It'll Cost You An ARM...
I was wondering if I were to use an ARM, what costs I might come across. I thought ARMs were typically cheaper to close on than fixed mortgages. Is this true? Can someone explain?
[addsig]
The costs that are incurred in a loan are as follows:
Bank fees: They will depend on what type of bank. All banks have different fees.
Broker fee: These will be incurred if using a broker
Title fees: These will depend on what state you are in. Every state has a different setup
The loan type may permit you to have fewer or no endorsements, Title regulations, ect.
Actually an arm mortgage note has more pages than a fixed note. Because they usually have a ryder on it. Which wuold mean if you are being charged by the page to record it would be more.
Another thing that reduces costs in a loan is the LTV you are requesting. Anything lower than 50% is the lowest, then 70% and under. 71% to 79%-80%
81% to 89.9%, 90% to 94.9%, 95% to 97,
then 100%, 103% 107%,115%, and 125%.
They mostly affect costs on a loan. the more equity you are using the more it will cost you.
Neg am, interest only, libor mortgages are run about the same for fees. There might be one bank a little better but nothing major.
Lori
Lori
[addsig]
rates are the lowest they've been in 40 years. Forget arms lock in this cheap money. Unless you're going to be out of the deal inside three years.
mark
Its a flip so yes.. I'll be out in short order
If you are going to flip make sure the arm doesn't have a prepayment penalty. Most arms do.
That is why the rate is lower
Lori
[addsig]
If you're going to flip you want the lowest payments possible.
In which case you want an interest only loan, or what some banks are calling a 1 month option ARM.
Washinton Mutual has one, with a current rate of 1.5%.
You also want to try rolling your closing costs into the loan.
Plus, make sure there are no prepayment penalties. Some banks charge 2%.
Ouch!
[addsig]