currently have a 7/1ARM (2yrs into it) with an interest only option- 5.25% rate (fixed rate, rate)

[tpo123]

is it worth refinancing it over to a fixed rate 30yr mortgage?

i assume i'll end up paying more, but at least i'm not paying interest only....

a little bit about the property- nyc coop- 2bdrm- prices are still rising- though i'm assuming manhattan pretty much is going to continue to rise.

do i plan on staying in the apt forever? probably not...but 2 yrs has passed since i purchased the place and it has flown by extremely quickly!!!

just curious as to what the right question/thought is on this matter.

[renriq02]

that's a great rate. Remember that the fixed rate mortgages will have a higher payment per month. If you're discplined...you can make that extra per month and save more money being IN an interest only loan.

[tpo123]

Originally Posted by renriq02

that's a great rate. Remember that the fixed rate mortgages will have a higher payment per month. If you're discplined...you can make that extra per month and save more money being IN an interest only loan.

i guess my concern at the moment is that after the 7yrs is up and the rates change to current, it'll be significantly higher than todays' rates.

so. do i lock into today's rates and pay higher now, or risk it.

of course the option to sell if/when my rate rises is still in the books, but if rates are high, then the selling price of my place would obviously suffer...

(the thought/reasoning for interest only 2.5 yrs ago was the thought that i wouldn't be in this place past 5 years, and the market value would yield a good enough gain to not worry about principal....then again 2.5 yrs ago the market was looking strong!)

[renriq02]

you wont worry so much if you pay towards the principal!
You can refinance with the same you got on a 30yr fixed...but is it going to be worth paying 3-4k in closing costs? With that 3-4k...you can put that towards the principal

Originally Posted by tpo123

i guess my concern at the moment is that after the 7yrs is up and the rates change to current, it'll be significantly higher than todays' rates.

so. do i lock into today's rates and pay higher now, or risk it.

of course the option to sell if/when my rate rises is still in the books, but if rates are high, then the selling price of my place would obviously suffer...

(the thought/reasoning for interest only 2.5 yrs ago was the thought that i wouldn't be in this place past 5 years, and the market value would yield a good enough gain to not worry about principal....then again 2.5 yrs ago the market was looking strong!)