Do you figure mortgage payments for a 2nd mortgage the same as for a 1st mortgage?
June 13, 2008 · Print This Article
neffykitty asked:
We’re about to close on a house and we have a 1st mortgage, and then a 2nd to pay some of the down payment. This avoids PMI.
We’re about to close on a house and we have a 1st mortgage, and then a 2nd to pay some of the down payment. This avoids PMI.
If I plug the numbers into a mortgage payment calculator, the 1st mortgage payment is the same as the one on the TIL the lender provided. But the 2nd payment isn’t - the calculators all say it’s less than what the lender is saying.
Is there a different mortgage payment calculator for a 2nd?
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Josh Dunaway has been a certfied Realtor in the suburban Chicagoland area for over 20 years. Aside from starting his own real estate company, he also owns a mortgage company as well.
It should be the same….what is the term of your second? Maybe that’s where you are encountering your problem. Not all seconds will have the same term is the first.
Plus, are you plugging in the correct interest rate on the second? Seconds always have a higher rate than the first.
2nd mortgage rate are usually higher due to the risk factor and sometimes have bonus payments built into them or even a broker’s fee. Read the fine print again maybe with your lawyer this time.
That will depend on whether your 2nd is a fixed rate loan or a Home Equity Line of Credit.
If it is a fixed rate 2nd it may be either amortized over 30 years but due in 15, or it may be amortized over 20 years.
If it a Home Equity Line of Credit the payments are interest only.
Your P/I is based on 10.00 for every 100.00 dollars. Did you guys pay closing cost? What percent did you close at? What is you intrest rate based on? What is your Debt -to - income ratio?
Seconds are usually (but not always) amortized over a 30 year period. Look at the final TIL before you close as the one supplied before is really just an estimate.
No. First mortgage loans are for a much greater amount and you generally will get better terms than on a second - that is if your credit is good.
The payments are calculated by the lending institution by the type of loan you choose. Say B of A is your lender, and the loan you have chosen is for a period of 30 years on a fixed rate. So lets say …interest is 7.00% and over a period of 30 years on a “fixed” schedule. You would pay the same monthly amount for a period of 30 years.
A second is more than likely different terms. Say
20 thousand at 4.75% (to start) for 10 years at a “Variable” rate. This payment would adjust to different amounts periodically. Watch out for the BALLOON clause…(This is a lump sum that could be due after the 10 years is reached) You would have to read your paperwork to determine if it is a variable interest note and for how long and how often the rate would adjust “Upward”. If you had a Line of Credit, this too would have a set of terms.
You should gain knowledge on the the “Fixed” type of loan and the “Adjustable” term note… and types of mortages provided as well as lines of credit and private money.
Good luck-prior home owner and borrower
Same calculations.
You should verify:
1. Loan amount
2. Rate
3. Term (15yrs? 30yrs?)
Check with the lender and see which of these are off.