10/1 ARM vs. Fixed Rate

[Complex]

6 hours ago, LadiesTailor said:

No bro.. only Austin batch refi chestara enti 😜😜

ledhu anna, urike adiga

[Thokkalee]

21 hours ago, cameraman said:

It is around 1% less in 10 year ARM. No link available, it's from credit union near me.

Check with penfed or dcu… they should have better rates than local credit unions 

[cameraman]

On 11/8/2022 at 5:23 PM, Thokkalee said:

Check with penfed or dcu… they should have better rates than local credit unions 

Suggest me more lenders.

Heard some lenders now providing no PMI even with less than 20% down.

[Thokkalee]

12 minutes ago, cameraman said:

Suggest me more lenders.

Heard some lenders now providing no PMI even with less than 20% down.

Really? I really doubt it.. how will a lender give you a risky loan without insurance?? 

[cameraman]

3 minutes ago, Thokkalee said:

Really? I really doubt it.. how will a lender give you a risky loan without insurance?? 

Yes, friend went with southstate recently , with 10% down they avoid PMI. But this bank provides loan in few states not all. 

https://southstatebank.com/

[IamBhagatSingh]

On 11/7/2022 at 2:49 PM, Complex said:

fixed rate tho same amount of monthly payment for the next 30 years, no matter how market rate is. No surprises. 

ARM tho , 10 years varaki fixed after that let' s say on 11th year rate has increased , it will make your monthly payments higher automatically.

 

ARM only works out , if you can refinance to lower rate.  Ma relative took  7/1 ARM  long back , it worked out for him as he was able to refinance to a lower rate.

 

 

Let's say if we took 7/1 arm, do we need to wait for 7 years to refinance or can do in the middle also? 

Also if we want to refinance with lower interest rate, the fees will be very high? 

[Anta Assamey]

2 minutes ago, IamBhagatSingh said:

Let's say if we took 7/1 arm, do we need to wait for 7 years to refinance or can do in the middle also? 

Also if we want to refinance with lower interest rate, the fees will be very high? 

You can refinance anytime you want... In terms of the fee it is more or else the same...

[Thokkalee]

1 hour ago, IamBhagatSingh said:

Let's say if we took 7/1 arm, do we need to wait for 7 years to refinance or can do in the middle also? 

Also if we want to refinance with lower interest rate, the fees will be very high? 

Doesn’t matter what the loan term is.. you can refinance anytime you want.. you basically take a new loan on the outstanding balance and pay off the old lender.. 

[IamBhagatSingh]

2 hours ago, Anta Assamey said:

You can refinance anytime you want... In terms of the fee it is more or else the same...

 

1 hour ago, Thokkalee said:

Doesn’t matter what the loan term is.. you can refinance anytime you want.. you basically take a new loan on the outstanding balance and pay off the old lender.. 

Got you. Idey fixed interest rate itey we cannot refinance ah? 

[Thokkalee]

13 minutes ago, IamBhagatSingh said:

 

Got you. Idey fixed interest rate itey we cannot refinance ah? 

Doesn’t matter what type of loan it is.. you can always refinance…. But you have to consider the cost of refinancing as it costs a lot.. and you might have paid lot of interest already on the loan and you will start paying the interest again and you also reset the loan term.. 

[Anta Assamey]

2 hours ago, IamBhagatSingh said:

 

Got you. Idey fixed interest rate itey we cannot refinance ah? 

Fixed aina refinance cheyachu.... any type lo loan you can....but just remember you will be paying the closing cost every time you refinance..

[macha]

Do not ever take refinancing even your current interest rate is 6% and at the time it is 4%… for any type of interest you will be starting to pay 99% of interest and rest is principal your monthly payments this will go down gradually so if you refinance you will start from scratch again paying interest more and less principle…see you can take heloc and pay of your principal and get out of debt fast

[IamBhagatSingh]

16 hours ago, Thokkalee said:

Doesn’t matter what type of loan it is.. you can always refinance…. But you have to consider the cost of refinancing as it costs a lot.. and you might have paid lot of interest already on the loan and you will start paying the interest again and you also reset the loan term.. 

 

45 minutes ago, macha said:

Do not ever take refinancing even your current interest rate is 6% and at the time it is 4%… for any type of interest you will be starting to pay 99% of interest and rest is principal your monthly payments this will go down gradually so if you refinance you will start from scratch again paying interest more and less principle…see you can take heloc and pay of your principal and get out of debt fast

Help me understand. Let's say we have taken 100k loan with 5% interest. 

So monthly bank will charge interest of 500$. They won't charge more than that, anything more you pay goes to principal. If we are there with that bank for 1 year by  paying interest(500$) + principal (500$) we would have paid 12000$. 

Now  if we moved to different bank for refinancing, wont we owe only 100k-6k=94k? 

So how does it matter? 

[IamBhagatSingh]

14 hours ago, Anta Assamey said:

Fixed aina refinance cheyachu.... any type lo loan you can....but just remember you will be paying the closing cost every time you refinance..

Usually how much will be the closing cost? 

[macha]

23 minutes ago, IamBhagatSingh said:

 

Help me understand. Let's say we have taken 100k loan with 5% interest. 

So monthly bank will charge interest of 500$. They won't charge more than that, anything more you pay goes to principal. If we are there with that bank for 1 year by  paying interest(500$) + principal (500$) we would have paid 12000$. 

Now  if we moved to different bank for refinancing, wont we owe only 100k-6k=94k? 

So how does it matter? 

No that’s not how it works look at this image and you can use any mortgage calculator to see https://ibb.co/st0smcZ for your example 100k  initial you pay $333 interest and $194  to your principal over the time gradually you will contribute more towards principal and less to interest… banks want to make money first