Countrywide FlexSaver Mortgage
I have been researching mortgages for investments (and my own home). There is a program from Countrywide called FlexSaver. Basically it is a ARM, 25 year. The first 10 years you can pay interest only or as much as you want and if you need some extra cash it is also a HELOC. Then the last 15 years you pay like a regular ARM 15 year mortgage on the balance.
The rate is 4.25. The broker said this is a good program for both investments and my personal home. He said that prime does not change that often. I looked it up and they say it cant go above 11.5%. Anyway, I have never done an adjustable before.
Right now we are only getting about $90 a month applied to our principle, if we do this we will be putting about $210 toward our principle. (We still have about 25 years on our original that is 7.5%)
It sounds good, but I wonder if I am missing something since I really am new to all of this.
We do qualify for convetional mortgages as well.
One other thing, I think 2% is too much to pay the broker, I am going to ask for a discount in their fee.
Do any of you use these types of programs in your investing? Thanks for any advice.
KIM :-D
I will say that 2% is way too much to pay a broker for a loan that you can get yourself simply by going to Countrywide's website or calling one of their own local reps (also listed on their website) directly and dealing with them.
Roger
The PRIME rate is still at record lows, however it is widely expected to increase over the next couple of years. In fact, it was just increased by .25 last month.
Since 4.25 is the prime rate, it is unlikely the broker is making any back-end money to be getting paid from the lender. That is probably why he/she is charging 2%. That 2% is a tax write off for you. However, in this case, saving $210 a month may not really justify paying that type of closing costs. That's up to you to decide. Personally, I don't think I'd get into anything tied to prime right now unless it's for the short term and/or I was really going to put a lot of money towards the principal. You might want to find out if they have some kind of Interest only that is tied to the LIBOR and is fixed for a 3 or 5 year period. At 7.5 on your current mtg., you might even want to consider a 20 year fixed or 15 year, if you can swing the payments. It would be a substantial savings to you in the long run. Good luck.
WAchovia has a great investor loan. There is a 12 month seasoning. I also do full docs and have good credit. It is a program that has equity in the name. Good thing is there is no PMI.
Good for purchase or refi.
Can not remember all the details, call up a Wachovia rep.
Brenda
Less than 4 years ago, prime was at 9%... Also, if I understand your email correctly, your current loan is ammortized over 30 years. After the first 10, this loan then becomes a 15 year note. Your payment will be significantly higher if this is the case. Of course, that is if you stay in the house, and do not refi. The average length on mortgages has dropped to within 5 years, so perhaps it isn't that bad of a loan.
Another idea would be to get a heloc tied to prime, with an interest only option from a bank? They usually don't have closing costs...
you most likely can't get the wholesale rates a broker can get. going straight to the lender gets you the standard consumer rates.
I would not go adjustable for a property I plan on holding over 5 years. Rumor has it that the interest rates will take a jump after the next election. Rates will move slowly until then so that we think we're doing well economically.
And as far as refinancing, unless your new rate is 2 or more percent lower, it might not make financial sense. With just about any mortgage you can make additional principal payments which will shorten the time required to pay it off....
A word of advice though.... I've heard that often mortgage companies apply the extra principal to the escrow account, so you must check your statements to make sure it's applied to principal... this is crucial. Imagine what a nightmare it would be if your loan got sold and you found out payments were not applied correctly by the old company.... :-x