mortgage question

Thanks for the responses here.

What is so bad about the interest-only?

What if we did an interest only and vowed to pay down part of the principal every month?

 

We avoided PMI by splitting the loan into an 80/20 mortgage. The 20 is technically the down payment, but is a different loan so you can somehow avoid PMI.

And, as DD said, if you can afford the payments from a 15 year loan, go for it. It pays off fast, fast, fast. If you anticipate selling the house in only a few years, though, a 30-year mortgage is probably a better option.

 

Totally agree on the anti-PMI rant, Modaho, if for no other reason than all of the interest you pay on the 80/20 is tax-deductible. That isn't true for PMI.

I'm in the middle of sealing an 80/15/5 loan on what soon will become my first house -- 80 percent is the first mortgage, 15 percent is the piggyback mortgage and I'm putting 5 percent down.

Make sure when you're shopping interest rates that you get 4, 5, even 6 Good Faith Estimates. I was about to jump off the ledge after sorting through four or five that were nearly identical. Then, I got the sixth and used that as leverage to negotiate a better rate and lower closing costs with another lender.

I then locked my rate Thursday at 6.75 percent, mere hours before the Fed hiked up its rates and mortgage forecasters were calling for the average rate to climb above 7 percent. (I've been pretty proud of that over the past 30-odd hours, so now I'm waiting for it to backfire.)

 

My, how things have changed in a year.

We closed on our mortgage on July 5, 2005. We got a 4.875 rate on our 15-year loan.