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re: 5 year ARM 6% or 30 year loan for 6.875?
Posted on 3/16/23 at 8:21 pm to shoelessjoe
Posted on 3/16/23 at 8:21 pm to shoelessjoe
You arent giving enough information for the MT.
1) what is the index for the arm?
2) what is the margin to the index?
3) (less important) are there per period caps and lifetime caps on the arm?
The average duration of a mortgage is under 5 years. But knowing the mechanics of how the arm works is important.
1) what is the index for the arm?
2) what is the margin to the index?
3) (less important) are there per period caps and lifetime caps on the arm?
The average duration of a mortgage is under 5 years. But knowing the mechanics of how the arm works is important.
1
Posted on 3/16/23 at 8:29 pm to meansonny
What do you mean index of the ARM? Not familiar.
Margin of the index?
This ARM is 5 year fixed at 6% the refinance after 5 years to whatever the going ARM is at that branch. 1k$ each refinance at the 5 year mark. Can only use for 25 years combined. Can opt out at anytime if mortgage rates drop and refinance to another bank that has lower 30 year rates or whatever is more cost feasible.
The 6.875 would need me to buy down to get to that at a cost of 1600$.
Margin of the index?
This ARM is 5 year fixed at 6% the refinance after 5 years to whatever the going ARM is at that branch. 1k$ each refinance at the 5 year mark. Can only use for 25 years combined. Can opt out at anytime if mortgage rates drop and refinance to another bank that has lower 30 year rates or whatever is more cost feasible.
The 6.875 would need me to buy down to get to that at a cost of 1600$.
This post was edited on 3/16/23 at 8:32 pm
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