Ugh- Mortgage help

JENHOS Posted: Apr 30, 2003 02:08 PM

Ugh- Mortgage help

Are there any good sites to understanding mortagages? I don't get any of this stuff!!!

ddunne23 Posted: Apr 30, 2003 02:16 PM

Re: Ugh- Mortgage help

Hey Jen! Check out bankrate.com. They have a pretty comprehensive mortgage site listing today's rates along with some good articles to read.

JENHOS Posted: Apr 30, 2003 02:19 PM

Re: Ugh- Mortgage help

I will try that one. I feel like such a moron. Embarrassing that I am a VP at a major bank isn't it!!!! (thank god I work in the marketing dept )

ddunne23 Posted: Apr 30, 2003 02:23 PM

Re: Ugh- Mortgage help

I did so much research on this before we bought our house...even bought the book 'Buying or Selling a house for Dummies!' It was helpful and now I understand the mortgage world!

michele31 Posted: Apr 30, 2003 02:25 PM

Re: Ugh- Mortgage help

Why not post some of your questions. We may be able to help.

JENHOS Posted: Apr 30, 2003 03:09 PM

Re: Ugh- Mortgage help

Ok here goes. What exacly are points?

ddunne23 Posted: Apr 30, 2003 03:15 PM

Re: Ugh- Mortgage help

It is pretty much paying a flat fee up front for a lower mortage rate. Each point is equal to 1% of the cost of the home (I think that is it). So if an ad says the rate is 5.5% and 1 point, you need to pay that point at closing to get that 5.5% rate.

You can deduct points on your taxes the year you bought the house so that is a bonus. I suppose you just need to weigh the cost of the points versus the difference in interest you would pay between the rates with and w/o points.
So some people see it as advantageous to pay points since they see it as getting back that $$ at tax time.

We wound up getting an 5/1 Adjustable rate mortage for 4.5%, no points.

ILT1221 Posted: Apr 30, 2003 03:24 PM

Re: Ugh- Mortgage help

Okay another mortgage student here...

Are points still applicable if you put 20% down?

JENHOS Posted: Apr 30, 2003 03:29 PM

Re: Ugh- Mortgage help

Now Doreen does that mean that as the rates go up your mortgage rate will go up as well?

ddunne23 Posted: Apr 30, 2003 03:31 PM

Re: Ugh- Mortgage help

I am by no means an expert...but I don't think the % you put down has any bearing on points. Points are just a way for you to 'buy down' your mortage interest rate. But I am not really sure on that.

cluelessbride Posted: Apr 30, 2003 03:47 PM

Re: Ugh- Mortgage help

I read Mortgages for Dummies and it helped me understand the basics.

ddunne23 Posted: Apr 30, 2003 04:00 PM

Re: Ugh- Mortgage help

No..our mortage rate stays at 4.5% for 5 years. After that year it will adjust every year. For the length of the loan it can not fluctuate any more tha + or - 5%..so worst case scenario would be 9.5%. The reason we went with that type of mortage is that we don't plan to be in the house for more than 5 years, so it made no sense for us to lock into a fixed mortage at an interest rate of 5.75% which was the rate when we were applying. For those that plan to stay in their house for a long time then locking in at a fixed rate for the life of the loan is a great option especially at these rates. And if by chance we are still in that house in 5 years we can refinance and lock in again for another 5 years at current rates. Many people just assume that locking in for 30 years is the best bet, but why buy a 30 year product if you know you are only going to use it for 5 years? They also have 7 year adjustable mortages to...so it is fixed for the first seven years than adjusts on a yearly basis after that.

JENHOS Posted: Apr 30, 2003 04:04 PM

Re: Ugh- Mortgage help

I see....I am learning already. I just went down to the branch in my building in and we have a dedicated person who does just employee mortgages. I made an appointment. She said she will cover all the basics with me! Maybe I will get that book as well.

I will keep you posted.

Doreen you guys made out great and have a beautiful house!!

ddunne23 Posted: Apr 30, 2003 04:08 PM

Re: Ugh- Mortgage help

She will definately help clear things up. And the Dummies book is really great...it covers the whole process from agents to inspections to closing to moving in!