<chilangopolaco@[EMAIL PROTECTED]
> wrote
>I am planning to take 7 yr ARM mortgage (conforming:
>similar to 30yr
> fixed for the first 7yr years). I think I am not going to
> stay in my
> home longer than that. Would you please help me compare 2
> different
> mortgages ?
>
> Selling price 255K
>
> 1) No-fee mortgage from Bank of America:
> They pay for closing cost and survey (part of the
> program). I have
> locked the rate at 6.25 which means that 7 yr ARM would go
> for 5.625
> (~0 points). I need to pay 5% down ($12750) and I am not
> going to pay
> PMI. (part of the program - even with 5% down).
"the program"?
> 2) Wholesale countrywide program offered thru some broker
> 7 yr ARM, 0% down, rate locked at 5.125 with CW. As I
> wanted "lender's
> paid PMI" my rate jumped to 6%. So my PI = 1528, (I= $83,
> T =$ 433,
> PITI = $2044). Cost of brokerage + closing = 3.5K
Aside: Why is it this person does not have to pay any PMI?
Isn't this part of what led to the (now burst) bubble in the
first place?
> instead of building equity
> that might eva****ate, perhaps I should use some of that
> downpayment
> to update the house (1978 yr, located in prime Austin
> neighborhood,
> however dated but clean)
If the bubble bursts in Austin, then regardless of what
improvements you make a certain amount of equity will
eva****ate, and you will take a loss.
You are not ready for a house for two reasons: (1) You do
not have 20% to put down; and (2) you do not intend to stay
in the house very long.
Rent. Save your money for that 20%. Get command of your
overall financial situation. I would be real curious as to
whether you have an emergency fund. Any other debts like
student loans and cars?
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