Comments on: Anecdotes and Advice from a First Time Home Buyer Part 2 – Down Payments and Financing http://www.moneysmartsblog.com/anecdotes-and-advice-from-a-first-time-home-buyer-part-2-down-payments-and-financing/ Investing and Personal Finance Sat, 11 Feb 2012 17:11:02 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Anecdotes and Advice from a First Time Home Buyer Part 1 - First Steps and Pre-Approved Mortgages http://www.moneysmartsblog.com/anecdotes-and-advice-from-a-first-time-home-buyer-part-2-down-payments-and-financing/comment-page-1/#comment-2156 Anecdotes and Advice from a First Time Home Buyer Part 1 - First Steps and Pre-Approved Mortgages Fri, 23 Nov 2007 01:53:24 +0000 http://www.moneysmartsblog.com/anecdotes-and-advice-from-a-first-time-home-buyer-part-2-down-payments-and-financing/#comment-2156 [...] See the next post in this series “Down Payments and Financing“. [...] [...] See the next post in this series “Down Payments and Financing“. [...]

]]> By: Anecdotes and Advice from a First Time Home Buyer Part 3 - Choosing a Realtor http://www.moneysmartsblog.com/anecdotes-and-advice-from-a-first-time-home-buyer-part-2-down-payments-and-financing/comment-page-1/#comment-1731 Anecdotes and Advice from a First Time Home Buyer Part 3 - Choosing a Realtor Wed, 24 Oct 2007 09:03:45 +0000 http://www.moneysmartsblog.com/anecdotes-and-advice-from-a-first-time-home-buyer-part-2-down-payments-and-financing/#comment-1731 [...] My friend Christine has kindly agreed to write a series of posts on her experiences with buying a home for the first time which will be posted occasionally. See Part 2 - Down Payments and Financing [...] [...] My friend Christine has kindly agreed to write a series of posts on her experiences with buying a home for the first time which will be posted occasionally. See Part 2 – Down Payments and Financing [...]

]]> By: FourPillars http://www.moneysmartsblog.com/anecdotes-and-advice-from-a-first-time-home-buyer-part-2-down-payments-and-financing/comment-page-1/#comment-1718 FourPillars Mon, 22 Oct 2007 23:24:45 +0000 http://www.moneysmartsblog.com/anecdotes-and-advice-from-a-first-time-home-buyer-part-2-down-payments-and-financing/#comment-1718 Vasile - I think the statement in the original post was incorrect. I don't think the frequency of payment really matters if the total payment/period remains the same - so you are absolutely correct. Mike Vasile – I think the statement in the original post was incorrect. I don’t think the frequency of payment really matters if the total payment/period remains the same – so you are absolutely correct.

Mike

]]> By: Vasile http://www.moneysmartsblog.com/anecdotes-and-advice-from-a-first-time-home-buyer-part-2-down-payments-and-financing/comment-page-1/#comment-1712 Vasile Mon, 22 Oct 2007 19:14:21 +0000 http://www.moneysmartsblog.com/anecdotes-and-advice-from-a-first-time-home-buyer-part-2-down-payments-and-financing/#comment-1712 Mike – I’m not nit-picking here, I’m just trying to understand :-)

You’ve originally said: “Because interest is compounded monthly, making weekly payments will more quickly reduce your principal mortgage than paying on a monthly basis, even if the overall size of the monthly payment is the same.”

But later you added: “I believe the weekly payments only make a difference if you are paying more than your monthly payment ie if you take the monthly payment and divide by four and pay that amount weekly then you will actually be making extra payments which will reduce the mortgage quicker”.

So in the second case you are making 4 _extra_ payments per year, and the “overall size of the monthly payments” is not the same. There will be months with 4 weekly installments, and 4 months with 5 weekly installments.

Do I read it right?

]]> By: Appfunds http://www.moneysmartsblog.com/anecdotes-and-advice-from-a-first-time-home-buyer-part-2-down-payments-and-financing/comment-page-1/#comment-1711 Appfunds Mon, 22 Oct 2007 15:09:14 +0000 http://www.moneysmartsblog.com/anecdotes-and-advice-from-a-first-time-home-buyer-part-2-down-payments-and-financing/#comment-1711 What would you do if interest rates would go up say 3-4 % ? Hwo big would be your installment ? What would you do if interest rates would go up say 3-4 % ? Hwo big would be your installment ?

]]> By: FourPillars http://www.moneysmartsblog.com/anecdotes-and-advice-from-a-first-time-home-buyer-part-2-down-payments-and-financing/comment-page-1/#comment-1700 FourPillars Fri, 19 Oct 2007 21:21:09 +0000 http://www.moneysmartsblog.com/anecdotes-and-advice-from-a-first-time-home-buyer-part-2-down-payments-and-financing/#comment-1700 Vasile - I believe the weekly payments only make a difference if you are paying more than your monthly payment ie if you take the monthly payment and divide by four and pay that amount weekly then you will actually be making extra payments which will reduce the mortgage quicker. Mike Vasile – I believe the weekly payments only make a difference if you are paying more than your monthly payment ie if you take the monthly payment and divide by four and pay that amount weekly then you will actually be making extra payments which will reduce the mortgage quicker.

Mike

]]> By: Vasile http://www.moneysmartsblog.com/anecdotes-and-advice-from-a-first-time-home-buyer-part-2-down-payments-and-financing/comment-page-1/#comment-1697 Vasile Fri, 19 Oct 2007 16:24:56 +0000 http://www.moneysmartsblog.com/anecdotes-and-advice-from-a-first-time-home-buyer-part-2-down-payments-and-financing/#comment-1697 "Because interest is compounded monthly, making weekly payments will more quickly reduce your principal mortgage than paying on a monthly basis, even if the overall size of the monthly payment is the same." Two notes/questions here. First, as far as I know the interest in compounded monthly only for variable-rate mortgages. The fixed-rate compound bi-annually. Second, even if the compounding is monthly, how does it matter if you make the payments weekly? I was under the impression that it makes no difference, since it's all calculated at the end of the month. Am I right, or wrong? “Because interest is compounded monthly, making weekly payments will more quickly reduce your principal mortgage than paying on a monthly basis, even if the overall size of the monthly payment is the same.”

Two notes/questions here. First, as far as I know the interest in compounded monthly only for variable-rate mortgages. The fixed-rate compound bi-annually.

Second, even if the compounding is monthly, how does it matter if you make the payments weekly? I was under the impression that it makes no difference, since it’s all calculated at the end of the month. Am I right, or wrong?

]]> By: My Personal “Keep Me Up To Date On The Top News” blog » Anecdotes and Advice from a First Time Home Buyer Part 2 - Down … http://www.moneysmartsblog.com/anecdotes-and-advice-from-a-first-time-home-buyer-part-2-down-payments-and-financing/comment-page-1/#comment-1696 My Personal “Keep Me Up To Date On The Top News” blog » Anecdotes and Advice from a First Time Home Buyer Part 2 - Down … Fri, 19 Oct 2007 10:27:08 +0000 http://www.moneysmartsblog.com/anecdotes-and-advice-from-a-first-time-home-buyer-part-2-down-payments-and-financing/#comment-1696 [...] Check it out! While looking through the blogosphere we stumbled on an interesting post today.Here’s a quick excerptRemember that a mortgage is a fancy term for a loan; however, it is a loan that is secured against the value of your home itself. The original amount that is borrowed is referred to as the principal. A conventional mortgage requires a … [...] [...] Check it out! While looking through the blogosphere we stumbled on an interesting post today.Here’s a quick excerptRemember that a mortgage is a fancy term for a loan; however, it is a loan that is secured against the value of your home itself. The original amount that is borrowed is referred to as the principal. A conventional mortgage requires a … [...]

]]> By: Mr. Cheap http://www.moneysmartsblog.com/anecdotes-and-advice-from-a-first-time-home-buyer-part-2-down-payments-and-financing/comment-page-1/#comment-1681 Mr. Cheap Wed, 17 Oct 2007 17:43:22 +0000 http://www.moneysmartsblog.com/anecdotes-and-advice-from-a-first-time-home-buyer-part-2-down-payments-and-financing/#comment-1681 <p>Great primer on mortgages! I flip-flop on the idea of how important it is to avoid CMHC fees. As Canadians we all seem very risk-adverse and the idea of a bigger debt plus a surcharge on the purchase seems to really bother us (I've never done a high-ratio mortgage and would be reluctant to do so).</p> <p>On the other hand, if we can afford the payments, its a reasonable house for our income (we're not buying something way beyond our means) and it would take years to accumulate the 20%, it *may* be reasonable to bite the bullet and pay the extra fees if it'd get someone into their house sooner (although the counter argument would probably be, if the house is within their means, why haven't they been able to accumulate the 20% down?).</p> <p>Its a tough decision...</p> Great primer on mortgages! I flip-flop on the idea of how important it is to avoid CMHC fees. As Canadians we all seem very risk-adverse and the idea of a bigger debt plus a surcharge on the purchase seems to really bother us (I’ve never done a high-ratio mortgage and would be reluctant to do so).

On the other hand, if we can afford the payments, its a reasonable house for our income (we’re not buying something way beyond our means) and it would take years to accumulate the 20%, it *may* be reasonable to bite the bullet and pay the extra fees if it’d get someone into their house sooner (although the counter argument would probably be, if the house is within their means, why haven’t they been able to accumulate the 20% down?).

Its a tough decision…

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