Fixed Mortgage

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You can refinance, but there are costs involved similar to the ones you had when you got the original mortgage.

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The total of Principal and Interest should always be the same on a fixed rate loan. However, with every single payment you should see the amount for interest decrease slightly and the amount for principal increase slightly. Your final payment will be almost all principal.

Good luck!

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With mortgage rates hovering around 4.35% for a 30yr mortgage, and 3.75% for a 15 year fixed, the rate does vary. However, there are vast differences in monthly costs, and overal costs when comparing the two. For example:

$300,000 mortgage, not including property taxes and mortgage insurance would cost the following.

30 yr mortgage at 4.35% would be $1493.44 and cost a total of $537,636 over 30 years.
15 yr mortgage at 3.75% would be $2181.67 and cost a total of $392,700 ove 15 years.

A 15 year mortgage would cost 50% more in this example monthly. Here is a financial trick.

If you make 1/2 of your mortgage payment every 2 weeks, you will end up making an extra monthly payment every year, which goes to principle. This will reduce your 30yr mortgage to a 25 year mortgage, saving you 5 years of mortgage payments, and give you $65,000 in savings, without doing much extra. This will allow you to have a lower monthly payment, while still paying off the mortgage early.

Daniel Klein is the CEO of InterCapital Group, a real estate, finance and consulting firm which helps clients better understand financial concepts, and real estate. 949-439-7808

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1) To shop rates, I highly recommend bankrate.com.
2) An 80-10-10 may be a viable option. But compare the total payments and cost for a 90% loan with PMI versus the payments and cost for the combination 80%/10% loans without PMI. Don’t automatically assume the later is cheaper – it may not be.
3) PMI will be required on any loan over an 80% LTV. The 80-10-10 is specifically sought after to avoid PMI.
4) Try lendingtree.com. – you enter your info, and then have at least 3-4 lenders competing for your business. But shop the rates ahead of time just to make sure they’re competitive.

Good luck.

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You need to be very careful with an adjustable rate mortgage. Not all of them have a set cap on how high the rate can go. Unless you can afford the higher rate now, you are better off with the fixed rate mortgage. For the majority of home-buyers today the fixed rate mortgage is best. Find a good loan officer in your area and ask what loan programs are available. There are lots of places you can go for advice. Here are a few good ones.

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That used to be pretty common when housing prices were going up. Lenders figured that, with pricing going up so fast, the house would soon be worth the amount of the mortgage plus the closing costs.

These days, lenders won’t agree to do that, because housing prices are still falling. In fact, they sometimes don’t give you the full appraisal value when determining the loan amount these days, assuming that prices may still continue to fall.

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The best payment option depends on your personal situation in life. If you can afford it, the 15 year payment means you’ll be paying far less interest to the bank in the end. The 30 year fixed payment is the most common. The other two situations (interest only and minimum payment) are for people in a desperate situation and are there to prevent foreclosure on the home.