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rafiki wrote:
> Hey all, was wondering if someone could share some advice for a first
> time buyer. I'm getting a house with a 80/15/5 loan. The 15% loan
> has a very high interest rate. I am thinking about getting a loan from
> another bank for the amount of the 15%, paying off the first lender,
> and thereby reducing my monthly payments due to the smaller interest
> rate. The lender's rate for the 15% is 8.45 on a 15 yr balloon
> payment. Could I go to another bank and borrow the amount for the 15%
> at 6.3% and pay the first lender off? Is there some sort of catch I am
> missing?
>
> Thanks,
> --rafiki
>
> Thank you drive through.
rafiki,
I may be missing something because a rate of 6.3% as of 28 June 06 is
between 7.5% and 17% for either a HELOC or cash out 2nd mortgage AND
the rate does depend on credit, loan to value and assets. For someone
to get 6.3% on a 2nd or HELOC would mean paying a high discount rate of
at least 5% or thereabouts.
It sounds like you haven't purchased yet, to go to another bank and
get funds to close will put in possibly, a perilous position as to your
debt ratio. 8.45% for a 2nd mortgage is NOT high at all, then again
pending on ones perspective. Being a first time home buyer I can
understand the reason you believe it is high. Yet the days of 5.75%
first mortgages are gone, for now at least, and comprable 2nds at 6.25%
are as well.
Good luck with what you decide.
Samuel S.
Mortgage Banker
Freedom Mortgage
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Re: real estate question
