Is it better to get a conforming loan plus 2nd trust or to get one “mini jumbo” loan?
Posted in Renting & Real Estate on 07/06/2009 07:49 pm by admin
savesomethingwild asked:
We are getting ready to purchase a home and will be borrowing $480k. We have called around to various lenders and have received conflicting advice. Is it better to:
1) get a conforming loan for the first $417 (today’s rate of 5.875%) and then get a second trust for the remaining $63k. And then for the second trust, should we do a home equity line of credit (only 5% now but could rise as economy improves) or an amortized second home loan at 7.5%
OR
2) just get one mortgage at the “mini jumbo” rate, which is only an eighth of of a percent higher (?) than the conforming loan rate.
We are getting ready to purchase a home and will be borrowing $480k. We have called around to various lenders and have received conflicting advice. Is it better to:
1) get a conforming loan for the first $417 (today’s rate of 5.875%) and then get a second trust for the remaining $63k. And then for the second trust, should we do a home equity line of credit (only 5% now but could rise as economy improves) or an amortized second home loan at 7.5%
OR
2) just get one mortgage at the “mini jumbo” rate, which is only an eighth of of a percent higher (?) than the conforming loan rate.
HELP! this is so confusing! Thank you
LYLE
07/09/2009 at 8:30 pm
ARON
1st you have to look at the time frame you may be in the home and understand that the average mortgage in the US only last 5-7 years. Secondly most “mini-Jumbo” loans are much higher in an interest rate than 1/8th of a percent. I would suggest you only use a bank and not a broker. I would go with Wells Fargo doing a first loan at $417,000 and the 2nd as a HELOC. Even though the 3nd mortgage is adjustable, the likelyhood of prime rate going up anytime soon is next to none. Also with Wells Fargo you can lock in portions of your ewuity line at any time into fixed rate loans if rates do start to go up. If you need a recommendation of who to use in your area please email me.