of the home you put up for sale doesn't cover what you still owe in principal. Basically you are setting the stage for not being able to live where you are, and not being able to move elsewhere. And when that happens, you could go into foreclosure. Bottom line, it sounds like you'd be taking on an awful lot of risk to buy a house now. Why not keep renting, bank some more down payment money, and wait for prices to come down? Share this post Link to post Share on other sites
RLLD 3,541 Posted March 9, 2009 sitch? This exact reply was on its way from me if you hadn't hit it first.... Share this post Link to post Share on other sites
nobody 2,105 Posted March 9, 2009 This exact reply was on its way from me if you hadn't hit it first.... He only beat you about about 18 months. Share this post Link to post Share on other sites
tikigods 76 Posted March 10, 2009 Buy it. Get it insured. Burn it. HTH. Share this post Link to post Share on other sites
patweisers44 710 Posted March 10, 2009 Your strategy of doing a re-fi in a few years, or moving, is predicated on housing prices remaining steady or improving. In a declining market, what choice will you have? Obama will pay his mortgage. Share this post Link to post Share on other sites
RLLD 3,541 Posted March 10, 2009 Obama will pay his mortgage. Are you listening President Obammmmaaaa??? Share this post Link to post Share on other sites
KSB2424 3,087 Posted March 10, 2009 Please do the interst only...if shiot blows up, the gov't will just bail you out. Share this post Link to post Share on other sites
