[Raybyrnes]

I have an opinion on the matter but what do most people think the difference would be if you took a 10 year. Fixed rate, IO loan and just elected to make payments as if it were a 30 year fixed. Proviced you are not paying any additional cost for the option of doing this why wouldn’t you.

Now you need to ask yourself am I more comfortable with a guaranteed rate of return of 6% or do I feel I can invest the difference and earn a higher rate of return.

I tend to think the IO invest the difference makes sense for me. The same thing is true of life insurance, Buy term invest the diffence. Automatic investments into index mutual funds tend to eliminate teh time it would take without haeing this as an option

[Raybyrnes]

Yeah, Coming from the guy asking if a mortgage guy is paid a commission. Get a clue. Additionally if your creit was pulled months before why would you waste your time talking to this guy. If you were approved the first time you should have already known what you were eligible for.

[Raybyrnes]

Yeah, Coming from the guy asking if a mortgage guy is paid a commission. Get a clue. Additionally if your creit was pulled months before why would you waste your time talking to this guy. If you were approved the first time you should have already known what you were eligible for.

[Raybyrnes]

no_such_reality

You are right on the money. This might have well been coffee room chatter because both broker, and alex were wasting time. Without a credit check there is no way of knowing what type of loan program you were eligible for. Additionally why would you waste time even talking to a mortgage guy about a 1 million dollar home if you know in advance that this is not something you could afford. I tend to think buyers are better off taking a moment and spending 1 hour on the internet and going through a couple of realistic calculations on what might be affordable. From there it is fairly simple to ask about a couple of programs and a decent professional should be able to provide you with an idea as to whether something is feasible. Stupid questions like what are your interest rates or points or payments are fairly meaningless until a credit check is run. Anyone can tell you a best case scenario but it is credit and underwriting that will determine final eligibility. Anyone asking these type of premature questions are inviting unscroupulous practices and bait and switch tactics.

[Raybyrnes]

no_such_reality

You are right on the money. This might have well been coffee room chatter because both broker, and alex were wasting time. Without a credit check there is no way of knowing what type of loan program you were eligible for. Additionally why would you waste time even talking to a mortgage guy about a 1 million dollar home if you know in advance that this is not something you could afford. I tend to think buyers are better off taking a moment and spending 1 hour on the internet and going through a couple of realistic calculations on what might be affordable. From there it is fairly simple to ask about a couple of programs and a decent professional should be able to provide you with an idea as to whether something is feasible. Stupid questions like what are your interest rates or points or payments are fairly meaningless until a credit check is run. Anyone can tell you a best case scenario but it is credit and underwriting that will determine final eligibility. Anyone asking these type of premature questions are inviting unscroupulous practices and bait and switch tactics.

[Raybyrnes]

recordsclerk

To improve on the situation Charles Schwab is now offering 4.25% on checking accounts and there MMA are paying 5% if you are not already taking advantage of this. You can sweep money from the checking into the brokerage money market accounts. Not that you want to keep much money in your checking account but it seems to be a good way of making your money work for you. I am still playing around with it. 4.75 and 3.75. That is cheep money. Well done.

[Raybyrnes]

recordsclerk

To improve on the situation Charles Schwab is now offering 4.25% on checking accounts and there MMA are paying 5% if you are not already taking advantage of this. You can sweep money from the checking into the brokerage money market accounts. Not that you want to keep much money in your checking account but it seems to be a good way of making your money work for you. I am still playing around with it. 4.75 and 3.75. That is cheep money. Well done.

[Raybyrnes]

Are there any feelings as to the impact Democrate or Republicans might have with respect to handling a shousing downturn. During the 80’s it was Reagan who did the dirty doublecross to land homeowners. I would think that Republican will do everything they can to keep the economy going so that they can campaign on this. Homeownership up and 401k’s booming. No need to think about the soldiers in Iraq.

Additionally you are still seeing cheap money. http://www.calhfa.ca.gov. 40 year,fixed rate, 10year IO loans, 3% down, at 6%. Seem like there are already sign of the Governemtn stepping in tohelp out. People thought on whether the governemtn might just prolong this long.

[Raybyrnes]

Are there any feelings as to the impact Democrate or Republicans might have with respect to handling a shousing downturn. During the 80’s it was Reagan who did the dirty doublecross to land homeowners. I would think that Republican will do everything they can to keep the economy going so that they can campaign on this. Homeownership up and 401k’s booming. No need to think about the soldiers in Iraq.

Additionally you are still seeing cheap money. http://www.calhfa.ca.gov. 40 year,fixed rate, 10year IO loans, 3% down, at 6%. Seem like there are already sign of the Governemtn stepping in tohelp out. People thought on whether the governemtn might just prolong this long.

[Raybyrnes]

Great Credit will benefit because banks base portfolios and reserves on the average credit of the overall portfolio. They are willing to give money away to people with great credit so that they can make riskier and more profitable loasn to those with more marginal credit. This is one of the reasons that credit card companies benefit from the 0% client. 1 they make money from the merchant procesing fees but 2 they are able to offer higher interest rate cards to borrowers while maintaining a respectable avaerage risk for their portfolio. Some have compared this strategy to a barbell.

[Raybyrnes]

Great Credit will benefit because banks base portfolios and reserves on the average credit of the overall portfolio. They are willing to give money away to people with great credit so that they can make riskier and more profitable loasn to those with more marginal credit. This is one of the reasons that credit card companies benefit from the 0% client. 1 they make money from the merchant procesing fees but 2 they are able to offer higher interest rate cards to borrowers while maintaining a respectable avaerage risk for their portfolio. Some have compared this strategy to a barbell.

[Raybyrnes]

SD Cellar

I am probably in your camp more than you think. I am all for 100% financing if and only if I have that money sitting in an account and it simply becomes a point where the bank or lender is giving it away. This doesn’t happen often but it happens. Otherwise I am not going to recommend going a 100% just to get into something. That would not be my recommendation.

Here is the flip side to the equasion. IF you had 100K invested in a variety of investments would you go and liquidate all investments just to avoid having to borrow. Again you would probably say it sort of depends on what I am earning on my investment and what the bank is going to charge me.

[Raybyrnes]

SD Cellar

I am probably in your camp more than you think. I am all for 100% financing if and only if I have that money sitting in an account and it simply becomes a point where the bank or lender is giving it away. This doesn’t happen often but it happens. Otherwise I am not going to recommend going a 100% just to get into something. That would not be my recommendation.

Here is the flip side to the equasion. IF you had 100K invested in a variety of investments would you go and liquidate all investments just to avoid having to borrow. Again you would probably say it sort of depends on what I am earning on my investment and what the bank is going to charge me.

[Raybyrnes]

The HELOC have the smae characteristics as my student loans. I jsut tried to use something that I efffectively used as you had asked.

I am certain there are more than a few people who had much lower rate on equity lines from 2004 and 2005. I am certain that many of them are in a similiar positon to my student loan example. If we were to go into an infaltionary period and saw interest rates rise than CD would carry a much higher rate of interest as well as muni bonds etc.

Bottom line is I understand what you are saying. You don’t see a significant advantage to the carrying cost of borrowing. Do I understand you?

[Raybyrnes]

The HELOC have the smae characteristics as my student loans. I jsut tried to use something that I efffectively used as you had asked.

I am certain there are more than a few people who had much lower rate on equity lines from 2004 and 2005. I am certain that many of them are in a similiar positon to my student loan example. If we were to go into an infaltionary period and saw interest rates rise than CD would carry a much higher rate of interest as well as muni bonds etc.

Bottom line is I understand what you are saying. You don’t see a significant advantage to the carrying cost of borrowing. Do I understand you?

[Author]

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