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Old 01-15-2007, 10:57 AM
 
Location: Central FL
1,683 posts, read 7,644,344 times
Reputation: 834

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It's official: American home buyers and refinancers are dis-ARMing at a rapid pace. Freddie Mac's newly-issued survey of adjustable rate mortgages found that the ARM share now stands at just 25 percent, down from 33 percent in 2004. In the mid-1980s, by contrast, ARMs were the most popular financial tool for buying a house, with a 62 percent market share.

Moderator cut: Provide a link instead of copying everything here, please

Last edited by Marka; 12-07-2007 at 11:59 AM..
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Old 01-15-2007, 02:03 PM
 
Location: Living in Paradise
5,702 posts, read 22,453,594 times
Reputation: 2991
pianogal,

You know this stuff!!!! What is the best approach for the average family with an ARM that is due?

I have a 15 year loan, will be paid in 2016 at a 5%. making larger payments and I will retire for a 2nd time 2016....
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Old 01-15-2007, 03:43 PM
 
Location: Central FL
1,683 posts, read 7,644,344 times
Reputation: 834
Quote:
Originally Posted by sunrico90 View Post
pianogal,

You know this stuff!!!! What is the best approach for the average family with an ARM that is due?

I have a 15 year loan, will be paid in 2016 at a 5%. making larger payments and I will retire for a 2nd time 2016....
Thank you for the compliment, Sunrico. Although I'm not sure it's deserved.

When we bought our first home in the mid 80's interest rates were 14%! We started out with an ARM at 10% that readjusted annually and at each anniversary for the first 3 years we had to opportunity to lock in at the current rate with no extra fees. On the 3rd anniversary we locked in at 10% and thought we were lucky. A few years after that we were able to refi at 8% and do that a couple more times as rates as rates went down. At the end we had a 15 year loan at 4 and 7/8. Naturally I think ARMS are great when they are used responsibly.

If I had an ARM now, I would probably go ahead and lock in at current rates. If rates were to go down significantly and that's doubtful - refi'ing is always an option.

It is cool that you can retire so young. We probably won't retire until 2022 or so - full retirement age - unless we win the lottery....LOL We need the time to continue saving and for our retirement accounts to grow. Hopefully at that time we will sell our current home and purchase something much smaller...paying cash for it and reinvesting anything leftover. Of course, that all depends on what real estate in Florida does.
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Old 01-15-2007, 04:13 PM
 
2,141 posts, read 6,402,178 times
Reputation: 589
Quote:
Originally Posted by pianogal View Post
Thank you for the compliment, Sunrico. Although I'm not sure it's deserved.

When we bought our first home in the mid 80's interest rates were 14%! We started out with an ARM at 10% that readjusted annually and at each anniversary for the first 3 years we had to opportunity to lock in at the current rate with no extra fees. On the 3rd anniversary we locked in at 10% and thought we were lucky. A few years after that we were able to refi at 8% and do that a couple more times as rates as rates went down. At the end we had a 15 year loan at 4 and 7/8. Naturally I think ARMS are great when they are used responsibly.

If I had an ARM now, I would probably go ahead and lock in at current rates. If rates were to go down significantly and that's doubtful - refi'ing is always an option.

It is cool that you can retire so young. We probably won't retire until 2022 or so - full retirement age - unless we win the lottery....LOL We need the time to continue saving and for our retirement accounts to grow. Hopefully at that time we will sell our current home and purchase something much smaller...paying cash for it and reinvesting anything leftover. Of course, that all depends on what real estate in Florida does.
She is good at this stuff. I can't wait to hear her play the piano.
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Old 01-15-2007, 04:28 PM
 
Location: Central FL
1,683 posts, read 7,644,344 times
Reputation: 834
I can't wait to hear her play the piano.

Now that I CAN do.....LOL
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Old 01-15-2007, 06:57 PM
 
Location: WPB, FL. Dreaming of Oil city, PA
2,909 posts, read 13,105,271 times
Reputation: 996
ARMs are pointless now when fixed rates are pratically the same but much safer! 15 year mortgages are the best because of lower interest and also you can pay it off sooner. If interest rates go over 8-10% a mortgage is no longer economical and its best to save till you can buy the house in cash.
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Old 01-15-2007, 07:23 PM
 
Location: Living in Paradise
5,702 posts, read 22,453,594 times
Reputation: 2991
Quote:
Originally Posted by pianogal View Post
I can't wait to hear her play the piano.

Now that I CAN do.....LOL
Load a music file...
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Old 01-15-2007, 07:34 PM
 
2,141 posts, read 6,402,178 times
Reputation: 589
Quote:
Originally Posted by sunrico90 View Post
Load a music file...
Yes, I would like to hear you play
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Old 01-15-2007, 07:47 PM
 
Location: Central FL
1,683 posts, read 7,644,344 times
Reputation: 834
I have no idea how to load a music file...will have to check with my son. We'll see...
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Old 01-15-2007, 07:54 PM
 
Location: Living in Paradise
5,702 posts, read 22,453,594 times
Reputation: 2991
Quote:
Originally Posted by pianogal View Post
I have no idea how to load a music file...will have to check with my son. We'll see...
Try attach file
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