Which physician loan would you choose?

[GastroMastro]

I have funds to cover 20% down payment if I wanted, so this is purely a financing question. For all of these options, there are no points.

1. 10% down, 7/1, 2.375%,

2. 0% down, 7/1, 2.72%

3. 5% down, 7/1, 2.6%

4. 10% down, 5/1, 2.25%

5. 10% down, 10/1, 2.5%

[jacoavlu]

2 is what i would do except you have to say what you would do w the cash that you otherwise would have used for down payment

[tylerjw12]

1

[Zaphod]

3

A little cushion in case it goes sideways for closing fees

[GastroMastro]

2 is what i would do except you have to say what you would do w the cash that you otherwise would have used for down payment

If I went with 0% down, my thoughts were to potentially still pay off that 5% down-equivalent within the first year. I mean, if I pay that 5% back that otherwise would have been a downpayment in short order, wouldn't it be nice to have a little more cash flow around time of closing/moving/furnishing? (ie, why give it all up right away) Again, I have the funds to pay 20% so i'm not trying to over-buy here, so it really is a pure financing-based discussion of the best lending terms

[VentAlarm]

6. It seems crazy right now to get a variable interest rate. I got a 30y fixed at 2.75% a few months ago through laurel road. The spread between fixed and variable is so low, that this is incredibly cheap insurance.

[GastroMastro]

6. It seems crazy right now to get a variable interest rate. I got a 30y fixed at 2.75% a few months ago through laurel road. The spread between fixed and variable is so low, that this is incredibly cheap insurance.

was it laurel road 'physicians mortgage'?

[VentAlarm]

was it laurel road 'physicians mortgage'?

It was a refi. Jumbo.

[StarTrekDoc]

None - get fixed rate.

[Tim]

None - get fixed rate.

Fixed 30 zero or 5% down . Shop it and lock it.
Assuming you invest the rest.

[GastroMastro]

Fixed 30 zero or 5% down . Shop it and lock it.
Assuming you invest the rest.

why not 20 year?

[Zaphod]

why not 20 year?

What is the point of that? You're either trying to take advantage of long term fixed rates at a great price (for which the longer it is the better the price), or you're trying to avoid interest or pay it down fast.

[GastroMastro]

Fixed 30 zero or 5% down . Shop it and lock it.
Assuming you invest the rest.

Also Tim, the problem is, the fixed rate options I am getting dont' seem **that** good compared to the variable. I know it's going to be higher, but how much higher is acceptable? Here is a sampling:

Bank #1
0% down, 30 fixed: 3.6
5% down, 30 fixed: 3.475
0% down, 10/6 ARM: 3.125
5% down, 10/6 ARM: 3

Bank#2
5%, 30 yr fixed 3.25%
5%, 20 yr fixed 3.125%
5%, 15 yr fixed 2.875%
5%, 10 yr ARM 3.00%
5%, 7 yr ARM 2.75%
5%, 5 yr ARM 2.625%

Bank #3
10% down, 30 fixed: 3
10% down, 10/1: 2.5

I am not sure what to expect, but I feel like if I can get .5% improvement in the loan with a 7 ARM, on an $800,000 house, over 7 years that's $28,000 in savings. Is that not worth it?

[GastroMastro]

What is the point of that? You're either trying to take advantage of long term fixed rates at a great price (for which the longer it is the better the price), or you're trying to avoid interest or pay it down fast.

Good point.

[dayman]

Do you intend to hold this mortgage long term? The 0.5% spread between fixed vs variable interest rates today counts for something, but it's still smaller than the spread between today's fixed rates and historical average mortgage rates.

I like 5% down, or 0% down with a plan to pay a little extra the first year.