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Bo1953 wrote:
> 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
Thank you all for your advice. The loan I want to get from the other
bank is a personal loan, not a home loan. I've excellent credit so
hopefully that shouldn't be a problem. I want to take a personal loan
for the 15% amount at a lower rate and use that to pay off the 2nd
loan, thus lowering my monthly. I want to do the 80/15/5 as opposed to
the 95/5 because not only do I avoid mortgage insurance (which isn't
tax-deductible) and pay mostly interest (which is tax-deductible), but
I also gain equity faster since I'll be paying principal twice as
fast (the 2nd loan is a 30 year balloon to be paid in 15 years). So,
hopefully, I can secure a personal loan at a lower rate to pay off this
high interest piggyback loan. Am I still missing something? lol
--rafiki
Thank you drive through.
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Re: real estate question
