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Home > Archive > Real Estate Investing > April 2006 > Structure Mortgage letter
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Structure Mortgage letter
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| Dazzler 2006-04-08, 4:21 pm |
| Just wondering if anybody has any opinions on this Structure mortgage
co we got a letter on to combine mortgage and equity loans for 6.22%
for 228k. For a monthly payment of $624 monthly. We have good credit.
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| boinker 2006-04-14, 1:21 am |
| Careful there,,, a 30 year fixed rate of 6.22% on a loan amount of $228K
comes to a monthly principle and interest payment of $1399.xx. Clearly you
will be paying much more than $624 per month at some future point, indeed,
you'll probably end up paying more than $1399.xx per month once the teaser
rate on this note expires.
Read the details, watch for prepayment penalties and be sure you can afford
considerably higher payments as the years pass.
"Dazzler" <vile5@comcast.net> wrote in message
news:1144521763.275239.12690@z34g2000cwc.googlegroups.com...
> Just wondering if anybody has any opinions on this Structure mortgage
> co we got a letter on to combine mortgage and equity loans for 6.22%
> for 228k. For a monthly payment of $624 monthly. We have good credit.
>
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| Dazzler 2006-04-15, 10:21 am |
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boinker wrote:[color=darkred]
> Careful there,,, a 30 year fixed rate of 6.22% on a loan amount of $228K
> comes to a monthly principle and interest payment of $1399.xx. Clearly you
> will be paying much more than $624 per month at some future point, indeed,
> you'll probably end up paying more than $1399.xx per month once the teaser
> rate on this note expires.
>
> Read the details, watch for prepayment penalties and be sure you can afford
> considerably higher payments as the years pass.
>
>
> "Dazzler" <vile5@comcast.net> wrote in message
> news:1144521763.275239.12690@z34g2000cwc.googlegroups.com...
Well the idea is to pay the min while we pay other debt off, actually I
am now working on combining a mortgage, equity loan, 12k cc, 20k car.
Which would be just under the 228k anyway. Car payment is $500, cc
$160, Mortage $1100, Equity about $300 a month, so if can can beat
about $2100 total so we can pay for reg house bills, I think it's a
good plan right?
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> Well the idea is to pay the min while we pay other debt off, actually I
> am now working on combining a mortgage, equity loan, 12k cc, 20k car.
> Which would be just under the 228k anyway. Car payment is $500, cc
> $160, Mortage $1100, Equity about $300 a month, so if can can beat
> about $2100 total so we can pay for reg house bills, I think it's a
> good plan right?
As the previous poster has indicated, the fully amortized payment
(based upon a 30 year fixed mortgage) for a 228,000 loan @ 6.22% is
1399.39 per month. An interest only payment on the same loan/same
interest rate is 1181.xx per month.
Paying the min. payment you have indicated (624/month) would create
what is called negative amortization or deferred interest. The
difference between the interest only payment and the min. payment would
be added to the loan amount in month 1, and subsequent months' payments
would be recalculated for the added principal to the loan amount and so
on. This particular loan program creates 557.80/month or 6693.xx/year
of deferred interest. If you continue to make min. payments your loan
value will exceed the appraised value, and your loan will need to be
recast (payment recalculation).
These loan types (and they go by many aliases; pay option, option ARM,
pick a payment, etc.) are the most complicated loan programs on the
market, and it is important to understand not only the benefits, but
the consequences.
I don't have a problem with these loans; I have a problem with the lack
of education being provided to borrowers by some lenders.
Regards,
Scott Miller
National Commercial and Residential Lender/Broker
1.877.716.6495
EZMortgageLoanz@aol.com or hugh.miller@carteretmortgage.com
www.RealEstate-IQ.com
www.EZMortgageLoanz.com
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| Dazzler 2006-04-16, 1:21 pm |
| Well I just have to figure out the right payment we need to pay in
order to pay these off in 30 years or whatever. I mean whatever money
we don't spend at the end of the month could always be paid on this
super mortgage loan. Since we only bring in about 45k a year since
they are retired.
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| If you are retired and over the age of 62, you might want to consider a
reverse mortgage.
A total household income of 45K per year could be qualified for a loan
amount between 155K-160K if using a 30 year fixed loan @ 6.25%.
Conversely, a total household income of approx. 65K would be required
to support a 228K @ 6.25%.
If you are both retired living on a fixed income, this type of loan
with a scheduled payment shock in either 5 to 10 years and not
advisable unless you either expect an increase in income, intend to
refinance before the adjustment period or intend to sell the property
before the loan adjusts.
Regards,
Scott Miller
National Commercial and Residential Lender/Broker
1.877.716.6495
EZMortgageLoanz@aol.com
www.RealEstate-IQ.com
www.EZMortgageLoanz.com
Dazzler wrote:
> Well I just have to figure out the right payment we need to pay in
> order to pay these off in 30 years or whatever. I mean whatever money
> we don't spend at the end of the month could always be paid on this
> super mortgage loan. Since we only bring in about 45k a year since
> they are retired.
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