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Having a hard time deciding which loan is right for me:
Lender A - 5/1ARM 2.24% for 60 months than minimum of 3.25% thereafter, can relock for 5 years at current rate anytime, 15% downpayment no PMI payments end up $180 less then lender B, 2% max adjustment yearly, 6% over life of the loan
Lender B - 30 year fixed 3.625% 15% down no PMI ends up $180 more then lender A for the first 60 months then equal to or less than lender A
Closing cost are comparable, we plan to stay in the home for at least 15-20 years. Do I go with lender A and then maybe refi in 12-18 months and risk rates going up? I dont think rates can go much lower and the only way I could find a lower 30 year is bring 20% down which I dont have.
Rates are at an all time low. Don't count on refinancing. Your 30-year fixed rate will probably be the best bet as long as you plan to stay more than 5 years in the house. What if rates go up to 5 or 6 or 7% (which historically were considered low rates)? How much will your payment change? Can you afford it?
Rates are at an all time low. Don't count on refinancing. Your 30-year fixed rate will probably be the best bet as long as you plan to stay more than 5 years in the house. What if rates go up to 5 or 6 or 7% (which historically were considered low rates)? How much will your payment change? Can you afford it?
Good Advice!!!!
30-year fixed rate will probably be the best bet as long as you plan to stay more than 5 years in the house.
No one can "plan" to stay in home for 15-20 years unless you are close to retirement or have guaranteed pension or kids almost done with school.
Saying that. Depends on how strong your finances are to withstand a rate increase vs potential savings for 5 years with ARM
We just refinanced our 70 year mother to no closing cost/no fee 2.5% 5 year arm. Home is still worth 500k and loan balance is $220k. My sister co owns home.
My sister plans to pay off loan or close to pay it off in 5 years anyways. So might as go for lowest rate.
Although interest rates are at an all time low right now, with all the fed borrowing interest rates will rise, don't let anyone tell you otherwise. If interest rates increase, your payments increase. Imho, 30 year mortgage with fixed rate.
Think we are going to go with a 5/1 ARM 15 year & 1.79%, since we can relock the rate at anytime during the life of the loan for another 5 years the highest rate we will ever see is 5.79% since its a max of 2% per adjustment. Feel better knowing we will be 2/3 of the way thru paying off the house before the rate can go higher then what a 30 year fixed is now.
Think we are going to go with a 5/1 ARM 15 year & 1.79%, since we can relock the rate at anytime during the life of the loan for another 5 years the highest rate we will ever see is 5.79% since its a max of 2% per adjustment. Feel better knowing we will be 2/3 of the way thru paying off the house before the rate can go higher then what a 30 year fixed is now.
The rate is based on wall street prime plus 0 margin. To get the 1.79 it was 2 point but the lender is only charging me for 1. Yes the discount rate is only the 1st five years then it will go to prime plus 0.
No one can "plan" to stay in home for 15-20 years unless you are close to retirement or have guaranteed pension or kids almost done with school.
Saying that. Depends on how strong your finances are to withstand a rate increase vs potential savings for 5 years with ARM
We just refinanced our 70 year mother to no closing cost/no fee 2.5% 5 year arm. Home is still worth 500k and loan balance is $220k. My sister co owns home.
My sister plans to pay off loan or close to pay it off in 5 years anyways. So might as go for lowest rate.
Yes, I plan to stay there 15-20 years since I'm medically retired and have a guaranteed income. Most of my relatives have stayed in their home 10-15 years and counting so it's not impossible.
The 2.5% is excellent. I think I'll go with the fixed and just make extra payments every month.
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