Merrill Lynch Fixed-to-Adjustable Mortgages???
 

Hi. I'm considering one of these loans. Fixed interest,
interest-only payments for the first 5 years and then variable
amortized thereafter. Plan to move before the 5 year period and want
to put down a large sum towards the principal well AFTER closing.

Anyone have experience with Merrill Lynch mortgages?

Thanks,
Marc

"Hi. I'm considering one of these loans. Fixed interest,
interest-only payments for the first 5 years and then variable
amortized thereafter. Plan to move before the 5 year period and want
to put down a large sum towards the principal well AFTER closing. "

Unless the interest rate for the first 5 years is significantly lower
than the interest on a fixed rate mortgage and you're absolutely sure
you're going to move, with fixed rates near all time lows, I would get
a fixed rate loan. Also make sure you look at it from an after tax
basis too. For example, if the difference is 1%, and you're in the 33%
bracket, the after tax difference is only .67%

And personally, when you can borrow money at around 6%, more like 4%
after tax, I wouldn't be paying that down. I'd use the large sum
available for investment. Historically, over a reasonably long period,
the broad stock market has returned around 10%. Or you could put it
into a rental property.