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Variable Interest Rate, you get low interest upfront, then 3 years later it
gets adjusted based on a new market rate. This is dangerous loan at this
moment. It was great in 1998-2001 when the interest signal is going down
the hill, now the signal is going up the hill, you don't want this type of
loan. Why? because you will end up with high interest and if you are unable
to pay after 4 months then you lose everything including your money down and
your equity.
Another bad thing is, every time you resynchronize with new rate, you paid
90% interest to the bank each month. You don't build equity fast this way,
fixed rate is much better. On variable rate, to build fast equitty is to buy
when the interest signal going down. I say like this because it's similar
to the stock signal.
"Noozer" <dont.spam@me.here> wrote in message
news:XJ3bh.387640$5R2.372574@pd7urf3no...
>I had a friend describe a loan that he obtained from his bank instead of a
>regular mortgage. It sounds like the perfect thing for us, but I am not sure
>of it's official name.
>
> Basically, it's a very large, low interest line of credit. The interest
> rate floats and I could lock it in at any time.
>
> We currently have a line of credit with a large limit, several credit
> cards with high limits (paid off each month), and our mortgage (locked at
> 4.8%). We've got more than $200,000 equity in our home, much more than all
> of our current debts combined.
>
> So... When I go to the bank what do I ask for?
>
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Re: What is this kind of mortgage/loan called?
