15 year jumbo interest only

User Forum Topic
Submitted by hammer on September 14, 2009 - 5:14am

I work in the commercial real estate world and a co-worker of mine just entered into escrow last week.

I saw his truth in lending document, and he locked an 80% loan for 1.1 million. 15 year interest only at 5.625%, with 3/4pt. I believe Union Bank of California is offering this loan. I apologize not having a link.

The UBOC Interest only 80% jumbo rates were

5 yr - 4.875
7ry - 5.25
10 yr 5.5
15 yr 5.625

It seems to me that the 15 year IO is a great loan.
I am not a buyer right now, but would love to hear some thoughts

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sounds like we have a
Submitted by patb on September 14, 2009 - 5:58am.

sounds like we have a hypester in the pool

That is an unfair comment.
Submitted by hammer on September 14, 2009 - 6:29am.

That is an unfair comment. Not hyping anything, just real live market info.

I felt the 15 year jumbo IO is an interesting product if one would rather save cash than pay down principle heading into some inflationary cycle in the future. The rate seemed pretty low...just looking for more knowledgeable opinion.

You have not given enough
Submitted by FormerSanDiegan on September 14, 2009 - 7:46am.

You have not given enough info to determine whether this is a good loan or not.

I've seen 3-, 5-, 7-, and 10-year IOs that convert to fully amortized loans for the remaining 15 years.

Does this 15-year IO loan convert to fully amortizing for 15 remaining years after the initial term or is the term longer ?

Is it a balloon ?

What is the margin, index, and cap ?

On the surface it sounds like a 15-year rent with an option to purchase (and sell) at any time before that.

I looked at the two-step
Submitted by FormerSanDiegan on September 14, 2009 - 7:50am.

I looked at the two-step mortgage on the UBOC web site.

It is a 40-year term.
15 years IO, then 25 years fully amortized.
There is a one-time adjustment at the end of 15 years, so it is fixed for the remainder.

I don;t see any info on what the adjustment is based on or whether there was a cap.

SDCCU is no longer doing
Submitted by waterboy on September 14, 2009 - 1:49pm.

SDCCU is no longer doing Jumbos. I know a lot of people who were doing the 3/1 & 5/1 40yr with amounts over $1MM. Might have finally figured out they had a lot of risk on their plate.

waterboy wrote:SDCCU is no
Submitted by UCGal on September 14, 2009 - 2:25pm.

waterboy wrote:
SDCCU is no longer doing Jumbos. I know a lot of people who were doing the 3/1 & 5/1 40yr with amounts over $1MM. Might have finally figured out they had a lot of risk on their plate.

wow - you're right... only loans up to $417k. (I just went and looked.)

Actually, as a depositor, I'm a bit relieved.

UCGal wrote:waterboy
Submitted by AN on September 14, 2009 - 2:46pm.

UCGal wrote:
waterboy wrote:
SDCCU is no longer doing Jumbos. I know a lot of people who were doing the 3/1 & 5/1 40yr with amounts over $1MM. Might have finally figured out they had a lot of risk on their plate.

wow - you're right... only loans up to $417k. (I just went and looked.)

Actually, as a depositor, I'm a bit relieved.


Not according to their site, http://www.sdccu.com/pages/rates/HomeLoa... At the very bottom of the PDF is the rates for loans up to $625k.

hammer wrote:That is an
Submitted by patb on September 14, 2009 - 6:54pm.

hammer wrote:
That is an unfair comment. Not hyping anything, just real live market info.

I felt the 15 year jumbo IO is an interesting product if one would rather save cash than pay down principle heading into some inflationary cycle in the future. The rate seemed pretty low...just looking for more knowledgeable opinion.

It's a whacky loan. It's only purpose is to allow people to speculate
on house prices and interest rates. It will explode and kill people
just in a longer period of time then a 5/25.

sorry, F^&k You. we've got a tsunamai of 5/25's going bad, and you
are hyping a 15/15 IO.

I have to agree ... If you
Submitted by AK on September 15, 2009 - 6:35am.

I have to agree ... If you want to rent a big expensive house long-term but you don't want the stigma of being a renter ... get an I/O jumbo from UBOC.

AN wrote:Not according to
Submitted by UCGal on September 15, 2009 - 8:21am.

AN wrote:
Not according to their site, http://www.sdccu.com/pages/rates/HomeLoa... At the very bottom of the PDF is the rates for loans up to $625k.

You're right... my bad.

Even though SDCCU will do
Submitted by waterboy on September 15, 2009 - 5:05pm.

Even though SDCCU will do $625k that isn't true jumbo...more like super conforming.

I assumed that a fixed rate
Submitted by hammer on September 15, 2009 - 9:14pm.

I assumed that a fixed rate 80% 1.1 million dollar loan would be north of 7%. Interesting choice at going fixed for 150 bps more than a 15 yr IO.

I am not hyping anything. Been a homeowner since 1997 and have a fixed rate mortgage. Just looking for opinion, not a d*ck