Best Mortgage?

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I’m looking at buying a new house, and I’ve found the perfect one. I’m getting ready to place a bid on the house. I’ve already been approved through my personal bank with an adjustable rate for 5 years at 2 percent. This loan can only go up 2 percent every years, and can only go to 10 percent maximum. I was wondering if this was a good mortgage, or should I find something else?

I’m also a Correctional Officer and I know some companies like Wachovia offers Mortgage specials for Law Enforcement and was curious to if anyone knew if these were worth applying for or if I should check another option.

Any help would be appreciated.

Thanks
The Bank Loan I spoke of is guaranteed for 5 years. Can only increase 2% every 5 years, topping out at 10% total. I could refinance if it became a problem and went past 5-6%. ?

3 Comments
  1. Reply
    misseasygoing
    January 25, 2011 at 8:35 pm

    I have been in the mortgage industry for 16 years so have seen the best and the worst. So, do not take that mortgage. If a rate could potentially go up 10%, is a disaster waiting to happen. What you need is a fixed rate, one that you know will not go up. Especially for your first home. If a rate could possibly go up 10% have you figured out what your payments could be? It could cost you your home….that is an astronimical increase!!!! Please please do not take that mortgage. Even if it went up to 6% – which is realistic considering the current interest rates, can you afford it? Then lets say it goes up to 8%, now can you afford it? If you think your payment will stay at a low rate you are going to be one of those people you are now reading about in the papers – just another person who lost their home because they didn’t ask for a fixed rate, and guaranteed payment for the next 5 yrs. I can promise you, you will lose your shirt, and possibly your home if you take that rate.
    Do the math. Figure out what your payments will be at the higher interest rate and tell me it still sounds like a good deal and you could happily pay it.
    If not, walk away and find a bank that will give you a fixed rate with a payment amount guarnateed for the next 5 yrs. Don’t take this deal. please.

  2. Reply
    loudevone
    January 25, 2011 at 8:53 pm

    If at all possible stick with a fixed rate mortgage. FHA requires 2.25% down so the down payment doesn’t suck up all of your cash…cash that you will need to move, etc.

  3. Reply
    stephanie b
    January 25, 2011 at 9:07 pm

    look into other things, if you were in the military, then they have incentives for vets. try federal credit unions!

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