From: "richard flores" <12thst@bellsouth.net>
Newsgroups: alt.org.natl-assn-mortgage-brokers
Subject: Re: Loan Options
Date: Fri, 17 Oct 2003 01:41:55 -0400

nice tip, thanks

"Jeff Strickland"  wrote in message
news:volied98fr82f7@corp.supernews.com...
>
> "richard flores" <12thst@bellsouth.net> wrote in message
> news:Ij%hb.3282$JE4.2725@bignews4.bellsouth.net...
> >
> > Which solution would be more appealing on these two mortgages?
> >
> > Option 1:
> > Take a loan for 95% at 180,500 @ 5.75 and PMI of $117.33 per month.
> >
> The loan payment, principle and interest, is 1053.35. Add the PMI, and the
> payment is 1170.68. The PMI is not tax deductable.
>
>
>
>
> > Option 2:
> > 80/15/5
> > Finance 80% or $152,000 at 5.75% and the other 15% ($28,000) at 7% fixed
> and
> > ammortized over fifteen years. No PMI
> >
> The proposed 1st gives a payment (P & I) of 887.03, and the 2nd gives a
> payment of 251.67, added together the total payment is 1138.70. You save
> 31.98 per month with this plan, AND the interest on the 2nd is tax
> deductable. This gives you nearly $600 per year in tax deductions.
>
>
>
>
> > (Also, should I get a fixed rate on the 15% loan or a Home Equity line
of
> > credit?)
> >
> Get the Fixed. The HELOC is an adjustable that can easily exceed the 7%
rate
> that you are getting today. The HELOC is better suited to loans where you
> need "working capital". Lets say you had been in the house for a few years
> and wanted to buy a new car. You could use a HELOC to buy the car and get
a
> tax deduction because the loan is tied to the property instead of the
> vehicle. You pay the loan back, then decide you want to take a trip. Write
a
> check against the HELOC, and pay it back at a lower rate than the credid
> card companies will give. Maybe you need a new kitchen, the HELOC will get
> it installed.
>
> In your situation, you will be using 100% of the HELOC on the very first
> day, and a typical HELOC borrower will use a portion of the loan on the
> first day, and keep the remaining portion in loan reserve until the need
for
> the funds arises. In a HELOC, you only pay interest on the portin of the
> funds that you have actually spent, on a Home Equity Loan (2nd), you will
> get the full amount of the funds immediately, and pay interest on the
entire
> amount, even if you have not physically spent it yet.
>