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  • May 21, 2007 at 8:24 AM #54067
    Alex_angel
    Participant

    I haven’t bought but after speaking to a mortgage lender this was a second option. I can put down anywhere from 5-10% of the home but that would still require a 80/15/5 type loan. For the second loan it was mentioned a HELOC can be used or I can get into a fixed rate. The benefit of the HELOC is that if I do pay it down that credit is available if I ever had a need for a huge amount of cash in an emergency. The drawback is the chaning interest rate.

    May 21, 2007 at 8:54 AM #54068
    NotCranky
    Participant

    Alex,regardless of the loan you get you are not going to have much equity to draw on for a long time. This is true for two reasons, First you barely make a dent in your principal at all in the first several years of a mortgage. Second unless you find that one in a million house that is actually appreciating right now you will be upside down on the house faster than the ink dries on the loan documents. If you buy and you probably should not, I would suggest going with the loan that affects your cash flow the least that also does not leave you at risk of unpredictable trends in mortgage rates going forward. If you already have 10% down and the market keeps falling on the house you want, every day you have a higher percentage down! Why don’t you keep saving? Maybe you will have 20% down sooner than you think!At that point you could chose to put 5%-10% down if you want and won’t have to rely on the questionalble possibility of appreciation for your emergency fund.
    Best wishes

    May 21, 2007 at 8:54 AM #54079
    NotCranky
    Participant

    Alex,regardless of the loan you get you are not going to have much equity to draw on for a long time. This is true for two reasons, First you barely make a dent in your principal at all in the first several years of a mortgage. Second unless you find that one in a million house that is actually appreciating right now you will be upside down on the house faster than the ink dries on the loan documents. If you buy and you probably should not, I would suggest going with the loan that affects your cash flow the least that also does not leave you at risk of unpredictable trends in mortgage rates going forward. If you already have 10% down and the market keeps falling on the house you want, every day you have a higher percentage down! Why don’t you keep saving? Maybe you will have 20% down sooner than you think!At that point you could chose to put 5%-10% down if you want and won’t have to rely on the questionalble possibility of appreciation for your emergency fund.
    Best wishes

    May 21, 2007 at 1:52 PM #54155
    sdcellar
    Participant

    Alex– How about some more details (assuming you’re comfortable with such)?

    It definitely sounds like you’d be stretching yourself to get into a place and I’m kinda curious why anyone would do that right now (including you).

    Perhaps you have great income, but nothing much for a down payment? I’d still go with what Rustico said: save, save, save…

    On the mechanics, yes, you can definitely go 80/10/10 (or 80/8.2/11.8 or whatever flavor you like [and a lender approves]).

    May 21, 2007 at 1:52 PM #54168
    sdcellar
    Participant

    Alex– How about some more details (assuming you’re comfortable with such)?

    It definitely sounds like you’d be stretching yourself to get into a place and I’m kinda curious why anyone would do that right now (including you).

    Perhaps you have great income, but nothing much for a down payment? I’d still go with what Rustico said: save, save, save…

    On the mechanics, yes, you can definitely go 80/10/10 (or 80/8.2/11.8 or whatever flavor you like [and a lender approves]).

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