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Talk me out of a 7 Year - Adjustable Rate Mortgage loan
Posted on 2/10/16 at 3:27 pm
Posted on 2/10/16 at 3:27 pm
was looking to refinance since I originally only put 3.5% down and comps in the area have been ridiculous lately. Been in the house almost 6 years and plan to sell probably within 5 or so once another kid comes along.
I was quoted a 7 year ARM at 3.375 (currently 30 year loan at 4.25). This would cut my note $237 (giving me $20000 in equity through the loan duration.)
i have no problem with my monthly note and id probably keep it the same but financially the 30 year im in now doesnt seem like the best option.
I know ARMs pretty much crippled the housing market but I dont see any scenario where Im not upgrading to a larger house in the next 7 years.
I was quoted a 7 year ARM at 3.375 (currently 30 year loan at 4.25). This would cut my note $237 (giving me $20000 in equity through the loan duration.)
i have no problem with my monthly note and id probably keep it the same but financially the 30 year im in now doesnt seem like the best option.
I know ARMs pretty much crippled the housing market but I dont see any scenario where Im not upgrading to a larger house in the next 7 years.
This post was edited on 2/10/16 at 3:28 pm
7
Posted on 2/10/16 at 3:29 pm to CE Tiger
What are the annual and life caps on changes in the interest rate? Interest rates will inevitably go up, although it may not be by much, it is something you should consider with an ARM.
Posted on 2/10/16 at 3:31 pm to CE Tiger
Have you considered a 15 year fixed rate mortgage? Those are under 3% now and you don't have interest rate risk if rates go up.
This post was edited on 2/10/16 at 3:36 pm
Posted on 2/10/16 at 4:48 pm to CE Tiger
Did a 7 yr ARM over a year ago b/c I knew i was planning to sell in next 2-3 years.
Went through Quicken Loans and only came out of pocket for the appraisal. Seamless process.
Went through Quicken Loans and only came out of pocket for the appraisal. Seamless process.
Posted on 2/10/16 at 10:57 pm to CE Tiger
Don't quote me on this because I'm not 100% sure but I think I did an interest only arm in 2006 banking on saving the extra money on the monthly note and selling the house with a profit before the higher rate hit. Unfortunately the market crashed in 2008 and my house went from $15k equity to negative $50k real fast. That's the one thing I would worry about is losing all the equity you have built up in your house. Losing that equity may make you have to live in the house longer than you expect with a way higher percentage.
Posted on 2/11/16 at 10:04 am to CE Tiger
watch the movie 99 homes
Posted on 2/11/16 at 3:48 pm to CE Tiger
because I locked a 3.5% 30 yr fixed for a customer today. so the adjustable rate is only .25% higher than the fixed rate.
Posted on 2/11/16 at 8:58 pm to CE Tiger
My wife and I just bought a house and did a 7 yr arm, 3.125% as we don't expect to be in the house past 7 years.
We saved a ton of money per month by going with the arm and we were able to qualify for a higher priced home than if we went 30 yr fixed.
Really the biggest risk is if we are still in the house in year 7 and the housing market takes a big plunge.
We saved a ton of money per month by going with the arm and we were able to qualify for a higher priced home than if we went 30 yr fixed.
Really the biggest risk is if we are still in the house in year 7 and the housing market takes a big plunge.
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