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Old 09-26-2013, 12:53 PM
 
Location: Southern California
4,350 posts, read 4,933,884 times
Reputation: 2129

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Quote:
Originally Posted by sj08054 View Post
Those are terrible rates.

You can get a 5/5 ARM for 2.75% with 5 years adjustment cap of 2% and lifetime max 7.75% with Penfed
I should consider buying a new house at those rates.
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Old 09-26-2013, 01:20 PM
 
3,313 posts, read 4,093,048 times
Reputation: 1829
Quote:
Originally Posted by sj08054 View Post
1/1 ARM: 2.75
5/1 ARM: 3.75
30/yr Fixed: 4.75


Those are terrible rates.

You can get a 5/5 ARM for 2.75% with 5 years adjustment cap of 2% and lifetime max 7.75% with Penfed
Do you know topic starter's background info to say that? Dow you know at least his/her score?
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Old 09-26-2013, 01:26 PM
 
Location: Rheinland-Pfalz, Germany
693 posts, read 924,004 times
Reputation: 610
Quote:
Originally Posted by EngGirl View Post
Why are you so sure the rate will be 4.5% after 12 months? It might remain at 2.5% mark. Topic starter just said it cannot be higher than 4.5% after 12 months, and never higher than 7.5%.
There are many reasons why people prefer adj rates...
I am not sure. I always thinks its prudent to plan for the worst this way your never suprised how this could happen. We all are different in how we view these things, you must factor that when people make comments.

Sure there are reasons, I just dont see how 2.5% for a year with any risk of 4.5% is better then 30yr fixed at 3.5% or even 3.75%.
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Old 09-26-2013, 01:33 PM
 
Location: Mount Laurel
4,146 posts, read 8,382,146 times
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Quote:
Originally Posted by EngGirl View Post
Do you know topic starter's background info to say that? Dow you know at least his/her score?
No.. I do not know his/her specific scores but if they are offering 2.5% 1/1 ARM and OP got a 2.75% quote for 1/1, do you think his/her score is bad?
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Old 09-26-2013, 01:51 PM
 
Location: Southern California
4,350 posts, read 4,933,884 times
Reputation: 2129
Quote:
Originally Posted by bavariantransplant View Post
Sure there are reasons, I just dont see how 2.5% for a year with any risk of 4.5% is better then 30yr fixed at 3.5% or even 3.75%.
Let's look at a scenario of a $400,000 loan and you know you are going to sell in two years because you already have another home,need a another house, moving out of the country, in it for the short term. 1% is 4,000. This is just an example and not the OP scenario, I don't know if the OP is self employed doing a stated income loan with 85% LTV on a Condo. Maybe the OP's bank is giving them something special. Also it look like penfed has something equivalent to prepayment penalty for closing cost for 36 months.

What if it was a loan for $1,000,000 , that is $10,000 that you are leaving on the table when you know you are going to move in the next 2 years.

Last edited by thelopez2; 09-26-2013 at 02:02 PM..
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Old 09-26-2013, 02:02 PM
 
Location: Mount Laurel
4,146 posts, read 8,382,146 times
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Quote:
Originally Posted by thelopez2 View Post
Let's look at a scenario of a $400,000 loan and you know you are going to sell in two years because you already have another home,need a another house, moving out of the country, in it for the short term. 1% is 4,000. This is just an example and not the OP scenario, I don't know if the OP is self employed doing a stated income loan with 85% LTV on a Condo. Maybe the OP's bank is giving them something special. Also it look like penfed has something equivalent to prepayment penalty for closing cost for 36 months.

The attractive part about Penfed is that they pay for the closing cost and the total is divided into 36 months. If you close the loan prior to 36 months, you pay the pro-rated amount as a penalty. What's nice about the their ARM product is that there is no origination fee.
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Old 09-26-2013, 03:10 PM
 
Location: Rheinland-Pfalz, Germany
693 posts, read 924,004 times
Reputation: 610
Quote:
Originally Posted by thelopez2 View Post
Let's look at a scenario of a $400,000 loan and you know you are going to sell in two years because you already have another home,need a another house, moving out of the country, in it for the short term. 1% is 4,000. This is just an example and not the OP scenario, I don't know if the OP is self employed doing a stated income loan with 85% LTV on a Condo. Maybe the OP's bank is giving them something special. Also it look like penfed has something equivalent to prepayment penalty for closing cost for 36 months.

What if it was a loan for $1,000,000 , that is $10,000 that you are leaving on the table when you know you are going to move in the next 2 years.
I can see what your saying, not my buying style so I didnt think about that angle.
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Old 09-26-2013, 04:54 PM
 
Location: Southern California
4,350 posts, read 4,933,884 times
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Quote:
Originally Posted by bavariantransplant View Post
I can see what your saying, not my buying style so I didnt think about that angle.
Yes my style is different . I have never rented in my life and I'll live in "up and coming" neighborhoods. Like I said my style is different than most.
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Old 09-27-2013, 11:23 AM
 
1,282 posts, read 3,244,394 times
Reputation: 708
Quote:
Originally Posted by sj08054 View Post
1/1 ARM: 2.75
5/1 ARM: 3.75
30/yr Fixed: 4.75


Those are terrible rates.

You can get a 5/5 ARM for 2.75% with 5 years adjustment cap of 2% and lifetime max 7.75% with Penfed
I should mention these rates are for new construction, and PenFed, like most credit unions, does not offer new construction loans
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Old 10-01-2013, 09:34 AM
 
Location: Southern California
4,350 posts, read 4,933,884 times
Reputation: 2129
It is there an HOA, once completed would it fall under current conforming guidelines? Other than value, would there be any reason you can't refinance it in the future? Are questions you should find the answer for.
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