What are the costs and cons of a VA hyrbid Streamline IRRRL loan
Just bought a house last year and have been getting bombarded with these letters about the VA Interest rate reduction loan (IRRRL) programs. At first I thought this was just another sucker scam but then I looked into it pretty indepth. After wathcing hours of videos explaining the calculations, playing on bankrate.com for hours and studying the programs I decided to call a few of the companies and speak with some reps about the programs.
The main questions I still have are what are the CONS of the VA Hybrid 5/1? And most importantly what are the COSTS?? What are the CLOSING COSTS going to be on this?
I love all the benefits and now I am starting to see how the 30 Yr Fixed can be the true suckers bet, ecspecially when there is no chance I’ll ever stay in the same house for 30 years, not even 20 , not even 10 yrs!
I’ve been quoted at 5/1 at 3.25% and 3/1 2.75%.I currently have a $250k fixed mortgage at 4.25%
The 39 year mortgage is just about the best mortgage around. It depends on how you would use this 30 year mortgage to your advantage.
You might pay it off as a 15 year mortgage by increasing the monthly mortgage payment. Check with your lender to see if there is a limit on the amount you are able to pay monthly or annually. Some mortgage lenders have a 20% limit on the amount you may pay per year based on the mortgage balance.
You are able to pay the monthly mortgage semi-monthly, thus taking about 7 years of the number of years you would be making the monthly mortgage payments.
Because you have a 30 year fixed rate mortgage does not mean you have no options.
Most of the mail you are receiving from the various lenders would have partially checked your payment history, thus are able to offer you a certain reduced rate. There are certain questions you would need to ask yourself as well as those that would be providing the mortgage loan.
Most would require no up front fees such as an appraisal, credit report, title and escrow fees. If you are note required to pay point for this mortgage loan you would need to ask it the interest is being increased to cover the point and other mortgage loan cost. This is the case in most mortgage loans that are no fee, no cost..
Find out the cost if you were required to pay the points and fees. Then you would be able to make an intelligent decision as to which is beneficial to you. Remember that you have to pay the interest for the life of the mortgage loan. If you pay the points and fees you may deduct these points and fees for the life of the mortgage loan from your federal income tax.
An adjustable mortgage loan is just that. At some point in the terms of the mortgage loan monthly payment would increase. You would have to be prepared for this increase and know the amount this increase would be.
As one combat veteran to another veteran, thanks for serving.
I hope this has been of some benefit to you, good luck.
“FIGHT ON”
