- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
re: 5 year ARM 6% or 30 year loan for 6.875?
Posted on 3/17/23 at 6:06 am to Turf Taint
Posted on 3/17/23 at 6:06 am to Turf Taint
quote:
Can ride interest rate decreases via refi.
The irony is that everyone purporting to refinance to a lower rate in the future is indirectly supporting a 5 year arm (if you aren't going to use a 30 year fixed rate, why pay extra for it?).
I've seen ARMs tied to the 6 month LIBOR or 1 year Treasury with a 0.25% to 1.25% margin. The lower the margin, the more likely I would recommend strongly considering the ARM (especially at 0.25% margins).
I've also seen ARMs tied to 7% over prime. That's insane.
Last I checked, the average mortgage duration is just over 4 years. Which means that the majority of Americans would be better in a 5 year ARM than a 30 year conventional mortgage.
Just food for thought.
1
Posted on 3/17/23 at 9:07 am to meansonny
quote:
The irony is that everyone purporting to refinance to a lower rate in the future is indirectly supporting a 5 year arm (if you aren't going to use a 30 year fixed rate, why pay extra for it?).
Not supporting the ARM but the security a fixed rate provides. Of course if the rate is lower in 5 years refinance. But what if it’s not lower til year 6 or 7? What if it’s never lower? A bird in the hand is better than two in the bush type situation for me.
Page 1 of 1
Popular
Back to top
Follow TigerDroppings for LSU Football News