Home Refinance

[playboys]

Better lender in current market?

Arm is better now?

Currently paying 5.6

[Thokkalee]

3 hours ago, playboys said:

Better lender in current market?

Arm is better now?

Currently paying 5.6

Ee time lo refinance endi vayaa?? ARM loans are very expensive though the APR number looks small.. consider the loan cost (incl interest) and not just the APR %… after the initial term, ARM loans cost you a lot as they increase the rates every 1 yr or 6 months.. 

If you refinance, you will start paying interest again on the outstanding amount.. 

[playboys]

4 hours ago, Thokkalee said:

Ee time lo refinance endi vayaa?? ARM loans are very expensive though the APR number looks small.. consider the loan cost (incl interest) and not just the APR %… after the initial term, ARM loans cost you a lot as they increase the rates every 1 yr or 6 months.. 

If you refinance, you will start paying interest again on the outstanding amount.. 

So need to wait until fed decrease the rates?

[Thokkalee]

1 hour ago, playboys said:

So need to wait until fed decrease the rates?

Yes… ARM loans are for people who plan to sell their homes after the initial term (5 Or 7yrs).. if you plan to keep the house, go only for fixed rate loans even though they are bit high.. the total cost of the loan is less for fixed rate loans compared to ARM loans

[playboys]

2 hours ago, Thokkalee said:

Yes… ARM loans are for people who plan to sell their homes after the initial term (5 Or 7yrs).. if you plan to keep the house, go only for fixed rate loans even though they are bit high.. the total cost of the loan is less for fixed rate loans compared to ARM loans

Thanks

[Thokkalee]

2 hours ago, Thokkalee said:

Yes… ARM loans are for people who plan to sell their homes after the initial term (5 Or 7yrs).. if you plan to keep the house, go only for fixed rate loans even though they are bit high.. the total cost of the loan is less for fixed rate loans compared to ARM loans

@Vaampire Bro, did I say anything wrong? Asking as I don’t want to give wrong advice. 

[Vaampire]

Just now, Thokkalee said:

@Vaampire Bro, did I say anything wrong? Asking as I don’t want to give wrong advice. 

U can always refinance the home any time. 5/7 arm thisukoni eppudu Kavali antey appudu refinance chesukovachu. I don't understand how u end up paying more interesting.

Imo, 30years fixed is a joke. How can someone be so sure that they are going to live in that house for 30yrs?

[Thokkalee]

7 minutes ago, Vaampire said:

U can always refinance the home any time. 5/7 arm thisukoni eppudu Kavali antey appudu refinance chesukovachu. I don't understand how u end up paying more interesting.

Imo, 30years fixed is a joke. How can someone be so sure that they are going to live in that house for 30yrs?

Here is my take on this.. on any loan, you pay mostly interest in the first 5-7 yrs. You pay 70% of the interest in that period and very less principal. On a 500K loan, if you paid 70K principal in the first 5 years, the remaining principal is 430K.. when you refinance the loan, you are taking a loan on that 430K. You will start paying interest on that loan again afresh. They will charge you fresh interest on the outstanding amount. The total interest you pay on the loan is much higher than what you pay if you don’t refinance. This will work only if the rates fall drastically like it did in the 2-4 yrs back.. 

[kasi]

5 hours ago, playboys said:

So need to wait until fed decrease the rates?

[kasi]

1 hour ago, Thokkalee said:

Here is my take on this.. on any loan, you pay mostly interest in the first 5-7 yrs. You pay 70% of the interest in that period and very less principal. On a 500K loan, if you paid 70K principal in the first 5 years, the remaining principal is 430K.. when you refinance the loan, you are taking a loan on that 430K. You will start paying interest on that loan again afresh. They will charge you fresh interest on the outstanding amount. The total interest you pay on the loan is much higher than what you pay if you don’t refinance. This will work only if the rates fall drastically like it did in the 2-4 yrs back.. 

very well put together......many people dont do research like you do bro.......

i see people refinancing after 5/7 yrs with a delta of 1-1.5% and thinking of being super smart and walking with pride, ranting about it every where they go  

[Thokkalee]

4 minutes ago, kasi said:

very well put together......many people dont do research like you do bro.......

i see people refinancing after 5/7 yrs with a delta of 1-1.5% and thinking of being super smart and walking with pride, ranting about it every where they go  

Yeah.. the lenders don’t educate them as they lose the commissions.. we have to look at the total cost of the loan (for the total duration) instead of just the APR %.. whenever someone refinances, they get lot of commission.. and builders have an incentive in selling the ARM loans.