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Started By
Message
ARM or Fixed?
Posted on 9/18/14 at 12:28 pm
Posted on 9/18/14 at 12:28 pm
Situation:
Looking to buy 2 bedroom condo in LSU area for daughter and roommate in the $150k range. Have $35k cash for down payment and closing. Plan to sell it after she's done in about 5 years.
Should I go with a 15 yr fixed loan at 3% rate / $4108 closing and $801 mo. payment
OR
5/1 ARM - 2.75% rate / $4049 closing / $473 mo. note
OR
7/1 ARM - 3% rate / $4277 closing / $480 mo. note
Looking to buy 2 bedroom condo in LSU area for daughter and roommate in the $150k range. Have $35k cash for down payment and closing. Plan to sell it after she's done in about 5 years.
Should I go with a 15 yr fixed loan at 3% rate / $4108 closing and $801 mo. payment
OR
5/1 ARM - 2.75% rate / $4049 closing / $473 mo. note
OR
7/1 ARM - 3% rate / $4277 closing / $480 mo. note
6
Posted on 9/18/14 at 12:44 pm to purpngold
Do you think rates are going to be lower than what they are today in 5 or 7 years?
Posted on 9/18/14 at 12:46 pm to Will Cover
quote:
Do you think rates are going to be lower than what they are today in 5 or 7 years?
No idea!
Posted on 9/18/14 at 12:52 pm to purpngold
quote:
Plan to sell it after she's done in about 5 years
If the condo market tanks again what does that do to your plan to sell it in 5 years?
Posted on 9/18/14 at 1:11 pm to purpngold
quote:
No idea!
Exactly my point. Rates are historically low right now.
Only one way for them to go is ... up.
This post was edited on 9/18/14 at 1:12 pm
Posted on 9/18/14 at 1:20 pm to purpngold
ARM fits you best. I would go with the 7 year in case she goes to grad school or you have to rent it for another year or two.
Posted on 9/18/14 at 1:39 pm to purpngold
go with the fixed because condo's are a pain in the arse to sell. as a lender i absolutly hate it when a customer wants to buy a condo. its a dirty word to me
Posted on 9/18/14 at 1:51 pm to purpngold
I'd go with the 7/1 ARM, too. Plenty of time to sell before the rate adjusts. Is the Adjustment Cap 2%? What will happen in year 8 if you still have the loan?
Posted on 9/18/14 at 2:10 pm to LSUGUMBO
I'd go 7/1 arm and make them both pay $500 a month in rent, then pay some extra each month to get the principle down.
Posted on 9/18/14 at 2:23 pm to purpngold
If the rate on the 15 yr fixed and 7 yr ARM are the same rate, do the 15yr fixed IMO. Condos suck. Especially around LSU.
Posted on 9/18/14 at 3:35 pm to TigerDeBaiter
quote:
If the rate on the 15 yr fixed and 7 yr ARM are the same rate, do the 15yr fixed IMO. Condos suck. Especially around LSU.
this is what I would do. In 5 years, you can sell it or if the market sucks you can rent it. there will always be a rental market around a major university.
Posted on 9/18/14 at 4:57 pm to Hawkeye95
quote:quote:
If the rate on the 15 yr fixed and 7 yr ARM are the same rate, do the 15yr fixed IMO. Condos suck. Especially around LSU.
this is what I would do. In 5 years, you can sell it or if the market sucks you can rent it. there will always be a rental market around a major university.
Agreed. Rates are probably as low as they will ever get and even with all the new housing going up on Burbank there is still a high demand by students to live near campus as well as a high demand by tailgaters for a place to rent for home game weekends in the Fall (after your daughter graduates, of course).
Posted on 9/19/14 at 3:12 pm to TigerDeBaiter
The rate is the same, but the amort is not.
I would take a 30 year amort and cut my payment in half, in his situation.
I would take a 30 year amort and cut my payment in half, in his situation.
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