This is totally off the topic so I expect some really, good off the topic responses. I bought a house two years ago here in beautiful Colorado and throughout that time, the more I thought about the loan, the madder I started getting, specifically, paying all the interest up front. I borrowed a little over $100K and came up with the rest. The total cost of the house was $233,000.
What these banks do is charge you all the interest up front. This means, that for the first ten years on a thirty year fixed loan, you pay almost nothing but the interest. So after ten years, you finally start paying principle. But let's say on the eleventh year, you want to pay the whole loan off. I would then have to pay the entire principle which means that the house now costs $330,000! I realize that after ten years, I would make back all that interest in the appreciation of the house but this really is irrelevant. My question to all you money pros out there is is there another way to finance a house without paying all the interest up front, IOW like most loans in which the principle and interest are placed together and divided by the number of years of the loan, like a car loan? Has anyone heard of this new kind of loan called, My Bank, My Money My Way, (something like this). I spoke with a guy about this and it's based on an equity loan used to pay off the bank. Another gimmick the banks use, is lending you money on the equity of your house and then charging you interest, to borrow your own money! When you buy a house, the down payment which is your money becomes theirs-- you pay to borrow it! Does anyone have some good solutions? My 30 year fixed was taken out at 5.875% with no points and reasonable closing costs through Wells Fargo. Mark
