Gentlemen, here is a question:
If housing does follow the stock market (assuming this corona shit goes into multiple months), might be a good time to pick up a rental, or even a new primary home:
Given today’s interest rates, I’ve been giving some thought to what the best mortgage option is and wanted to see what you guys think.
30yr fixed 20% down
30yr fixed 10% down PMI
7/1 ARM 20% down
7/1 ARM 10% down w/ PMI
10/1 or 7/1 interest only with either 20% or 10% down
I can also avoid PMI in the 10% down payment option by taking out a second loan to cover the missing 10%...
Part of me wants to avoid putting down a full 20% and I sort of like the idea of doing interest only for smallest possible mandatory payment and pay the principle off at my own pace.
What do you think? What’s the appropriate play in today’s climate?
I should qualify a few points for consideration:
a.) we are at 0% federal rate. It can only go up from here.
b.) my overall feeling is that real estate market upside will be limited over the next 5yrs or so.
c.) lets assume I would hold for a decade or so.
30yr fixed as close as one can be to 100% in california down (to live in)