re: 10/1 7/1 5/1 ARM Question Concerning Construction/Mortgage

I'd take the 7/1, too, since it's the same rate as the 5/1. Find out what the max adjustment rates are- you might take your chances with the adjustment, if yours is like mine and the max adjustment per year is 2% and the cap is 5%, then it may work out better for you. I locked in at 2.875% 18 months ago for 7 years- In year 8, it can adjust 2% max, so even then I'm still under 5% and if rates are still down, then I can just refi.