Mortgage question

**screamin chicken** · 01-11-2007, 05:44 AM

I re financed 2 yrs. ago and I get a call from my Mort. Co. saying my rate will be going up and that they are going to set me up on a fix rate, and that it will cost me nothing.I just need some input about this, I would rather be on a fix rate as long as it stays the same or better........

**toneloc60** · 01-11-2007, 05:46 AM

yes, you want a fixed rate. Especially if it is equal or lower than what you have now.

**nhraformula** · 01-11-2007, 05:53 AM

if its the same and no fee, go for it

**screamin chicken** · 01-11-2007, 06:19 AM

thats what I figured, I just did know if this would more months are change anything about the loan.Thanks for the speedy replies.....

**SexOnWheels** · 01-11-2007, 06:42 AM

In some cases it is better to have it fixed. Your payments never change.

But up here (Canada) the rate has still been going down so a variable has been working out for me for the last four years. The payment has been steadily going down but my deal was 1.5% below prime (variable) for five years.

**Firehawk1120** · 01-11-2007, 07:05 AM

is your current mort. a variable rate? if so they do tend to go up each year depending on prime.

If they are telling you that you are getting a fixed rate at a higher rate then your variable now it doesn't make sense to go for it.

Can you explain a bit better what your current type and rate of mortgage is and what they are exactly offering you?

**ShelbySS** · 01-11-2007, 07:07 AM

Originally Posted by screamin chicken

I re financed 2 yrs. ago and I get a call from my Mort. Co. saying my rate will be going up and that they are going to set me up on a fix rate, and that it will cost me nothing.I just need some input about this, I would rather be on a fix rate as long as it stays the same or better........

Right now the market rates on houses are as good as they're going to get.....I would totally do the fixed rate. STAY AWAY from Variable rates!

**Firehawk1120** · 01-11-2007, 12:44 PM

Variable rates aren't bad if you know how to work them.

3 or 5 year variable means the first 3 or 5 years you have a fixed rate and then it is variable. BUT your payment is usually much lower allowing you to buy a bigger home. Then if you have additional funds you pay off the PRINCIPAL payment faster then a conventional fixed rate. SO in 3 or 5 years when the variable portion is coming up you re-finance at a lower principal amount therefore your payments continue to stay low.

People just don't know how to budget money and they never pay the additional amount that they can afford.

**Modulistic** · 01-11-2007, 12:51 PM

Originally Posted by Firehawk1120

Variable rates aren't bad if you know how to work them.

3 or 5 year variable means the first 3 or 5 years you have a fixed rate and then it is variable. BUT your payment is usually much lower allowing you to buy a bigger home. Then if you have additional funds you pay off the PRINCIPAL payment faster then a conventional fixed rate. SO in 3 or 5 years when the variable portion is coming up you re-finance at a lower principal amount therefore your payments continue to stay low.

People just don't know how to budget money and they never pay the additional amount that they can afford.

hows that non-housing bubble coming along?

**Firehawk1120** · 01-11-2007, 12:52 PM

coming along just fine. You keep believing you will afford more of a house next year and I'll keep laughing as the prices continue to rise.

**Modulistic** · 01-11-2007, 12:54 PM

Originally Posted by Firehawk1120

coming along just fine. You keep believing you will afford more of a house next year and I'll keep laughing as the prices continue to rise.

**my5thNewUsernameHere** · 01-11-2007, 02:16 PM

Originally Posted by Firehawk1120

3 or 5 year variable means the first 3 or 5 years you have a fixed rate and then it is variable. BUT your payment is usually much lower allowing you to buy a bigger home. Then if you have additional funds you pay off the PRINCIPAL payment faster then a conventional fixed rate. SO in 3 or 5 years when the variable portion is coming up you re-finance at a lower principal amount therefore your payments continue to stay low.

If you can't afford the house except because of a variable rate or zero-interest, then you can't afford the house.

**manxk** · 01-11-2007, 02:18 PM

test

**56car** · 01-11-2007, 02:57 PM

The only way a variable works in my mind is if you are only loaning for short term. Getting a variable rate on a home you plan on staying right now is not a great idea. If you plan on moving in a year or so, a variable may save you some money.

In your case, if you plan on staying a while and they will set your variable rate at a compettive fixed rate without charging you, I would do it. I only see the rates going up with the unemployement being so low.

**gonzo99ta** · 01-11-2007, 02:58 PM

it's not a matter of being able to afford or not... most variables are lower than the fixed rate. My variable is locked at 4.5% for next couple years, while i'm paying more than the minimum pmt the balance goes down quicker because right now i'm paying less interest than the comparable 6% that i would have gotten on a fixed rate 30yr. Therefore with the same payment 2 years from now (when i'll be selling anyway) i'll owe less on my house than the same person who got a 30 yr fixed rate.

Now if i knew i was planning to stay in this house for the next 30 years i would have looked harder at the fixed rate.

**my5thNewUsernameHere** · 01-11-2007, 03:38 PM

Originally Posted by gonzo99ta

Now if i knew i was planning to stay in this house for the next 30 years i would have looked harder at the fixed rate.

Why not just rent then? You'll save on closing costs and realtor commissions. Many people say exactly that and get screwed when the market dries up a few percent and they can't get back what they spent on it.

Generally, I don't see real estate as a smart short term (<7 yrs) investment. Nonetheless if you're sure you'll come out ahead, got for it!

**Modulistic** · 01-11-2007, 03:57 PM

When the letter comes in the mail that the mortgage payment is going to go up by 10-50%, I wonder how many people that news comes as a total shocking newsflash to them?

probably more than I would like to imagine.

note: 1 trillion dollars in ARM loans are going to reset in 2007. I forsee a 'jump' in foreclosures.

LOL. this will drive the price of housing UP of course

**gonzo99ta** · 01-11-2007, 04:03 PM

I'm military, so moving is just part of the job...

rent is waisted money to me.

i had no realtors fees since it was a brand new house and yes i'll make out just fine when i sell. This isn't the 1st home i've owned. I bought my 2st house when i was 20 and my friends all said the same thing why not rent? I've always come out ahead and lived in nicer places than rentals would be.

i actually have another house that i rent out in another state that is getting me more than what the mortgage is...

I don't know why people are scared of todays interest rates they really are not high... they are the same or less than when i bought my 1st house in 93. Now when my parents bought there house in 83 the rate was 12%... that would be scary!

**my5thNewUsernameHere** · 01-11-2007, 04:23 PM

Originally Posted by gonzo99ta

I'm military, so moving is just part of the job...

rent is waisted money to me.

Hate to say it, but you also pay a premium if you buy a new house. In this market, I see it as a risky move if your plan is to "flip it".

Renting isn't wasted money if you move every 2 years...it a sense it's insurance.

However, I've got a cousin that's in the military that's making the same moves and is on his 2nd home. He's made out well because he invested a lot of his time improving the property that he's bought and sold.

I would not want the hassle of buying/selling every year or two. It usually doesn't make good financial sense in the long term, just read any book on mortgages.

**Modulistic** · 01-11-2007, 04:41 PM

Originally Posted by gonzo99ta

I'm military, so moving is just part of the job...

rent is waisted money to me.

i had no realtors fees since it was a brand new house and yes i'll make out just fine when i sell. This isn't the 1st home i've owned. I bought my 2st house when i was 20 and my friends all said the same thing why not rent? I've always come out ahead and lived in nicer places than rentals would be.

i actually have another house that i rent out in another state that is getting me more than what the mortgage is...

I don't know why people are scared of todays interest rates they really are not high... they are the same or less than when i bought my 1st house in 93. Now when my parents bought there house in 83 the rate was 12%... that would be scary!

you can refinance the interest rate when rates go down. you cant renegotiate the price you agreed to pay for a house. think about that.