Ignoramus32082 <ignoramus32082[at]NOSPAM.32082.invalid> wrote in news:bu3ukb
$mmt$1[at]pita.alt.net:

- quote -

I will, thanks. FWIW, the going rates of local lenders published in our
paper every week are running between 5.5 and 5.8 for 30 year fixed.

Cate

In article <Xns94706D323C4F3orson14850[at]130.133.1.4> , Cate wrote:
- quote -

We recently refinanced at 5.5% 30 year fixed, no closing cost. Your
rates seem a bit high, check into thepossibility of refinancing.

i

"Caroline" <caroline10027remove[at]earthlink.net> wrote in
news:uPGKb.23407$lo3.20306[at]newsread2.news.pas.earthlink.net:

- quote -

Hm. Maybe I will. I've been looking for a topic to write on for a while.
Thanks for the idea.

I tend to like houses built between 1900 and 1930, not cookie-cutter
subdivision houses. I've found that my choices in my price range and in
this architecture style (Arts & Crafts) boil down to this: I can have
one of the following: big and needing renovation or small and needing
little to no renovation.

- quote -

Yep. This is why we're only considering houses with significant recent
renovations. e.g., a whole new kitchen, or new plumbing or electrical.

- quote -

We haven't settled on a lender, but we got that 6.25% guy down to 5.8%,
and he said he'd beat anybody's rate. (This will be fun!) We've decided
to definitely use what we have for the down payment.

- quote -

Thanks very much.

Cate

"Cate" <notreally.orson14850[at]yahoo.com> wrote
- quote -

.... and less space to keep clean, which means more time to play. :-)

I downsized by about 30% recently. Love the lower taxes. Love not having to heat
and cool all that other space. Love being able to vacuum/mop all the floors
within 30 minutes. Love the two-car garage. Oops. That was an upgrade. :-)

Seriously, you ought to write an article about what led to your decision. It
seems like this is becoming a regular topic in investment circles.

I have been suggesting to people a 1998 Wall Street Journal on the subject of
how owning a house is over-rated as far as financial considerations are
concerned. I think its principles also apply to the notion of owning a large
(vice smaller) house.

Anyone interested should see
http://www.s-t.com/daily/10-98/10-17-98/t04ho127.htm

At 6.25%, I myself would put as much into the downpayment as possible. For my
comfort zone, this is just a bit too high of an interest rate to compete with
(via an investment) for the next five years or so. If they were lending at 5%, I
might consider it. Hard to say without considering the other transaction fees.
Also, the peace of mind of owning a home debt free has a certain value. I don't
like the feeling of the bank owning a part of me. I don't like their monthly
statements plaguing my mailbox.

Good luck with your new home. :-)

"cal-lester" <cal-lester[at]comcast.net> wrote in
news:YhEKb.77016$xX.543904[at]attbi_s02:

- quote -

In what situation would this be advantageous to the buyer? I can't picture
any.

I wrote:
- quote -

That's exactly what I'm thinking. Thanks for your input.

In fact, thanks to everyone for all your input!

Cate

"Ed Zollars, CPA" <ezollar[at]mindspring.com> wrote in news:btf17601js1
[at]enews3.newsguy.com:

- quote -

I didn't even know about interest-only loans until I was poking around
online today. I can't imagine a scenario in which that would be the best
choice for me.

- quote -

He's the lender, not a broker. I'm waiting to see what he pitches
first--if he includes a scenario using our 30% down to get a different
set of numbers. If not, I'll ask for one and compare the two.

- quote -

That's exactly what I was thinking. And since I'm a risk-averse
invester, I'm not likely to make a bundle investing this money another
way.

Or, as my newly-minted stock broker friend advised me: why take out a
loan for money I already have?

Cate

Ram Samudrala <ram[at]sp1.compbio.washington.edu> wrote in news:btf4ud$nfk$1
[at]nntp6.u.washington.edu:

- quote -

Ah. This might be what he's thinking. I'll report back either way when I
find out.

Cate

"John A. Weeks III" <john[at]johnweeks.com> wrote in
news:060120041249203554%john[at]johnweeks.com:

- quote -

I've yet to see the numbers in this scenario, but he indicated this would
be a 6.25% rate with no points and no PMI.

- quote -

Right. I learned the hard way about PMI. (PMI is the biggest ripoff I've
ever endured.) But he indicates there is no PMI, which is confounding to me
without 20% down.

Cate

John A. Weeks III <john[at]johnweeks.com> wrote:

- quote -

It depends on how the 100% loan is done. If it's an 80-20 split (i.e.,
two mortgages), then you avoid PMI. I think this (getting two
mortgages) is a better option than paying 0-19% down and then paying
PMI.

--Ram

Cate wrote:
- quote -


Allow me to first make my disclaimer. I am NOT a mortgage Broker
or associated in any fashion with the mortgage industry................

However, the answer to the above is very simple, in that the
payments that you would be making will be INTEREST ONLY........
Nothing being applied to REDUCE the mortgage.

- quote -

YOU still owe HIM/HER the ENTIRE amount of the loan...........
He has received interest for many years, and then when you
sell (or payoff) he gets the ENTIRE amount back.

- quote -


That is similar to "how high is up?". YOU have to understand
YOUR tolerance for debt. Possibly if you are in a high tax bracket,
and you are also an ASTUTE investor, who can earn MORE on
those dollars than what you are paying in interest, it might work
out just fine. HOWEVER if neither of the above apply to YOU,
then you you just might place yourself in a place that you do NOT
want to be somewhere down the line...............

Cal Lester CLU
(not a broker)

- quote -

Cate wrote:

- quote -

Assuming that John's assumption is correct (an interest rate
wouldn't go *down* on a zero down loan), then the simple
answer would be either that the costs are going to be picked
up elsewhere *OR* you are going to be paying substantially
less on the principal than you otherwise would (that is, you
may have an "interest only" loan).

You have to look behind the monthly payment to see what else
is happening. If for some reason he is offering a lower
interest rate than your other loan, logic would dictate that
if you asked him to go back to the same lender and ask for a
rate with 30% down you'd get an even lower rate--as well as
no mortgage insurance charge.

I'm always suspicious when anyone starts talking solely
about monthly payments. That variable is important for
purposes of determining if your cash flow will work in the
short term, but if you don't watch the other variables you
can get a real problem in the long term. For instance, if
it is an interest only loan, that would mean that the only
way you would build any equity is if the price of the home
itself rises, you start making additional payments against
the principal (which then means you no longer have the same
payment <grin> ) or you refinance and get put on a regular
amortization (again, with payments rising).

With 30% down, you would be much better protected against a
slump in the housing market that might arrive at the same
time you are forced to sell (say you get transferred out of
state). Now, you could keep the 30% you won't pay down in a
low risk investment--but then it's not likely you'll
"outearn" what you are paying in additional interest on the
mortgage to carry that additional debt.

--
Ed Zollars, CPA
Phoenix, Arizona

In article <Xns946864C37C6F4orson14850[at]130.133.1.4> , Cate
<notreally.orson14850[at]yahoo.com> wrote:

- quote -

The money has to come from somewhere. A vastly lower interest rate
could explain it, but that is unlikely since most zero down programs
carry a higher interest rate than a 20% down loan. Maybe they are
hiding it in the closing costs? Are you being asked to pay points?

- quote -

If you have less than 20% down, you pay mortgage insurance. Since the
lender is already protected in the event of default, this is pure
profit.

- quote -

Again, why pay mortgage insurance when you can avoid it? Mortgage
insurance is 100% pure flush money for the home buyer. You would
get just as much in return for flusing $100 a month down the toilet.

-john-

--
================================================== ==================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ==================

My husband and I are mortgage shopping at the moment, in anticipation of
buying a smaller house than the one we last owned. Too much money going
toward mortgage, PMI, taxes taught us cheaper is better.

This time around we have 30% for a down payment in the price range we're
looking in.

The first lender we contacted mentioned he has a few 100% loan programs,
and said he'd work up some scenarios that would allow us to finance the
entire cost of the house and keep our down payment money to invest in
another way. He also said in these scenarios the monthly payment would
still be the relatively low number that we want.

I'm due to get the numbers later today. Meanwhile, I have a couple of
questions.

1. How is it possible for us to offer no down payment and still have the
same monthly payment we would have had on a loan that had 30% down?

2. What's the catch? How does the lender benefit from this type of loan?

3. Is it advisable to put no down payment on a house even when you have it?

Thanks,
Cate