Starting with a 10-year fixed rate loan, in increments of five years to the benchmark 30-year loan. Price breaks are typically given on 10 & 15-year terms.
Key Benefits
- Lowest overall fixed mortgage rates in 45+ years
- No "surprises" with adjustments down the road
- Takes advantage of the entire mortgage market
- Simple, no non-sense availability
- 10, 15, 20, 25, 30, 40 & even 50 year amortized terms available
- We offer 30 year FIXED rate Interest Only loans too.
Pricing Hints
Mathematically...the lowest possible "rate" ALWAYS has the highest possible "costs"...period. If you receive the lowest possible rate, let's say 5.5% on a 30-yr and the "costs" to get that rate estimated at $6,800....how does that deal compare with a rate of 6.250% with estimated "costs" at $1,975? Let's do the math below.....
Let us assume that we have a $238,000 (Payoff or purchase price) and we want a 30-yr fixed loan. Our loan amount would have to be large enough to cover the estimated payoff (price) AND the "costs" will be financed in the loan amount (unless you are going to pay CASH for the "costs", which almost NEVER happens).
After a payoff estimate of $238,000 PLUS the "costs" of $6,800 are total loan amount needs to be $244,800. Now the P&I payment on $244,800 for 30 years at 5.5%is $1389.95. That is a nice payment.
Now compare that payment to a loan amount of $238,000 plus just $1,975 in "costs". We now finance $239,975 for 30 years at 6.250%. That payment is $1477.57 per month. "Wait, that payment is higher because the rate is too high!".........BUT......Is it?????
Now what is the TRUTH in what just happened. The difference in rate is a solid 0.750%. The difference in costs are $4,825 and the difference in payment is $78 per month.
Let's take the not so obvious. To "save" $78 a month for 30 years, you have to spend $4,825 MORE in "costs" ....as in your LOAN AMOUNT. Remember that one loan amount was $244,800 and one is $239,975. They are BOTH on 30 year loans so you WILL NOT pay one off before the other. How long do you need to "save" that $78 to pay-down AND makeup the difference of the EXTRA $4,825 you financed. =====$4,825 divided by $78 is 62 months of payments (or 5.125 years).
How long do you plan on living there?
More importantly...."how long do you plan on keeping this initial loan?"
Anything less than 5 years and you ARE NOT SAVING ONE SINGLE PENNY!
The lesson to be learned is DO NOT "buy-down" or accept the lowest rate you've ever heard unless you know for sure that you will be able to re-coup the costs involved in the long run.
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