Close

See current mortgage rates on Zillow Mortgage Marketplace

Profile picture for scotth.halburt8

Do people ever take out 5 year mortgage loans? I'm not talking about 5/1ARM. But 5 years for total

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 26 2009 - West University
We think we've answered this question for you!
  • Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.
 
 

Answers (10)

Welcome Keane! 
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 27 2009
Thanks Rudi!

I literally have a borrower who's done this. He called me to refinance his rate lower but he had paid his balance down from $600k to $200k in one year.  I told him at the pace he's paying it down, the cost of refinance and how much more valuable his time is at work EARNING his money to payoff versus a new loan that he should just stay with the loan he has.  We would get a loan done with hours of work over a 30 day period, in which he probably could've earned enough to pay another 25% of his balance considering the pace he was at.

The nice thing about this option is in case you do NOT pay it all off by the end of 5 years but are close, your payment requirement would be so small that the adjustment would probably barely affect you.  Most interest-only ARM's are interest-only for 10 years.  The interest payment is recalculated every month based on the balance. 

Even 7/1 ARM's are lower than any fixed rate right now, so if you were uncomfortable with a 5/1 ARM, you could always get a 7/1 to buy yourself an extra 2 years.

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 27 2009

Keane,

That would be a good alternative for Scott to consider. Good thinking!

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 27 2009
It's rare.

If someone told me they were going to have their house paid off in 5 years, I would recommend a 5/1 interest-only ARM, devide their principal balance by 60 payments and add that principal payment to the monthly required interst-only payment.  The borrower's payment would go down with each principal payment and the rates for a 5/1 interest-only ARM are lower than any fixed rate loan right now. 
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 27 2009

Some lenders will give a special rate quote for 5 years. Call Nic on the right hand side under top lenders or Martin and fill out an application so they can "shop" this for you. Good luck, Rudi

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 27 2009
In the past, I took out several 30 year mortgages - giving myself a lot of wiggle room in case of emergency.  Then I paid them off as quickly as I could. 
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 27 2009
Your best bet would be to take out a 10 year mortgage and just pay it off at a 5 year amortization.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 26 2009
It's probably been over 10 years since I saw a 5 year fixed on a rate sheet. Take a 10 year fixed and pay extra.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 26 2009
It is not a norm at all. 
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 26 2009
No, the payment would be too high for 95% of people. $200K loan would have a principal and interest payment of $3683/month. Some banks used to have a 30/5 and may still and that would be a 30 year amortization with a balloon payment at 5 years.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 26 2009
 
Related Questions
Do people ever take out 5 year mortgage loans? I'm not talking about 5/1ARM. But 5 years for total
Profile picture for Rudi Hofmann
Latest answer by Rudi Hofmann
November 27 2009 | 10 answers
  • Asked by scotth.halburt8
  • In Mortgage
  • November 26 2009
Mortgage Rates
 
Be A Good Neighbor

Zillow Advice depends on each member to keep it a safe, fun, and positive place. If you see abuse, flag it. More on our Good Neighbor Policy.

Homes for Sale
  1. 711 W 21st St # 202, Austin, TX Home For Sale
    711 W 21st St # 202, Austin, TX 78705

     For Sale: $220,000

    • Beds: 2
    • Sqft: 830
    • Baths: 2.0
    • Lot: 958
  2. 2708 San Pedro St # 302, Austin, TX Home For Sale
    2708 San Pedro St # 302, Austin, TX 78705

     For Sale: $585,000

    • Beds: 3
    • Sqft: 1881
    • Baths: 2.0
    • Lot: 2134
  3. 2708 San Pedro St # 202, Austin, TX Home For Sale
    2708 San Pedro St # 202, Austin, TX 78705

     For Sale: $495,000

    • Beds: 3
    • Sqft: 1670
    • Baths: 2.0
    • Lot: 2134