Mortgage Blog

Background: We got the loan done, the borrower can choose either
275k 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 LTV
95%.

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 the
principal 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.