What kind of loan would be the best for us?

klamy2 · Joined: 15 Sep 2008 Posts: 1 1.33 Dollars($)

We owe $84,000 on a home equity loan. We have 7 1/2 years more to pay on it. We pay $1200 per month on it. My husband plans on retiring in the next couple of months, we want to have a lower per month payment, so we want to take out some kind of loan for 20 to 30 years. Is there a certain type of loan we should be investigating?

lisascherzer · Joined: 04 Jan 2008 Posts: 755 1.03 Dollars($)

Yes, the 30 year fixed rate mortgage has dropped quite a bit in the last week or so. With good credit, you should be able to secure a fixed rate at about 5.625 to 5.875 depending on all of the variables to your loan such as equity, credit score, etc. By looking at this option, you will be lowering your mortgage payment and most likely lowering your interest rate as well.

Right now fixed rates are about the same or not much higher than an adjustable so I would definately stick with a fixed rate option.

jameshogg · Posted: Mon Sep 15, 2008 10:46 pm Post subject:

Hi Lisa,

Nice to see you after quite some time. Smile

I'd agree with you in the sense that fixed rate mortgages have dropped down a bit. So, this could be an option for klamy. But what I was thinking is, her husband is retiring soon, so will he able to pay off a bigger loan in the retirement years?

I believe a reverse mortgage could be an even better option. What do you think Lisa?

Thanks

lisascherzer · Joined: 04 Jan 2008 Posts: 755 1.03 Dollars($)

Hi James,

Glad to see you remember me. I just got busy over the summer with loans.

As far as a reverse mortgage goes, unless there is substantial equity and they need additonal income, I don't think it would benefit them as much. But I don't have that much information to be able to make an accurate comparison.

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