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Location: carl sagan's universe
Posted on: 20-11-08 20:45:27
Which bank is offering you this?
Usually it is a HELOC (Home Equity Line of Credit) at 80%.
On this you can pay both interest and principal of the amount or only the interest.
If you are being offered that rate- nothing like it. I would take it - better than a conventional P+I (principal + interest) mortgage.
Right now conventional mortgage rates are useless if you can cough up the 20%.
Also if you are refinancing, renewing and have built up 20% or more equity in your home, this is a better option.
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Any feedback on this? anyone? please......
Quote:All other things being equal, your monthly payment should be less on a lower interest rate, right?
Originally posted by manojcns
For example, if I get a 215k conventional mortgage with 55k down at 5.5%, the monthly payment is approx 1320.00. Will the monthly be lower than 1320.00 on HELOC at 3% interest rate for the same amount loan of 215k? Please let me know.
Assuming you don't slide your amortization period and don't take any more loan, the payment on 3% interest rate will obviously be lower than on 5.5%.
Of course, if the 3% is variable, then it will change in future upwards or downwards.
If interest rates rise, you will either have to increase your payment or increase your amortization period.
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