Loan Consolidation Question
Q: I was handed a copy of your article in the LA Times concerning mortgages that was entitled, "Adjustable or Fixed Rate - It's Your Call".
I have a $62,000 first mortgage at 7.125% and a $40,000 second mortgage at Prime. I was thinking of refinancing and consolidating the two loans into one loan from World Saving.
They claim that they are a true bi-weekly amortizing loan that has a start pay rate of approximately 3% and a start Note rate of approximately 6%. Because it is bi-weekly, I would be making 26 payments per year. Each year, the bi-weekly payment cannot increase by more than 7.5%. There is a chance of negative amortization but the illustration/projection that they provided me shows a maximum negative amortization of only 2% of the principal balance. After a couple of years, the negative amortization disappears and the loan actually pays off i.e. fully amortizes by the 24th year. Do you know anyone that has used this bi-weekly product? In a period of low interest rates does it matter that I would be choosing an ARM vs. a fixed rate? Any further thoughts on World Savings? Thank you in advance for your advice.
A: You can achieve the exact same rate of return (or better) by doing it yourself. With your regular monthly payment, simply add 1/12 onto the mortgage (attach the difference as a separate check marked "PAY DOWN BALANCE"). If you do this starting with the first payment, you will cut your 30-year mortgage to 21-22 years. And, it's free. You won't pay anyone a set up fee or anything.
Buying a House with Bad Credit
How To Raise Credit Score To Prepare For Mortgage
Creditors "Charged Off" Credit Account
Federal Stafford Loans
Credit History
Link to This Article
Like what you've read? Spread the word! You can link to this article
from your website by copying the following code and adding it to
a page on your website:
Copyright ©2001-2007. ThinkGlink, Inc.
All rights reserved. Reproduction of material from any www.ThinkGlink.com pages without permission is strictly prohibited.
Site designed by Walker Sands Communications
