I need mortgage advise

[ub4me]

Hello, y'all.

I'm buying $118K free standing condo and the closing date is August 13.
I locked at 5.25% for 5/1 ARM on June 14 (20% down without point), and they already charged $306 for commitment fee which is not refundable.

Since then, I realized that I'm just little bit out of money for 20% down, because $23600 downpayment plus $3500 closing fee including prepaid and reserved items would remain nothing in my bank account.
In addition, the rate has been improved a lot. So I'm considering to choose different loan program or another lender (their today's rate for 5/1 ARM is 4.75% with 0.125 point).

I'm planning to live this condo for 5 years, and I have a $252 monthly car payment for 47 months (its balance is $10700, and its rate is 4.15% and it has $200 prepayment pennelty if I prepay before November 2005).

Please help me to choose one of these scenarios to save money.



Here are the scenarios:

#1. Stay with current lender (5.25%, 0 point) to save $306 deposit, and change from 20% to 15% downpayment. Since this lender doesn't offer HELOC or HELoan in my state, I have to pay PMI.
Total monthly payment would be $521 (P+I) + $30 PMI + $252 car payment = $803.
I remain $5300 for moving expenses and for new appliances.


#2. Choose new lender and lose $306 deposit from current lender.
Since this lender offer no PMI program with 0.25% rate raise, put down 15% at 5.0% with 0.125 point.
Total monthly payment would be $538 (P+I) + $252 car payment = $790
I remain $5000 in my bank for moving expenses and new appliances.


#3. Choose new lender and lose $306 deposit from current lender.
Since the minimum amount for HELOC or HELoan is $10000, get 80/10/10.
4.75%, 0.125 point for the first loan, and 5.5% for the second loan.
Then pay $6700 at the first payment for second loan to reduce interests.
So after all of it, I would remain $5000 in my bank account for moving expenses and buying some appliances.
Total monthly payment would be $492 (P+I) + $98 (second loan to payoff in 60 months) + $252 car paymnet = $842.


#4. Choose new lender and lose $306 deposit from current lender.
And add $10700 car payment balance into house purchase price to consolidate it.
New balance would be $128700.
Get first mortgage ($102960) for 5/1 ARM at 4.75% with 0.125 point.
Get HELOC or HELoan($10700) and pay off car payment, but has to pay $200 penalty.
Pay $15040 for downpayment.
Pay $4000 for the first month of HELOC or HELoan.
Total monthly payment would be $537 (first loan) + $128 (second loan to payoff in 60 months) = $665.


I think #4 is the best way to go, but I'm not sure whether it is possible or not.
What do you guys think?
Please feel free to submit your opinions.

Thanks.

 

[ub4me]

Please, help.

 

[Vic]

Have you spoken with your current lender about changing the lock or loan program? They may be interested in keeping your business and accomodating your needs, and you won't have to lose the $306.

And oddly, I don't like option #4. The reason your payments would be so low is because you'd paying on that car for 20 years (except that it would be wrapped up in the house).

 

[DarphBobo]

Agreed, stay away from #4.

I would probably opt for #3 given those particular choices. Definitely talk to your current lender first - they make a TON of money on these deals, and will often work 'miracles' to keep your business.

BTW - I didn't see Taxes and Insurance in your calculations....just want to make sure you aren't forgetting about them.

 

[ub4me]

Thanks for comments, guys.
I didn't forget $100 property tax, $113 condo association fee, and $25 condo insurance.

The reason I want to go with #4 was that I can pay up to $1250 a month which includes mortgage P+I, property tax, insurance, and car payment. In other words, if I choose #4, I can pay extra $347 toward either first and second mortgage, or both.
But with #3, I can only pay extra $170 each month.

My current lender once said "lock-in is lock-in. There is no way to relock it."
But I will call them tomorrow, and find out whether they can do anything to keep me.

 

[PowerEngineer]

I have a couple of ideas for you to consider:

Given that interest rates will clearly be headed up over the next five years, you might want to consider getting a fixed-rate loan. Much safer.

Eliminate the car payment by selling that car. Get something cheaper that you can afford to pay cash for.

Good luck!