Comments on: Real Estate Nitty Gritty

By: GC

GC — Tue, 09 Jun 2009 19:14:15 +0000

now if only the rates on your savings accounts would go up at an alarming pace

By: 2million

2million — Tue, 09 Jun 2009 14:35:30 +0000

I would recommend locking in as soon as you can – if rates go up youll be glad you did. If rates go down you can withdraw your mortgage application and use a different mortgage broker if they are not willing to reset your rate.

By: FrugalBabe

FrugalBabe — Mon, 08 Jun 2009 21:04:55 +0000

JB,
We’ve been debating the 15 vs. 30 year mortgage decision for several months, for exactly the reason you mentioned. After adding in taxes and insurance, it was going to be roughly $1100 a month for the 30 year, and $1500 a month for the 15 year. Since we don’t have any other debts, and have enough liquid savings to cover several months of mortgage payments in a worst case scenario, we decided to go with the 15 year loan. It will save us half a percent in interest, and the payment could be made even with a relatively small income, since we don’t have any other debt obligations.
We did double check with the bank we’re using about pre-payment penalties, and they said that none of their loans have them. So all should be good there (we will check the fine print though).

By: JB

JB — Mon, 08 Jun 2009 20:46:12 +0000

Exciting! If it were me, though, I’d go for a regular 30 year mortgage (make sure there are no pre-payment penalties) and just pay extra on it every month. This way, if something were to happen to your jobs (heaven forbid) or other big expenses came up unexpectedly, you could drop down to the minimum payment. If you go with the 15 year mortgage, you are locked in at that higher monthly payment. Just a thought.