Portal Forum General General Discussion Home Ownership Reply To: Home Ownership

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NeelyNeely
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@Don Adams Wheel of Justice wrote:

@rowshkex wrote:

So as we plan for buying a home in the next year or so, I’ve been looking at mortgage types, and am curious:

What are the downsides to starting with a 5/1 ARM or 7/1 ARM then refinancing in 5 or 7 years? If cash flow for the next 3-6 years will be a problem, but then will jump pretty significantly, wouldn’t 5/1 or 7/1 be appropriate for purchasers like us?

Fixed rates are at historic lows so there really aren’t any advantages to ARM loans right now. Our company closed over 80 loans last month and zero were ARM loans. PM me if you want more info.

Couldn’t agree more with this. With rates at these levels there is zero reason to do an ARM. The little savings you might get in rate is far outweighed but the risk you are taking if in fact you do have to refi. You have no idea what the rates will be in 5 to 7 years or what your financial situation might be.