Hi Saphire, Very easy for you to say without concrete examples. I can try to post case examples for you as available and permission is granted. I have a significant portfolio of such cases... but I do need to get permission, and then put them in a postable format. May take me a bit, but I *WILL* do it... had been on my list anyway. So assuming I am trading up in value and will be financing 80% (because no one will give me the house at 100% and I do not have enough cash to buy it outright) Do you mean no bank will LEND 100% on that house? Be aware, you ARE financing 100% of the purchase. Apparently you'll be taking 80% from the bank at the cost of their interest charges, and 20% from your family at the cost of the safe returns available. There's no free lunch... ALL of the money comes at a cost, including the money you take away from your family's safety reserves and growth investments. if I buy an expensive house (for me) you are right that this affects my portfolio as a whole so how do I get the least expensive rate or product that also is nbot subject to rate increases if the market changes Fortunately for you, right now the expense premium on longterm fixed loans is very small above the more timeframe realistic 5 and 7 year fixed intermediary programs. You can likely get the risks completely bank-carried at just 1/4% or so above the 5 year terms. I'd suggest being a little 'suspicious' of ol' Mr. Market, however... when Mr. Market makes longterm fixed loan costs extremely attractive relative to shorter term periods, the Market knows that the shorter term programs are more likely to become significantly cheaper as they adjust (thus the "market trickery" to entice the consumer into the more expensive programs permanently.) Without concrete examples or references, either as to stradegies that work or references to formulas or analysis it all sounds very ambigious, mysterious and a bit glib. It certainly takes an open mind for numbers, and the ability to visualize offsetting growth or cost curves. The bases of the entire conceptual issue are; Rates are relative; When costs of borrowing increase, yields on savings/investments increase, and vice versa. Cash Is King; The costs of being illiquid in emergency can be catastrophically worse than the costs of staying liquid (in carrying costs on the leverage to do so,) It is very easy to say a FMR is expensive but without providing either alternatives or examples or references as to why that is so, I have to question it Currently the immediate face costs on a 30 FRM versus (as example) a 5 yr ARM are minimal... very financially unusual, which DOES definitely call for suspicion. The more obscure costs on a Fixed are the ongoing higher carry costs incurred when rates shift to the downside on the loan, but you are stuck at the higher rates unless/until you incur another round of transaction costs to reset the financing. Eliminating uncertainty is more efficiently done by matching income yield instruments (savings & investments) to leverage instruments (mortgages.) Properly placed and managed the spread continually works in your favor, and you remain much safer as you are not locked away from your liquidity. CLEARLY explain how this works or various stragies that might work for a trade up house that is intended to be held indefinitely How long you intend to OWN is irrelevant, (what DOES matter is how long you intend to take to reach financial independence,) but I do have a few cases that reflect the same situation. I'll see if I can get them illustrated to present as soon as feasible. Cheers, Dave Donhoff Strategic Equity & Mortgage Planner

Hi vonrouge, Does this apply in all cases, or only when a person has been preapproved based on the previous, lower scores? Well, there could theoretically be an exception... but I've yet to see a lender voluntarily reduce an interest rate after their loan docs have been drawn. Without a broker badgering them, and without competitive pressures, lenders would happily write the deals as fat as they could get away with. And hey, Dave, I see you're not "just some mortgage guy" anymore! OOPS! That was a "Freudian Slip" of the signature-file trigger. I hit "D" instead of "S" (my code access for the "Some Mortgage Guy" sign off, and once "submitted" it was irretrievable. Hope Spike will overlook ;~) Cheers, Dave Donhoff Just some mortgage guy ;~)

The idea of front loaded interest on mortgages is a bit of a misconception, while you pay more interest in the early years that is only because you owe more money (If you have a 3.9% mortgage then you pay 3.9%/12 on the outstanding balance you owe each month). While that may sound pertinent, the discussion is really about effective interest versus compounding interest. As you pay on your principle you pay less interest, so over time the interest charges are smaller because your principle is smaller. While on an investment you start with a principle and if left alone for some period of time the interest continues adding to the principle and therefore pays more interest. This discussion is largely around the idea of people who have some income coming in and some ability to make payments. While, I could note that guaranteed payment annuities are about equal to house payments, they are no more liquid than houses so not really an investment that is better than a house. In the end, we are discussing people who want to be done with the headache of a mortgage and not people who simply don't have the income to continue paying a mortgage. Edit: It is also important to remember that a 15 year mortgage doesn't mean you have to make 15 years of payments. Making even a few years of payments before liquidating the investments to pay off the balance will typically result in gains. I think a lot of people focus too much on the stress of coming up with the money for monthly payments and forget that any time you get tired of stressing over payments, you can simply liquidate your investment and pay off the loan. While I have said the same thing jn3344 has many times, I have a completely different conclusion. When you have a paid off house and little money in the bank you have no options for dealing with uncertainty. Cash gives you options, the farther you get from cash the less options you have, and nothing is farther from cash than a house. Think of it this way. My father was just this week presented with a treatment option for a medical condition that was not covered by Medicare, the time sensitive treatment was going to cost $35,000, but it would greatly improve his quality of life. What allowed my father to make that decision was having access to $35,000, if he paid for his house outright and didn't have any money then he couldn't make that decision. Now suppose spending this $35,000 means my father will not be able to continue paying his mortgage and will have to move out of his house into a smaller apartment. I feel confident he will tell you walking around his smaller apartment beats not being able to walk around his bigger house. Edit: Many people have a false sense of security from a home. The only real security a paid off home provides is the equity (the access to cash). Homes are fairly inefficient domiciles, the taxes, maintenance and less efficient utilities minimize any real savings over renting. The path to homeless has nothing to do with a paid off house and a lot to do with not enough cash.

Thanks for the advice. I’m disappointed to hear that Navy Fed is playing games — I was hoping that they would do better for military families. I just got off the phone with someone there... they quoted a “best rate” for today of 3.25 % for a 0 point, 30 year mortgage but they charge a 1 point origination fee, plus between $400 -$800 for an appraisal, plus $40 to do a credit check on me and DH, and a “service fee” and a “tax set up fee” and a ”standard fee” and a “flood certification fee” and a bunch of other fees. It was hard to get a straight answer about all the so-called fees. They said from the time they get all the paperwork from us, they need 30-45 days but won’t tell me exactly what paperwork they need until I submit the application and the $40 credit check fee. It seems like A full 1% on a jumbo mortgage is a big fee to start with so why are they nickeling and diming with so many addition fees? Just because they can? ! At the end, after saying that’s the best they can do, they say if two other places give me a better offer, they’ll match. AAGGRrrH. I am going to hate this process! Is this par for the course?