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Mortgage question: 2 Mortgates with 10% down or 10% with Single Premium loan?

Z

Zombie

Platinum Member
on a #320k loan the 2 mortgage mothly payment comes to

$2148.00 with zero points, 5.75% APR and no PMI (10% downpayment)


now

for $320K SINGLE PREMIUM loan the monthly payment comes to

$2127.00 with zero points, 5.75% APR and no PMI (PMI ammount is included in the loan) with 10% downpayment


Now I am leaning towards 2 mortgage loan since it will go down to $1900/month once the 2nd mortgage of $32000 is paid off.

What do you guys think?
 
Are both rates on the combo loan fixed? Either way I would go with a single loan any day of the week. 2 open mortgage tradelines may actually hurt your credit more then one.
 
In case of 2 mortgages the APR on Main mortgage is fixed but the APR on 2nd mortgage is prime + 1

But I feel like we can pay off the 2nd mortgage in 2-3 years. This will bring down our monthly as well and we won't be stuck paying PMI (disguissed under main mortgage).
 
Take the two loans without the PMI.
Interest you pay on the mortgage is tax deductable.
Your PMI payment isn't.

Find out how much the PMI payment is (you cannot say there is no PMI and then say it is included in the loan) and consider that wasted money.
 
Originally posted by: Woogoat
Are both rates on the combo loan fixed? Either way I would go with a single loan any day of the week. 2 open mortgage tradelines may actually hurt your credit more then one.
Click to expand...
:roll:


How much is the upfront single premium MI?
 
Single premium means I borrow around 6K more as part of my main mortgage. This becomes automatically tax decutable. There is no seperate payment for PMI. But this means the monthly remains high for next 30 years. I am leaning towards making it 2 seperate loans at the risk that it may be a short term loss due to prime + 1 APR but in the long term my monthly will be low.

Both loans count 10% downpayment + closing
 
Interesting, so how would the extra 6k show up on your 1098 at tax time, under points?

I would still take the two loans, pay down the second, then save over the life of the loan.
 
I disgaree, why take a higher payment and have an adjustable second loan? If the PMI is written into the loan, then its tax deductable because it is part of your mortgage now. Secondly, depending who you go through, loans are often sold and having 2 loans bouncing around is a huge headache.
 
So the choice is either:

A 326k single loan at 5.75% (with the PMI figured in)
A 290k loan at 5.75% with a 30k second at prime +1 (currently around 6.5) ?

Unless I am still not getting it (sorry OP, I am just now getting some coffee.)
If this rewording is correct, you can decide if you think you can pay the second fast enough that 6k extra for the single loan wouldn't make sense.
 
Originally posted by: Pantoot
So the choice is either:

A 326k single loan at 5.75% (with the PMI figured in)
A 290k loan at 5.75% with a 30k second at prime +1 (currently around 6.5) ?

Unless I am still not getting it (sorry OP, I am just now getting some coffee.)
If this rewording is correct, you can decide if you think you can pay the second fast enough that 6k extra for the single loan wouldn't make sense.
Click to expand...



Well not exactly,

it will be either

256k loan(@ 5.75% fixed) with another loan of 32 k @ prime + 1

Monthly payment is $2148.00 per month till 2nd mortgage is paid off then $1900.00 per month


or

288k loan + 6k PMI premium loan (all at 5.75% fixed)

$2127.00 per month for 30 years
 
Are there closing costs associated with the 32k loan?

To be honest, I would still take the two loan option, then look at somewhere like penfed to refi the 32k. They have prime -.5% running right now, or you could do a fixed at 5.99% for 180 months.

The thought of paying 6k for nothing just rubs me the wrong way.
 
Originally posted by: Zombie
Yes according to the loan agent PMI will be tax deductable since it is part of the main mortgage.
Click to expand...

Are you sure? If that's the case, shouldn't your loan be greater than $320k then, since PMI would be added to the loan amount?
 
Originally posted by: Zombie
Yes according to the loan agent PMI will be tax deductable since it is part of the main mortgage.
Click to expand...
As the MI premium is being financed into your mortgage, the interest that accrues on the MI will be tax deductible, but not the MI itself.

Originally posted by: royaldank
Would your 1 loan option not decrease in monthly payment after you are no longer paying MI?
Click to expand...
This is single premium MI. The MI is paid all at once upfront.


I recommend the 80/10 combo, but with a fixed rate on the 2nd. The Fed is going to continue raising the Prime for some time to come.
 
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