On Mar 30, 12:53 pm, "woess...[at]gmail.com" <woess...[at]gmail.com> wrote:
- quote -

I was just thinking something similar. Actually, I did the calculation
for the breakeven point. Let's say he got the 1st mortgage for $417K [at]
5.875% = $2468. That means that the incremental portion of the jumbo
mortgage is $183K [at] 7.125% = $1233/mo. Therefore, if you can get a 2nd
mortgage for a rate better than 7.125%, then you should do 2
mortgages rather than 1 jumbo.

On Mar 31, 4:56 am, "Mike rock" <mikep...[at]optonline.net> wrote:
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I would say option one is the smartest choice even a smaller down
payment I would recommend, as I stated in my email Mike. As you can
see in the analysis i've run, your gross effective interest rate
utilizing Bill's option 3 (no offense to you Bill) would be 6.599% and
would yield a payment $200 higher than option 1. My best advice? put a
small 10% down payment, with or without mortgage insurance (mortgage
insurance is now tax deductible as of Jan 1, 2007), and leverage the
rest of your liquid assets to earn interest and compound for you.

See below:

The blended rate for your first and second mortgage is 6.599%.
This is based on a first mortgage of $417,000.00 at 5.88% and a second
mortgage of $183,000.00 at 8.25%. Your total payment is $3,841.53 per
month.

Mortgage Loan Summary
Purchase Price $750,000.00
Down payment $150,000.00
Loan one amount $417,000.00
Interest Rate 5.88%
Term 30 years
Monthly payment $2,466.71
Loan two amount $183,000.00
Interest Rate 8.25%
Term 30 years
Monthly payment $1,374.82
Total amount financed $600,000.00
Total monthly payment $3,841.53
Blended interest rate 6.599%


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On Mar 30, 2:53 pm, "woess...[at]gmail.com" <woess...[at]gmail.com> wrote:
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Interesting point. Thank you.

On Mar 30, 3:03 pm, "Mike rock" <mikep...[at]optonline.net> wrote:
- quote -

There's a 3rd option...
Put 20% down ($150k)
Take out a 1st mortgage for $417K
Take out a 2nd mortgage for $183K

The goal here is to get the 1st mortgage (the biggest chunk of money)
financed at the lowest possible rate. In exchange, you accept a
higher rate on the 2nd mortgage. This can be a good tradeoff, since
the amount of the 2nd mortgage is less than half the amount of the
first. This can be especially beneficial if you accelerate payment of
the 2nd mortgage.

--Bill

I am interested in buying a new home being built in my neighborhood.
Assuming I can get it for $750K, I was trying to decide my options as
to which is better. Currently I have sufficient funds to close on this
house before I sell my existing one. After all the math, these are my
2 options.

Option 1
Put 20% down ($150k), financing $600K [at] 6.25% $3,694 /mo. with 380K
left in savings acct.

Option 2
Put 333K down, financing 417K( limit for conventional mortgage) [at]
5.875% $2468/mo with 200K left in savings acct.

The obvious difference is the 180K extra in liquid cash I'll have if I
choose the jumbo. I still think 6.25% is pretty good for a jumbo, and
I always liked having cash on hand. I was wondering what anyone elses
thoughts were.Thanks