Question for the Homeowners: Fixed Rate or Adjustable Rate Mortage? - GoFuckYourself.com

badmunchkin · 07-15-2005, 12:50 PM

I'm about to buy my first home. Question, for the homebuyers, is your mortgage a fixed or adjustable rate?

My bank said they can offer me an ARM that obviously will have a way lower rate then a fixed rate, I'd only be paying interest in the beginning but that my rate would be locked in for 5 years (so apparently no change in monthly payments even if interest rates skyrocket). I plan on selling the house in under 5 years, I'll live there temporarilly but it's basically an investment property.

Given this situation, would you go with the ARM or fixed rate mortgage?

badmunchkin · 07-15-2005, 03:35 PM

bump for the real estate pros

tony286 · 07-15-2005, 03:36 PM

fixed fixed fixed adjustables can fuck you very hard

Azlord · 07-15-2005, 03:37 PM

fixed if you plan on living there for a while.

badmunchkin · 07-15-2005, 03:39 PM

Quote:

Originally Posted by tony404

fixed fixed fixed adjustables can fuck you very hard

Even if I'm going to turn it around in 3 years? Also, even though it's interest-only payments, I was told with this ARM the rate would stay fixed for 5 years. Are they full of shit?

DamageX · 07-15-2005, 03:42 PM

If they fix it for such a long time, be prepared for it to be heftily higher than the adjustable interest rate.

Azlord · 07-15-2005, 03:44 PM

30 yr fixed. look what happened in the 80's
adjustable rate can really kill ya. and there is a lot of talk about the "bubble bursting".

brand0n · 07-15-2005, 03:48 PM

dear god man fixed.

5 years @ 5% is great, but lets say the house dont sell the 1st year, and the say well thats not our problem, welcome to 12%

whoa

something else u should think about, double your montly mortgage payment. and ill tell you why

lets say your house is 200k @ 5%
so thats 10k a year you owe in intrest. if you are paying 1k a month (should be around that) then you are paying 12k a year, 10 of that is going to intrest.

if you dont double it, atleast pay payment + a half. in 5 years youll be very happy you did

Fresh · 07-15-2005, 03:54 PM

Quote:

Originally Posted by tony404

fixed fixed fixed adjustables can fuck you very hard

Very wrong.

There are a bunch of differant ARMs you can choose from. The best loan in the market at the current moment is called an Option ARM. This type of loan will give you four differant payment options every single fucking month. For example...

Payment One: 1%
Payment Two: Interest Only
Payment Three: 30 year amortization
Payment Four: 15 year amortization

Now, you get to choose every single month which payment you wanna make. If you make the 4th payment every single month, you will have your home paid off in 15 years. If you make the 3rd payment, home gets paid off in 30 years. If you make the 2nd payment, your only paying interest and no principle is reduced just like the loan you mentioned. However if you make the 1st payment of 1% which we reffer to as the "x-mas payment", whatever the differance is between your full interest rate and the one percent rate will be applied to your mortgage balance. So basiclly, your overall balance goes up a couple hundered every month if you keep making the 1st payment option of 1%.

The reason for getting into a loan like this is that you have options. If you cant send a 30 year payment for some reason for that month, go ahead and make the interest only payment, if you cant afford that, you can make a 1% payment (which you wanna stay away from and only use when you absolutly have to) and that will add a lil to your balance.

Now this is a ARM, so your rate will fluctuate. But heres the good part....this type of ARM is tied to an index called the MTA. The MTA index always averages the last 12months. So even if there was a sudden spike in rate, your payment dosnt go up like crazy, only a couple bucks. Unlike regular ARMs, which are based off of that months current rate which in return give you big ups and downs in payment.

Another very important part to this loan is that the bank your brooker takes you to will pay the brooker up to 3 points. So you can actually make a deal with your brooker to get into a loan like this and have your points and fees paid thru the points the bank gives the brooker as a "kick back" pimp, pimp

Maybe Prodinix should do Custom Programming and Home Loans

07-15-2005, 12:50 PM	#1
badmunchkin Confirmed User Join Date: Feb 2003 Location: Los Angeles, CA Posts: 3,797	Question for the Homeowners: Fixed Rate or Adjustable Rate Mortage? I'm about to buy my first home. Question, for the homebuyers, is your mortgage a fixed or adjustable rate? My bank said they can offer me an ARM that obviously will have a way lower rate then a fixed rate, I'd only be paying interest in the beginning but that my rate would be locked in for 5 years (so apparently no change in monthly payments even if interest rates skyrocket). I plan on selling the house in under 5 years, I'll live there temporarilly but it's basically an investment property. Given this situation, would you go with the ARM or fixed rate mortgage? __________________ Custom, Full Color Printing with BIG Discounts for GFY! ICQ 283197499

07-15-2005, 03:35 PM	#2
badmunchkin Confirmed User Join Date: Feb 2003 Location: Los Angeles, CA Posts: 3,797	bump for the real estate pros __________________ Custom, Full Color Printing with BIG Discounts for GFY! ICQ 283197499

07-15-2005, 03:42 PM	#6
DamageX Marketing & Strategy Industry Role: Join Date: Jun 2001 Location: Former nomad Posts: 14,293	If they fix it for such a long time, be prepared for it to be heftily higher than the adjustable interest rate. __________________ Whitehat is for chumps If you don't do it, somebody else will - true story!

07-15-2005, 03:48 PM	#8
brand0n been very busy Join Date: Nov 2002 Location: the queen city Posts: 26,983	dear god man fixed. 5 years @ 5% is great, but lets say the house dont sell the 1st year, and the say well thats not our problem, welcome to 12% whoa something else u should think about, double your montly mortgage payment. and ill tell you why lets say your house is 200k @ 5% so thats 10k a year you owe in intrest. if you are paying 1k a month (should be around that) then you are paying 12k a year, 10 of that is going to intrest. if you dont double it, atleast pay payment + a half. in 5 years youll be very happy you did __________________ want to buy this spot for cheap? it is of course for sale. long term deals are always the best bet. brand0n/ at/ a o l dot commies.

07-15-2005, 03:36 PM	#3
tony286 lurker Industry Role: Join Date: Aug 2002 Location: atlanta Posts: 57,021	fixed fixed fixed adjustables can fuck you very hard

07-15-2005, 03:37 PM	#4
Azlord Confirmed User Industry Role: Join Date: Dec 2003 Location: City... City of Satan Posts: 2,651	fixed if you plan on living there for a while.

07-15-2005, 03:44 PM	#7
Azlord Confirmed User Industry Role: Join Date: Dec 2003 Location: City... City of Satan Posts: 2,651	30 yr fixed. look what happened in the 80's adjustable rate can really kill ya. and there is a lot of talk about the "bubble bursting".