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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 |
#2
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"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. |
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