March 30th, 2010 3:33 PM by Eric Fang
Background: We got the loan done, the borrower can choose either275k with the rate 5.25% for 30 yr fixed(no cost) for LTV 98%or 265k with the rate 5.125% for 30 yr fixed(no cost) for LTV95%.
Q: Which loan program should I choose, in your openion.
A: Since you plan to purchase another property, The reserve cash of 10k is more important than the rate reduction. And from 275k 5.25% to 265k 5.125% will save you around $75.67. It seems like a lot, but actually you save only about $20 if we compare the same loan amount(Your savings is mainly from theprincipal reduction). It will take over 10 yrs to get the break even and further more the cash reserve is more important for your future purchase.
And Thanks President Obama for this great rate.