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Which physician loan would you choose?

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  • Which physician loan would you choose?

    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%

  • #2
    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

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    • #3
      1

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      • #4
        3

        A little cushion in case it goes sideways for closing fees

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        • #5
          Originally posted by jacoavlu View Post
          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

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          • #6
            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.

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            • #7
              Originally posted by VentAlarm View Post
              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'?

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              • #8
                Originally posted by GastroMastro View Post

                was it laurel road 'physicians mortgage'?
                It was a refi. Jumbo.

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                • #9
                  None - get fixed rate.

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                  • #10
                    Originally posted by StarTrekDoc View Post
                    None - get fixed rate.
                    Fixed 30 zero or 5% down . Shop it and lock it.
                    Assuming you invest the rest.

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                    • #11
                      Originally posted by Tim View Post

                      Fixed 30 zero or 5% down . Shop it and lock it.
                      Assuming you invest the rest.
                      why not 20 year?

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                      • #12
                        Originally posted by GastroMastro View Post

                        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.

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                        • #13
                          Originally posted by Tim View Post

                          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?

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                          • #14
                            Originally posted by Zaphod View Post

                            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.

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                            • #15
                              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.

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