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Mortgage Interest Rates/Relationship Banking/Down payment

Home Mortgages and Home Buying Mortgage Interest Rates/Relationship Banking/Down payment

  • Avatar radonc23 
    Moderator
    Status: Physician
    Posts: 26
    Joined: 03/07/2018
    Splash Refinancing Bonus

    Hey – finally appear to have found a house we like (moved for a new job).

    Income- ~$600,000 this year, will usually be more like $550,000.

    House price is $855,000. I don’t have that much cash currently, b/c I’ve recently been aggressive about saving/investment, paying off loans. In two-three years, essentially doubled my 401k and investment accounts after starting to read this blog and going to the conference (WCI or “Physician on Fyre Festival”). But, I’ve made some errors (have student loans at 2.9% and paid off $90k in a lump sum last year, invested $70-80k in some dubious ventures that may or may not pan out). I have enough for 20% down, but it would leave me quite tight (would have maybe $15k in cash left). So, I’m opting for 15% for some breathing room.

    House is $855k, mortgage will be $726,750.

    I shopped for loans 3 or so local places, and then got connected to JP Morgan for semi-relationship banking. You actually need a cool mill to get full benefits, but you can get some decent benefits less than that.

    I’m currently choosing a 7/1 ARM with the goal of using my annual bonus of about $70k or so to go right to mortgage, so the goal is to pay down in 10 years or so. The thought process is to take advantage of the lower rate, be aggressive with paying it off quickly.

    The rate for the ARM is 3.75% (no PMI, points, no underwriting costs – no one else could match this locally). If I do relationship – i.e. transfer EVERYTHING I have to JPM, I can get that down to 3.5%. The fixed rate for 30 year is 4.375, and 15 year is 4.125 (those numbers went down a bit today, but not the ARM – they will see what happens Monday)

    Questions

    1. 15% down isn’t the 20% that is normally recommended. Does it matter if the actual loan I’m getting is below the 2:1 ratio (mortgage:income), or should I try harder to get to 20%.

    2. Is it worth trying to get my way to $1m with Chase to drop the rate a quarter percent? The overall number at 30 years would be $30k, but I don’t think I will need even half that many years to pay off the loan.

    3. If being aggressive to pay off, is the gamble of an ARM worthwhile, or still risky?

    4. Does anyone have experience with mortgage from big banks? When I showed terms to all of local guys, they said there was no way they could match it, but that I should watch out with “the customer service” of a big bank.

    5. Any other things I should think about?

    Thanks

     

    #187438 Reply
    childay childay 
    Participant
    Status: Physician
    Posts: 1013
    Joined: 01/09/2016
    When I showed terms to all of local guys, they said there was no way they could match it, but that I should watch out with “the customer service” of a big bank.

    Click to expand…

    Not sure I have any specific advice about current rates etc, but this made me laugh.  Most banks end up selling your loan immediately anyway so you end up dealing with the mortgage servicer, not your local bank.  And it’s not like you have to ever talk to them, just send the payment monthly..

    i.e. transfer EVERYTHING I have to JPM,

    Click to expand…

    What does that mean exactly?

    #187442 Reply
    Avatar radonc23 
    Moderator
    Status: Physician
    Posts: 26
    Joined: 03/07/2018

     

    i.e. transfer EVERYTHING I have to JPM, 

    Click to expand…

    What does that mean exactly?

    Click to expand…

    Move cash and investments to Chase/JPM and if it totals $1 mil, then you are a “relationship” client. It’s sort of nice – you deal directly with a human being, get a few rate reductions on loans, etc. Just some perks.

    #187443 Reply

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