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NEED HELP: FHA Streamline Loan - 30 yr fixed or 5/1 Hybrid ARM???
Posted on 1/23/12 at 2:51 pm
Posted on 1/23/12 at 2:51 pm
I'm trying to refinance right now and working on an FHA Streamline loan. I am young and the house is small, so I anticipate likely selling before 5 years is up (been in it almost 4 years now). With that being said, I can go with a 30 yr fixed 4.0% interest rate or do a 5/1 Hybrid ARM for 3.5% and save some significant money. Does anyone know much about the 5/1 hybrid? It seems relatively safe, although technically you are betting against the economy which is already about as bad as it can be right now. I typically like to go the safe route, but since I doubt I'll be in this house in 5 years it seems like the 5/1 Hybrid may actually be a good deal for me.
I appreciate any helpful advice as I'm fairly new at this whole process.
ETA: I'M GOING WITH THE 30 YEAR FIXED B/C I'M FINDING OUT THAT A 5/1 HYBRID IS THE SAME AS A 5/1 ARM....THEY JUST CALL IT A HYBRID TO MAKE YOU FEEL BETTER...AND IT ALMOST WORKED ON ME.
I appreciate any helpful advice as I'm fairly new at this whole process.
ETA: I'M GOING WITH THE 30 YEAR FIXED B/C I'M FINDING OUT THAT A 5/1 HYBRID IS THE SAME AS A 5/1 ARM....THEY JUST CALL IT A HYBRID TO MAKE YOU FEEL BETTER...AND IT ALMOST WORKED ON ME.
This post was edited on 1/24/12 at 1:00 pm
3
Posted on 1/23/12 at 2:54 pm to Tiger Bombshell
quote:
5/1 Hybrid ARM for 3.5%
That's a horrible rate for an ARM. If you're not getting more than a 1% reduction, I would play it safe.
Posted on 1/23/12 at 3:07 pm to C
I agree.....horrible rate for a 5/1 ARM.
What loan amount are you talking about anyway?
What loan amount are you talking about anyway?
Posted on 1/23/12 at 4:17 pm to Im4datigers
quote:
horrible rate for a 5/1 ARM
It's a hybrid arm, so it is different. It can only adjust 1% up or down 1 time per year starting year 6
quote:
What loan amount are you talking about anyway?
About 240
Posted on 1/23/12 at 4:26 pm to Tiger Bombshell
quote:
It can only adjust 1% up or down 1 time per year starting year 6
Although the rate change isn't as great, that benefit isn't very much considering you are losing out on at least 50 bps for the first 5 years in-which your balance is greater. What is the maximum you could ever pay?
Posted on 1/23/12 at 4:54 pm to Tiger Bombshell
Wells Fargo has an FHA 5/1 for 2.75 and a Conventional 5/1 for 2.375.
I've been looking at 7/1 ARM's for a few days. I don't think we'll be here for 7 years, but wanted to give us a cushion just in case. And it's a 5/2/5 so the most it adjusts in year 8 is 2%, which will still have us under 5%.
I've been looking at 7/1 ARM's for a few days. I don't think we'll be here for 7 years, but wanted to give us a cushion just in case. And it's a 5/2/5 so the most it adjusts in year 8 is 2%, which will still have us under 5%.
Posted on 1/23/12 at 5:28 pm to LSUGUMBO
Does that mean you have to have the home paid off in 7 years?
Posted on 1/23/12 at 6:04 pm to wegotdatwood
No, it means you refinance or it starts floating after 5 years.
There is no way I would take the rate in the OP. I would do a 7 year traditional ARM.
There is no way I would take the rate in the OP. I would do a 7 year traditional ARM.
Posted on 1/23/12 at 6:14 pm to Tiger Bombshell
Know anyone that has tried to pay off a home in 5 to 10 years? Pretty much just putting as much money as possible to pay off the loan each month? (Not putting money in retirement or anything)
Posted on 1/24/12 at 12:48 pm to wegotdatwood
Does 4.0% seem like a good rate? B/c I'm looking at Wells Fargo and seeing that they have a 30 year fixed loan for 3.75% and I'm curious if that is really true or not. I'm just not well enough informed to know if I'm getting a good deal or not.
Posted on 1/24/12 at 12:56 pm to Tiger Bombshell
quote:
I am young and the house is small, so I anticipate likely selling before 5 years is up (been in it almost 4 years now).
Never assume you will move within 5 years.
Posted on 1/24/12 at 1:01 pm to LSUAlum2001
quote:
Never assume you will move within 5 years.
That's prob a good piece of advice. I'm sticking with the 30 year fixed....now I just need to find out if this is the best option or if I should be looking around.
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